Story perspectives

GST Council Proposes INR5 Crore Criminal Threshold, GST 2.0 Reforms

By Drooid · Oct 5, 2026, 10:13 AM UTC · How we work

Summary

Story summary

The 57th GST Council met on 7 October 2026 to consider GST 2.0 reforms.
The reforms would remove tax officials’ power to arrest GST defaulters.
Businesses could file a single GST registration for multiple states under the proposal.
Employers would be allowed to claim input tax credit on group-insurance premiums for employee coverage.
The criminal-prosecution threshold for GST offences increased to INR5 crore, up from INR1 crore.

History

Historical Context

In 1991, India's New Economic Policy, championed by Finance Minister Manmohan Singh, dismantled license raj and lowered corporate tax rates, spurring liberalization. The policy lifted capital to $2.5 billion—a 10 percent jump—prompted World Bank to raise India’s rating and Reserve Bank of India to cut rates by 0.5 percent. Similarly, the GST Council and Ministry of Finance propose GST 2.0 reforms that centralise registration, raise the INR5-crore threshold, and strip tax officials of arrest powers. The 1991 shift showed streamlined tax structures can boost compliance and attract investment, suggesting GST 2.0 could similarly accelerate India's fiscal consolidation.

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Story summary

The 57th GST Council met on 7 October 2026 to consider GST 2.0 reforms.
The reforms would remove tax officials’ power to arrest GST defaulters.
Businesses could file a single GST registration for multiple states under the proposal.
Employers would be allowed to claim input tax credit on group-insurance premiums for employee coverage.
The criminal-prosecution threshold for GST offences increased to INR5 crore, up from INR1 crore.

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