GST prosecution threshold at Rs 10 cr: what changes for you

The government wants to raise the GST prosecution threshold to Rs 10 crore. Here is what that means for businesses.
The prosecution threshold is the minimum tax evasion amount that can trigger a criminal case. Today it is Rs 5 crore. Below that, only financial penalties apply.
If the proposal passes, criminal prosecution would start only above Rs 10 crore. Fewer business disputes would turn into criminal cases.
Jail terms would also soften. Today, evasion above Rs 5 crore can mean up to five years in jail. Evasion of Rs 2-5 crore carries up to three years, and Rs 1-2 crore up to one year.
The panel proposes cutting the maximum sentence for the Rs 5-10 crore band from three years to two years. Courts would also get more freedom to impose fines instead of jail.
The biggest open question is arrest powers. The committee is split on whether tax officers should keep the power to arrest. The GST Council decides on October 7.
The direction is clear: punish fraud, but do not criminalise routine tax disputes.
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