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GST Council Approves Decriminalisation and Plans Centralised Faceless CGST

The package aims to lower penalties, give small consumer-facing sellers an annual-return option, create a tech-led platform for faster refunds, centralise CGST assessments, simplify e-commerce registration

Overview

  • The GST Council on Thursday approved removing tax officers’ power to arrest, raising the prosecution threshold from Rs 1 crore to Rs 5 crore, removing minimum punishments and cutting the general penalty to Rs 10,000 for many offences.
  • The council gave in-principle approval to an optional annual-return scheme for consumer-facing firms with turnover up to Rs 5 crore so they can pay quarterly and file one return a year, a change that could cover about 16 lakh small sellers.
  • The central government and CBIC will design a faceless, centralised CGST assessment and service platform for roughly 200,000 multi-jurisdiction CGST taxpayers, with a public consultation due by year-end and target implementation in FY 2027–28.
  • Operational reforms approved in principle include automatic acceptance of registration modifications, faster automated refunds with a target to process most eligible claims within three working days, broader input tax credit and expanded refund rules to ease working capital strains.
  • Many measures need administrative rules or legislative change and are scheduled for phased rollout from April 1, 2027, so businesses should expect rule-making, public consultations and implementation steps before benefits take effect.