GST Council raises the monetary limit from 1cr to 2cr to launch prosecution

Federal indirect tax body, the Goods and Services Tax (GST) Council, on Saturday decided to raise the monetary threshold for launching prosecutions under GST law to ₹2 crores from ₹1 crore now, and also decided to de-criminalize three offenses in addition to issuing several clarifications to bring certainty to businesses, especially in automobile and insurance sectors.

The Council could decide on only 8 out of the 15 agenda items due to paucity of time, Finance Minister Nirmala Sitharaman said, adding the items not considered included one about setting up appellate tribunals for GST.

No new taxes have been brought, Sitharaman said in the deliberations at the GST Council’s 48th meeting.

The report of a ministerial panel on capacity-based taxation for tobacco and gutka, which was also not taken up today, is expected to figure out in the next meeting.

The report of the GoM was not even circulated to GST Council members, he added.

“In this Council meeting, there has not been any tax increase on any item. Everything that has been done is to issue clarifications where the ambiguity of interpretation prevailed,” Sitharaman explained.

He further said the Council agreed to raise the threshold of launching prosecution to Rs 2 crore from the present Rs 1 crore.

The Council also decided to lower the compounding amount from the present range of 50% to 150% of the tax amount to the range of 25% to 100% in a bid to improve the ease of doing business.

The GST Council is the highest decision-making body of the one-nation, one-tax Goods and Services Tax (GST) regime. It is headed by the Union Finance Minister and all states and UT are represented in the body.

The Council also made several clarifications to bring more certainty to taxation and to ensure that the same practice is followed in all states.

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