• Notification Date: 13-12-2022
  • Notification No: N/A

GST Council Meeting: Panel for raising Threshold for Offences to Rs 2 Crores

The GST Council is likely to take up changes in the prosecution provisions under the GST regime in its next meeting which is scheduled to meet on December 17. A committee of officials has proposed increasing the monetary limit to Rs 2 crore from the current Rs 1 crore, set as a minimum amount of tax evaded for arrest in non-cognizable and bailable offences under the regime. In the upcoming meeting, the Council will also consider a ministerial panel report on setting up GST Appellate Tribunals. 

At present, if the amount of tax evaded or input tax credit wrongly availed of is Rs 5 crore or above, the individual can be imprisoned for up to five years. If the amount evaded is between Rs. 2 crore and Rs. 5 crore, the jail term could be three years. If tax evaded is between Rs. 1 crore and Rs. 2 crore, the incarceration period is a year. 

The Council will also take up the report by a group of ministers (GoM) which is headed by Haryana Deputy Chief Minister Dushyant Chautala -- on the Goods and Services Tax Appellate Tribunals (GSTATs). 

The report of the Group of Ministers has recommended that each Bench should consist of president, two judicial members, one technical member (Centre) and another technical member (state). The GoM has suggested that it is important to empower a single-member Bench to hear cases with tax implications up to Rs 50 lakh. 

The report also emphasised on a principal Bench in New Delhi and similar Benches at the state level. According to the sources, the appellate body’s president is likely to be a retired judge from the Supreme Court or former chief justice of a High Court. 

States with less than 50-million population should have maximum of 2 Benches. The reports suggested that no state should have more than 5 Benches. Among others, the law committee set up under the GST Council proposed a change in the compounding provision. The committee suggested to reduce the provision to 25 per cent of the tax involved, from the existing 50 percent. The maximum amount must not be more than 100 per cent. 

Small businesses with a Rs 5-10-crore turnover may be asked for a lower fee (15-20 per cent) on total tax involved. At present, the provision of compounding requires a 50-150 percent fee.