GST Council Removes Tax Officers' Arrest Power, Raises Prosecution Threshold

The GST Council on Thursday eliminated the power of tax officials to arrest taxpayers. The decision came just four days after The Indian Express reported that such a move was being considered. At the same time, the Finance Ministry said the prosecution threshold for tax cases will rise to Rs 5 crore, up from the earlier Rs 1 crore. Sources said the changes were slated for discussion at the GST Council meeting on October 7, aiming to lift investor confidence and ease fears of tax‑authority overreach. The raised threshold means only cases involving tax dues of at least five crore rupees will face criminal prosecution, reducing the number of smaller disputes that could lead to arrests. Officials hope the reform will create a more business‑friendly environment and signal a softer stance by tax officers. The move is expected to reassure domestic and foreign investors who had voiced concerns over aggressive tax enforcement. ## Context The GST Council, made up of the Union finance minister and state finance representatives, decides on major GST rules and enforcement measures. Removing arrest power curbs a tool that had been used in high‑profile cases, while a higher prosecution limit narrows the scope of criminal tax actions. Such steps are part of a broader effort to improve India's ease‑of‑doing‑business rankings.