57th GST Council recommends decriminalisation and a broad set of compliance reforms

The 57th GST Council meeting on 8 October recommended a wide package of process reforms covering registration, returns, refunds, adjudication and trade facilitation. The changes follow the rate-focused reforms of the previous Council meeting and are aimed more directly at compliance and taxpayer administration.

Among the most consequential recommendations are removal of GST officers’ arrest powers under the GST laws, an increase in the general prosecution threshold from ₹1 crore to ₹5 crore and a reduction in the general penalty ceiling from ₹25,000 to ₹10,000. The Council also recommended more automated and time-bound refunds, changes in input-tax-credit treatment and clearer standards for notices and adjudication.

For smaller businesses, the package includes simplified registration and an optional arrangement for eligible consumer-facing businesses with turnover up to ₹5 crore, alongside measures intended to ease e-commerce participation. Several recommendations require amendments to law, rules or systems before they take effect; a Council recommendation is therefore not automatically the same as an immediately operative statutory provision.

For civil-services preparation, the meeting shows how GST federalism works through the Council: the Union and States jointly recommend changes, while implementation may require legislation, notifications and system changes. The reform theme is a shift from punitive and discretionary compliance toward risk-based, technology-enabled administration.