India Proposes Removing GST Officer Arrest Powers

The Government of India is proposing a shift toward a trust-based tax administration by removing the power of arrest from Goods and Services Tax (GST) officers. Under the new proposal, arrests for established criminality would be handled by enforcement agencies through a court-monitored process. This change follows eight months of consultation by the Law and Fitment Committees, though some states may resist the loss of authority over tax evaders.

Additional administrative reforms include raising the prosecution threshold from Rs 1 crore to Rs 5 crore, barring notices for tax demands below Rs 10,000, and implementing invoice matching to prevent fraudulent input tax credits. The government also plans to expand input tax credits to include ordinary business costs and allow businesses to register in a single state to sell nationwide.

The GST Council will deliberate on these proposals during its 57th meeting in New Delhi on October 8, 2026. The Ministry of Finance confirmed that the meeting will focus on process and structural reforms, ease of doing business, e-commerce, and service exports, but will not address changes to tax rates. These reforms are expected to be implemented in phases through 2027.