Mumbai: The government is considering removing GST officials powers to arrest people, with the proposal likely to be discussed at the GST Council meeting on October 7, according to media reports.
If approved, the change would require amendments to the GST law. The government could introduce these in Parliament during the winter session.
What Are The Existing Powers?
The current law allows arrests for serious GST offences, including fake invoicing, fraudulent input tax credit claims and deliberate tax evasion.
Section 69 of the CGST Act empowers the commissioner to authorise arrests when there are sufficient grounds to believe that a person has committed specified offences.
Guidelines issued in 2022 said arrests should not be made merely because the law permits them. Officials must consider the seriousness of the case, the person’s role and other factors.
Why Is Change Being Considered?
Complaints about the alleged misuse of powers are reportedly driving the proposal. The Centre and states have discussed the issue for eight to nine months.
Businesses have raised concerns about GST investigations and arrests, particularly those involving senior company executives. The proposed approach seeks to maintain action against fraud while reducing fear among businesses.
887 Arrests In Four Years
Between 2021–22 and 2024–25, central GST authorities registered 72,393 offence cases and arrested 887 people, according to figures cited in the report.
These numbers cover central GST formations only and exclude arrests by state authorities.
How Would Fraud Be Tackled?
Action against serious fraud and deliberate offences would continue under the proposal. Reports suggest that criminal proceedings could be pursued under the Bharatiya Nyaya Sanhita instead of tax officials exercising arrest powers under GST law.
What Happens Next?
The October 7 meeting could discuss the proposal, followed by government decisions and legislative changes if it advances.
For now, GST officials retain their arrest powers. No final decision has been taken, and any change will depend on council discussions and the legal process.
