The GST Council, chaired by Finance Minister Nirmala Sitharaman, on Thursday approved the removal of tax officers’ powers to arrest and raised the threshold for prosecution from Rs 1 crore to Rs 5 crore.The council also recommended doing away with the minimum penalty. The penalty — be it a fine, jail, or both — is now subject to judicial discretion in each instance.The Finance Ministry said the general penalty, applicable where no specific penalty was provided, would be reduced from Rs 25,000 to Rs 10,000.The changes approved by the GST Council, which consists of Union and state finance ministers, will be implemented from April 1, 2027.The council cleared a proposal under which a taxpayer who files returns late, makes an error or delays payment will face recovery proceedings, interest and a proportionate penalty, with no additional punitive action.Speaking after the meeting, Sitharaman said the council focused on reforms related to processes intended to enhance the ease of doing business and reducing compliance burdens rather than altering GST rates.”When we say arrest has been removed, it has been removed from the control of a tax officer,” Sitharaman explained. However, she said criminal prosecution would still be an option under the GST law. “The law allows for the prosecution of individuals in cases of criminal activity,” she said.In further support for taxpayers, the council suggested that notices involving amounts below Rs 10,000 should not be issued and any pending notices under this limit would be withdrawn.Sitharaman said the GST reform process had been guided by the principle of trust.Among the important decisions, the council approved the automatic acceptance of regular modifications in GST registration, a step expected to reduce administrative hold-ups and enhance compliance efficiency.In addition, the government will expedite refunds by shortening the acknowledgment period for refund claims from 15 to 10 days.In a major relief for taxpayers, the FM declared that 90 per cent of eligible refund claims would be processed within three working days, a step designed to enhance liquidity for businesses and exporters.Furthermore, the council expanded the accessibility of input tax credit, enabling companies to claim credits on extra spending categories, such as telecom towers and insurance coverage provided by employers.