The Daily PulseBusiness
Five Major States Oppose Move to Scrap Arrest Powers in GST Council Meeting
Reported by Siddharth Deshmukh (Staff Writer) · Indian Express - Business ·
Reported by one source so far
At least five major Indian states have raised concerns over a proposal to remove taxmen's arrest powers ahead of the 57th Goods and Services Tax Council meeting in Delhi. Maharashtra, Gujarat, Uttar Pradesh, Karnataka, and Andhra Pradesh are among the states expressing reservations during meetings held between state and central officials.
State Demands
States have argued that the indirect tax system should not become toothless. Officials want pre-prosecution arrests to be graded, suggesting an additional layer that allows for civil arrest in cases of serious violations, while normal cases could see no arrest. The Council meeting was deferred by a day to Thursday, allowing Union government officials to consult GST chief commissioners across zones to iron out these issues.
Proposed Changes
The Council is set to discuss decriminalising offences, including the removal of arrests, to boost investor sentiment and ease concerns about tax authority overreach. The underlying goal is to shift enforcement toward financial recovery through tax, delay interest, and penalties rather than custody. Under the proposal, prosecution would remain available for a higher threshold of Rs 5 crore, compared to the current limit of Rs 1 crore.
Context
Tax policy discussions in India often balance the need to catch tax evaders with the goal of making it easy for businesses to operate without fear of harassment. The GST Council brings together the Union government and all state governments to take joint decisions on indirect tax rules.
ExplainerWhy this matters
What Happened
The 57th GST Council meeting features a central proposal to remove pre-prosecution arrest powers for tax officials, shifting enforcement toward financial penalties and recovery rather than criminal custody. Several key states oppose this complete removal.
Why It Matters
This debate highlights the constant policy tug-of-war between tax enforcement and ease of doing business. While businesses complain that arrest powers create fear and deter investment, many state governments rely on strict enforcement tools to prevent tax evasion and protect state revenues.
What Happens Next
The GST Council will debate the proposal to determine whether arrest powers should be completely removed, modified to allow civil arrest for serious offences, or kept in some form. The final decision will shape how tax evasion is handled across the country.
More in Business
Photo: Wikimedia CommonsBusinessExplainerVerified — Confirmed by a second source: Economic Times - MarketsMajor
Major IT Firms Suspended From US Green Card Program As Tech Stocks Slide
Reported by Varun Krishnan (Senior Writer) · Livemint - Markets ·
BusinessExplainerVerified — Confirmed by a second source: Livemint - MarketsMajor
US Immigration Crackdown Slashes Infosys and Wipro ADRs by Nearly Three Percent.
Reported by Neha Sharma (Staff Writer) · Economic Times - Markets ·
