The GST Council has approved a series of changes aimed at making the Goods and Services Tax (GST) framework more proportionate for taxpayers, particularly in cases involving delayed filings, mistakes or payment defaults.

Under the revised framework, the power of arrest under GST is being removed. The threshold for prosecution has also been increased from ₹1 crore to ₹5 crore, significantly raising the level at which criminal prosecution can be initiated.

The Council has further decided to remove the minimum punishment prescribed under the existing provisions. The decision on whether a case warrants a fine, imprisonment or both will now be left to judicial discretion based on the circumstances of each case.

The general penalty, applicable in situations where no specific penalty is prescribed, has also been reduced from ₹25,000 to ₹10,000.

The changes are intended to ensure that taxpayers who make genuine mistakes, file returns late or fall behind on payments are dealt with proportionately. Such taxpayers would face recovery of dues, applicable interest and a proportionate penalty, without additional punitive action beyond what is warranted under the law.