Quick GST refunds, no rate changes, tax officers can no longer make arrests: Here's what Council decided

The 57th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, concluded on Thursday with a slew of decisions on sweeping policy reforms.

One of the key decisions was to scrap arrest power of GST officers and raise prosecution threshold to ₹5 crore from the previous ₹1 crore. GST officers will now focus on recovering taxes, while law enforcement agencies will deal in cases of legal proceedings.

Earlier, GST officers had the power to arrest after prior authorisation from a Commissioner-level officer, in cases of major offences where tax evasion, fraudulent input tax credit (ITC), or wrongful refunds exceed ₹1 crore.

Employers will now be able to claim Input Tax Credit on GST paid on premiums paid for insurance coverage provided to employees.

The GST Council has simplified registration mechanism for small taxpayers making supplies through e-commerce platforms. There will also be no GST demand notice for tax amount below Rs 10,000.

Revealing that there will be no rate changes, the finance ministry said, "The rate structure is settled, so the Council has turned to how the tax works day to day," adding that GST rate changes will now happen once a year.

Sitharaman said the GST Council on Thursday decided to lower time limit to acknowledge refund claims to 10 days from the earlier 15.

The Council will set up a Committee of Officers to examine how to protect a genuine buyer who holds a proper invoice, has received the goods, and has paid his supplier in full.

"The Committee of Officers will complete its study within three months, and an agenda will be placed before the next Council meeting," the ministry said.

The proposed changes to the GST law would be implemented in a staggered manner beginning early next year.