Government buildings, New Delhi (file image), Wikimedia Commons, Free Art License
57th GST Council: Key numbers
The 57th GST Council meeting on October 8 decided on no broad rate changes but on removing arrest powers, raising the prosecution threshold from Rs 1 crore to Rs 5 crore and widening input tax credit, with most changes needing amendments before they take effect.
Rs 5 crore: the new prosecution threshold, up from Rs 1 crore.
Rs 10,000: the new general penalty, down from Rs 25,000.
Rs 40 crore: the cap on pre-deposit for penalty-only appeals.
November 1, 2026: ITC on input services becomes refundable under the inverted duty structure.
April 1, 2027: the framework is expected to become operational.
In non-fraud cases, a 5% penalty would apply if tax and interest are paid within 30 days of the order under Section 73 or 60 days under Section 74A.
A minimum Rs 10,000 threshold would apply for show-cause notices under Sections 73, 74 and 74A.
Pending cases below that amount would be decided as if the threshold applied from the start.
Pre-deposit for appeals against penalty alone would be capped at Rs 40 crore.
Vehicles can be stopped for inspection only on specific intelligence, authorised by an officer of Joint Commissioner rank or above, according to Whalesbook.
Inspection and seizure would be limited to the supplier’s or recipient’s state, with no interception in transit states, according to TaxO.
Restrictions on input tax credit under Section 17(5) would be removed for outdoor catering, health and life insurance, telecom towers, pipelines laid outside factories, free samples, and goods destroyed or written off on expiry.
Most registration amendments would be auto-accepted, except changes to the principal place of business for taxpayers who are not low risk.
No broad rate cuts were made, and the changes are targeted clarifications, exemptions and reverse charge extensions, according to TaxO.
From November 1, 2026, credit on input services becomes refundable under the inverted duty structure, according to TaxO.
From April 1, 2027, credit on capital goods becomes refundable, spread over 60 months, according to the same report.
Most of the changes need notifications, circulars or amendments to the CGST and IGST Acts before taking effect, and the framework is expected to become operational from April 1, 2027, according to Whalesbook.
Government buildings, New Delhi (file image), Wikimedia Commons, Free Art License