Prime Minister Narendra Modi has lauded the recent Goods and Services Tax (GST) reforms approved by the GST Council, predicting a “very positive impact” on taxpayers and businesses across India. Speaking on Thursday, October 8, 2026, Modi highlighted the clear focus of the reforms: “Faster decisions. Lower compliance costs.”
The recommendations, which emerged from the 57th GST Council meeting chaired by Finance Minister Nirmala Sitharaman in New Delhi, aim to simplify the tax system and reduce the burden of compliance and litigation. While no changes were made to the existing GST rate structure, the Council focused on procedural improvements.
Key Decriminalization Measures
A significant aspect of the new reforms is the move towards greater decriminalization and reduced enforcement powers for GST officers:
- Arrest Provisions Removed: The power of GST officers to arrest taxpayers has been proposed for removal.
- Prosecution Threshold Raised: The minimum threshold for initiating prosecution has been substantially increased from ₹1 crore to ₹5 crore.
- Minimum Punishment Removed: The Council has recommended removing the minimum punishment for GST offenses, granting courts more discretion to decide on fines, imprisonment, or both.
- General Penalty Reduced: The general penalty for offenses where no specific penalty is prescribed has been reduced from ₹25,000 to ₹10,000.
Streamlined Refunds and Registration
The reforms also target speeding up GST refund processes and streamlining registrations through increased automation:
- Faster Refund Acknowledgement: The acknowledgement period for refund applications has been reduced from 15 days to 10 days.
- Automated Refunds: Approximately 90% of eligible refund claims are expected to be processed automatically via risk-based assessment.
- Automated Registrations: Greater automation is proposed for GST registration and amendments, with low-risk applications anticipated to receive automatic approval within three working days.
- Optional Scheme for Small Businesses: An optional scheme has been approved in principle for smaller taxpayers with turnover up to ₹5 crore who supply only to consumers. These businesses may now file returns annually while paying tax quarterly.
These comprehensive changes underscore the government’s ongoing efforts to make the GST regime more efficient, transparent, and citizen-friendly, fostering an environment of trust-based administration.