The GST Council on October 8 approved a set of taxpayer-friendly changes. The meeting was chaired by Finance Minister Nirmala Sitharaman. The Council decided to remove arrest powers from the GST law.

The threshold for launching prosecution has been raised from Rs 1 crore of tax evasion to Rs 5 crore. The penalty for several offences has been cut from Rs 25,000 to Rs 10,000. Officials said the aim is to make compliance easier and less fear-driven for honest businesses.

The Council also decided that 90 per cent of refund claims will be settled within three days. Changes to GST rates will now be made once a year, from April 1. All the decisions taken at the meeting will come into effect from April 1, 2027.

Trade bodies welcomed the move. They said small businesses were the worst hit by harsh provisions. The Council will review the impact of the changes after one year of implementation. States will issue detailed circulars in the coming weeks.