Why in news
- The GST Council is considering major legislative reforms aimed at decriminalising tax offences and curbing arbitrary enforcement powers.
Key terms
Decriminalisation
The removal of criminal penalties for certain actions, replacing them with civil or monetary penalties.
Input Tax Credit (ITC)
The tax paid on inputs that can be set off against the tax liability on output sales.
GST Council
A constitutional body under Article 279A that makes recommendations to the Union and States on GST matters.
Compounding of Offences
A settlement process where an offender avoids criminal prosecution by paying a specified fine.
What is the CGST Act, 2017 framework?
- The Central Goods and Services Tax (CGST) Act, 2017 outlines tax compliance, inspection, search, seizure, and arrest powers of tax officials.
- Sections 132 and 69 grant tax authorities powers to arrest and initiate criminal proceedings for specified tax evasions and fraudulent input tax credit claims.
Key proposed amendments
- Scrapping or restricting tax officers' direct powers of arrest for minor or non-fraudulent compliance defaults.
- Decriminalising procedural offences under the GST regime by shifting focus towards financial penalties rather than prosecution.
- Staggered implementation of modified enforcement provisions starting early next year.
Why it matters
- Reduces tax harassment and improves the ease of doing business for commercial taxpayers.
- Prevents arbitrary detention while maintaining civil monetary recovery mechanisms.
Prelims facts
- GST Council recommendations require a three-fourths weighted majority of members present and voting.
Mains discussion
- Balancing tax enforcement powers with the ease of doing business and protection from tax terrorism.
Source: Hindu Business Line
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
-
2019 · Q69 · General Studies · 2 marks
In India, which of the following review the independent regulators in sectors like telecommunications, insurance, electricity, etc.? 1. Ad Hoc Committees set up by the Parliament 2. Parliamentary Department Related Standing Committees 3. Finance Commission 4. Financial Sector Legislative Reforms Commission 5. NITI Aayog Select the correct answer using the code given below -
2026 · Q18 · General Studies · 2 marks
Consider the following assertion: The genesis of political alliances based on community lay in the very nature of the Montague- Chelmsford Reforms, 1919. Which of the following statements support/supports the above assertion? 1. Reforms retained and extended the principle of separate electorates. 2. Separate electorates were supposed to counter Indian nationalism, which was growing stronger. 3. Deprived classes rallied around the favours inherent in separate electorates. Select the answer using the code given below: -
2026 · Q98 · General Studies · 2 marks
With reference to different Committees in India, consider the following details: 1. R.N. Malhotra Committee - Comprehensive reforms of Insurance sector in India - Insurance Regulatory and Development Authority of India. 2. L.C. Gupta Committee - Preparing a roadmap for the introduction of derivatives trading in India - Securities and Exchange Board of India. 3. Urjit R. Patel Committee - Preparing a roadmap for reforming bank lending to the Housing sector - Reserve Bank of India. 4. Y.H. Malegam Committee - Preparing a roadmap for reforms in Microfinance sector in India - Reserve Bank of India. In how many of the above rows are all the details correctly matched? -
2025 · Q2 · GS II · 10 marks
Comment on the need of administrative tribunals as compared to the court system. Assess the impact of the recent tribunal reforms through rationalization of tribunals made in 2021. -
2025 · Q11 · GS I · 15 marks
Mahatma Jotirao Phule's writings and efforts of social reforms touched issues of almost all subaltern classes. Discuss.