Law and statutory body
GST Council
GS3 Economy · TaxationGS2 FederalismPrelims and Mains
- Why in news
- On 9 October 2026, PIB detailed the 57th GST Council meeting (October 2026), which recommended process reforms on registration, returns, refunds, disputes, prosecution and e-way bills, plus rate clarifications.
- What it is
- The GST Council is the joint Centre-State forum under Article 279A, inserted by the 101st Constitutional Amendment. It recommends GST rates, exemptions, law changes and procedures. Its recommendations take effect only through law amendments, circulars and notifications.
- No small notices
- No show cause notice will be issued where the tax amount involved is below ₹10,000.
- Refund acknowledgement
- The refund acknowledgement period would be cut from 15 to 10 days, with deemed acknowledgement if there is no response.
- Constitutional basis
- The Council is established under Article 279A of the Constitution, inserted by the 101st Amendment Act, 2016.
- Late fee relief
- Late fees for delayed returns would be waived for taxpayers with previous-year turnover up to ₹5 crore, if filed by the end of the due month.
- Chair and meeting
- The 57th meeting was chaired by the Union Finance Minister in New Delhi. Ministers from States and UTs with legislatures attended.
- Arrest powers
- The Council recommended removing arrest powers under GST by omitting section 69 of the CGST Act.
- Prosecution threshold
- The monetary threshold for prosecution would rise from ₹1 crore to ₹5 crore.
- General penalty
- The maximum general penalty under section 125 of the CGST Act would fall from Rs 25,000 to Rs 10,000.
- Legal force
- The release is only a summary. The recommendations gain legal force through circulars, notifications and law amendments.
Don’t confuse with Zero-rated vs exempt supply: Zero-rated supplies (exports, supplies to SEZs) allow ITC refund; exempt supplies do not.
Don’t confuse with Recommendation vs law: Council recommendations need amendments, circulars or notifications to take effect; they are not themselves law.
Don’t confuse with 56th vs 57th meeting: The 56th meeting (last year) focused on rate rationalisation and reduction. The 57th focused on process reforms: registration, returns, refunds and adjudication.
Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.
Why it matters
- Simpler registration, refunds and returns cut compliance cost, especially for small businesses.
- Higher prosecution and notice thresholds build a trust-based regime and cut litigation.
- Reflects cooperative federalism, as Centre and States decide jointly.
- Removing arrest powers and raising the prosecution threshold shift GST toward a trust-based regime and ease compliance fears.
- Automated refunds and wider ITC refunds improve working capital, especially for exporters and MSMEs.
- Limits on interception and common notice standards reduce harassment and litigation.
Problems
- Recommendations need law amendments by Parliament and State legislatures, which can delay rollout.
- Automated refunds and registration could be misused for fraudulent ITC without strong risk checks.
- States worry about revenue loss and weaker enforcement from relaxed prosecution and interception rules.
- Weaker arrest powers may reduce deterrence against fraud such as fake-invoice ITC rackets.
- Automated systems and risk-based sanctions need robust IT and data analytics to prevent wrongful refunds.
- Revenue loss from relaxed ITC blocks and refund changes strains Centre and State finances.
Way forward
- Use data analytics and risk-based scrutiny to balance automation with fraud control.
- Notify rule and law changes quickly with clear circulars and FAQs.
- Keep consensus-based decisions with transparent States' consultation.
- Keep strong, data-driven enforcement against fake ITC while relaxing rules for honest taxpayers.
- Test the new return and refund systems through public consultation and phased rollout.
- Issue circulars and FAQs quickly to give uniform field interpretation.
Put in your answer
GST scale: Registered taxpayers grew from about 60 lakh in 2017 to about 1.70 crore by September 2026.
Revenue growth: Gross GST collections were about ₹12.46 lakh crore in April-September 2026, up 11.6% year on year.
Article 279A: The Council embodies cooperative federalism under Article 279A (101st Amendment).
Cooperative federalism: The Council brings Centre and States together to decide GST matters under Article 279A.
- 2017Mains GS2 · Q11Salient features of 101st Amendment Act; whether it removes cascading taxes
- 2023Mains GS2 · Q15Significance of 101st Amendment and its reflection of federal accommodation
- 2020Mains GS3 · Q12Rationale of GST compensation law and COVID impact on federal tensions
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Statements
Ours, not from a UPSC paper
Consider the following statements:
- 1.The GST Council is a constitutional body established under Article 279A of the Constitution, inserted by the 101st Amendment Act.
- 2.The 57th GST Council recommended raising the prosecution threshold from ₹1 crore to ₹10 crore.
- 3.The Council recommended that no show cause notice be issued where the tax amount involved is less than ₹10,000.
Which of the statements given above is/are correct?
True or false?
1 of 8
Statements the way Prelims prints them. Say first, then see the fact.
1.The GST Council is a constitutional body established under Article 279A of the Constitution.
True. Article 279A, inserted by the 101st Amendment, establishes the Council.
2.The Council recommended that no show cause notice be issued where the tax amount involved is less than ₹10,000.
True. The minimum threshold for show cause notices would be ₹10,000.
3.The Council recommended that goods in transit would not be subject to confiscation under section 130 of the CGST Act.
True. Goods or conveyances in transit would not be subject to confiscation under section 130.
4.The Council recommended the maximum general penalty be reduced from ₹25,000 to ₹10,000.
True. The maximum general penalty falls from ₹25,000 to ₹10,000.
5.The Council recommended cutting the maximum general penalty under section 125 from Rs 25,000 to Rs 10,000.
True. Section 125 maximum general penalty falls to Rs 10,000.
6.The Council recommended a minimum threshold of Rs 10,000 of tax involved for issuing show cause notices.
True. No notice if the tax amount involved is under Rs 10,000.
7.Under the recommended interception rules, a conveyance can be intercepted in transit States on general suspicion.
False. Interception only on specific intelligence with authorisation of an officer not below Joint Commissioner; no interception in transit States.
8.The recommendations of the GST Council have binding legal force as soon as the Council announces them.
False. They take effect only through circulars, notifications and law amendments.
Written by us from the release, not by UPSC; checked by a second model.
Worth revising until Prelims 2028: most news questions come within two years of the event.