“The undersigned is directed to refer to the above subject and to convey that on account of unavoidable circumstances, the 57th Meeting of the GST Council is rescheduled,” the memorandum said.
The meeting comes as the Council is likely to consider a package of GST enforcement and prosecution-related reforms.
The proposals include removing the power of GST officers to arrest taxpayers and requiring judicial authorisation for any arrest. The Council is also likely to consider raising the threshold for launching criminal proceedings from ₹1 crore to ₹5 crore.
The proposed changes would narrow the scope of prosecution provisions and seek to keep routine disputes over classification, valuation and input tax credit outside the criminal process, people familiar with the proposals said.
The proposals are part of the government’s Next-Generation GST reform agenda, following the rate rationalisation implemented in September 2025.
Proposed changes to prosecution
The proposals include softening 24 offences listed under the prosecution provision of the GST law and removing nine offences entirely, while retaining 11 as they are.
The minimum sentence provision is also proposed to be removed, so that courts would not be bound to impose a prison term. A fine would be available as an option in every case, while the maximum sentence in the middle band would be reduced from three years to two.
The Council is also likely to consider waiving late fees for small taxpayers and rationalising penalties.
The proposed changes would not remove the government’s powers to recover taxes or impose financial penalties. Taxpayers found to have short-paid tax or wrongly claimed input tax credit would continue to face recovery proceedings and other statutory consequences.
Serious cases involving deliberate evasion or fraud could continue to be prosecuted through the courts, news agency PTI reported, citing sources.
Currently, GST officers can arrest, after prior authorisation from a Commissioner-level officer, in cases involving major offences where tax evasion, fraudulent input tax credit or wrongful refunds exceed ₹1 crore.
The proposed changes would instead require judicial authorisation for an arrest, with tax officers focusing on recovery of tax, interest, and penalties.
Precious metal imports
The Council is also likely to consider withdrawing the IGST exemption available to banks and nominated agencies importing gold, silver and platinum, according to news agency PTI.
Gold, silver and platinum imports currently attract 3% IGST. However, the tax is exempt when the metals are imported by banks and nominated agencies that are periodically listed by the government.
The exemption was given in 2017. The proposal before the Council would seek to withdraw it, sources said.
A wider set of reforms under consideration includes easier GST registration, faster refunds, simpler input-tax-credit procedures and changes to show-cause notices and penalties.
The council is also expected to consider a proposal to allow employers to claim input tax credit on premiums paid for insurance coverage provided to employees.
Under the law, GST is exempt on individuals buying life or health policies for themselves or their family. However, when a business buys life or health cover for its employees, tax is charged on that cover, and until now the business could not claim ITC on it.
Currently, an 18 per cent GST is levied on all such group insurance policies. The GST Council will now consider a proposal to allow businesses to claim credit for buying insurance cover for employees.
(With inputs from PTI)
