The GST Council met for the 57th time on 8 October 2026 and recommended a broad set of reforms. The theme is simple: make GST less punitive for honest businesses, and make registration, returns and refunds faster.
This guide covers what was recommended, what it means in practice, and — just as important — what has not changed yet.
Recommendations are not yet law. The Council recommends; the changes take effect only when the government issues the notifications, circulars and (for some items) amendments to the GST Acts. Keep following your current obligations until then.
The headline decisions
| Area | Before | Recommended |
|---|---|---|
| Arrest provisions | Arrest possible for specified offences | Removed |
| Prosecution threshold | ₹1 crore | ₹5 crore |
| Maximum general penalty | ₹25,000 | ₹10,000 |
| Registration for small e-commerce sellers | Needs a place of business in each State | Simplified |
1. No arrests under GST
The Council recommended removing the arrest provisions from GST law. For most businesses this is about peace of mind: a tax dispute is treated as a tax dispute, to be settled through assessment, payment and appeal, not through arrest.
Because the arrest power sits in the GST Acts, this needs a legislative amendment before it applies.
2. Prosecution only above ₹5 crore
The monetary threshold for launching prosecution goes up from ₹1 crore to ₹5 crore. Smaller cases would be handled through tax, interest and penalty rather than criminal proceedings.
3. Lower general penalty
The maximum general penalty — the one used when no specific penalty is prescribed — drops from ₹25,000 to ₹10,000. Penalties for specific offences such as fraud or wrong ITC are separate and are not covered by this change.
4. Easier registration for small e-commerce sellers
Sellers who sell only through e-commerce platforms can register in a State where they have no office by using the platform's approved warehouse as their place of business. This is already live on the GST portal as the Rule 14B simplified registration scheme — see our step-by-step Rule 14B guide.
5. Faster refunds and better ITC flow
The Council recommended faster, more automated refund processing and changes to how ITC refunds are calculated, including how eligible input services and capital goods are counted from specified dates.
What else the Council covered
According to the official FAQs released after the meeting, the recommendations also touch:
- GST registration, amendments and cancellation procedures
- Goods movement across States
- Clarifications on GST rates and classification of certain goods
- Specified waste and scrap transactions
- Services such as helicopter passenger transport, hotel and restaurant services, and research and development
- Exports and relief measures for small taxpayers
The FAQs themselves say they are for guidance and do not have independent legal validity — always check the notification that implements each change.
Changes already live on the GST portal
Some follow-up changes have already reached the portal:
- Registration amendments: under Notification No. 05/2026-Central Tax (26 October 2026), most amendments other than the principal place of business are now approved on submission after online validation.
- Rule 14B registration for e-commerce sellers is open on the portal.
- E-invoicing for RCM self-invoices is in sandbox testing — see our RCMDOM and RCMIMP explainer.
What you should do now
- Don't change your compliance yet for items that need a law change (arrest, prosecution, penalty limits).
- Use what is already live — for example, Rule 14B if you sell through marketplaces in other States.
- Watch for notifications. The FinGST app sends an alert as soon as new CBIC notifications and circulars are published, and the GST tools on fingst.in are updated to match.
