समाचार Samāchār · India · 31 October 2026

No more GST arrests: CBIC acts on the Council’s call before the law catches up

Instruction No. 02/2026-GST stops arrests, bars notices below ₹10,000 and limits highway checks on goods in transit. It applies now, ahead of CGST Act amendments proposed for April 2027.

The state has stepped back from the small taxpayer. On 30 October the Central Board of Indirect Taxes and Customs issued Instruction No. 02/2026-GST to its field formations. It says no further arrests may be carried out under GST. It takes effect at once. It gives effect to recommendations of the 57th GST Council meeting, held in New Delhi on 8 October.

The legal change is still on its way. The Council recommended omitting Section 69 of the CGST Act, which holds the power to arrest. It also recommended amending Sections 73, 74 and 74A on notices. It proposed 1 April 2027 for these amendments. Until then the instruction works as an interim administrative direction.

Two more changes matter to anyone who moves goods. No show cause notice may issue where the total tax involved is below ₹10,000, counting CGST, SGST or UTGST, IGST and compensation cess together. Trucks get fewer stops. Interception now needs specific intelligence, authorised in writing by an officer of Joint Commissioner rank or above. Officers may act only if the supplier or recipient is in their State. Otherwise the goods must pass and the information goes to the officer with jurisdiction. The exception is a consignment with no e-way bill and no document. Goods in transit can no longer be confiscated under Section 130.

This is minimum government, maximum governance in practice. Arrest powers over tax disputes turned compliance into fear. A ₹10,000 floor frees officers for cases worth their time. Credit goes to the Council, where the Centre and every state sit together, for agreeing it. One step remains. The Council secretariat will send the instruction to state GST formations, which may issue similar directions. How far the relief reaches depends on them.

What a founder takes from it: For a small trader the worst outcome of a GST mismatch is no longer a cell. Keep the books clean anyway, and put the energy once spent on managing fear into the business. Then watch whether every state issues the same direction.