Why in news
- The GST Council recommended key compliance relaxations including raising the prosecution monetary threshold and removing certain arrest provisions.
Key terms
Article 279A
Constitutional provision enabling the creation and operation of the Goods and Services Tax Council.
Input Tax Credit
Tax deduction allowed to businesses for GST paid on inputs used during production or service delivery.
Prosecution Threshold
Minimum monetary limit of tax evasion required before criminal proceedings can be initiated against an offender.
Trade Margin Capping
Regulatory ceiling placed on the maximum mark-up allowed between manufacturer price and retail price.
What is the GST Council?
- Constitutional body established under Article 279A of the Indian Constitution following the 101st Constitutional Amendment Act, 2016.
- Chaired by the Union Finance Minister and comprising State Finance/Taxation Ministers to recommend GST rates, exemptions, and administrative thresholds.
Key Changes and Recommendations
- Prosecution threshold: Raised from ₹1 crore to ₹5 crore tax amount, except for offences involving fake invoices.
- Penalty reduction: General penalty for minor non-compliances reduced from ₹25,000 to ₹10,000.
- De-criminalisation: Removal of arrest provisions for lower-severity procedural tax defaults.
- Trade facilitation: Wider eligibility for input tax credit (ITC) and faster tax refund processing to ease working capital constraints.
Why It Matters
- Reduces tax terrorism and arbitrary harassment of genuine business entities.
- Improves India's ease of doing business ecosystem and simplifies compliance for small and mid-sized enterprises.
Prelims facts
- GST Council is chaired by the Union Finance Minister under Article 279A.
- The prosecution threshold under GST law has been recommended to rise to ₹5 crore.
Mains discussion
- Decriminalisation of tax laws balances revenue protection with easing the business compliance burden.
Source: PIB English
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.
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2025 · Q87 · General Studies · 2 marks
Consider the following statements: I. On the dissolution of the House of the People, the Speaker shall not vacate his/her office until immediately before the first meeting of the House of the People after the dissolution. II. According to the provisions of the Constitution of India, a Member of the House of the People on being elected as Speaker shall resign from his/her political Ammediately party III. The Speaker of the House of the People may be removed from his/her office by a resolution of the House of the People passed by a majority of all the then Members of the House, provided that no resolution shall be moved unless at least fourteen days' notice has been given of the intention to move the resolution. Which of the statements given above are correct? -
2023 · Q6 · GS III · 10 marks
Discuss several ways in which microorganisms can help in meeting the current fuel shortage. -
2018 · Q66 · General Studies · 2 marks
When the alarm of your smartphone rings in the morning, you wake up and tap it to stop the alarm which causes your geyser to be switched on automatically. The smart mirror in your bathroom shows the day's weather and also indicates the level of water in your overhead tank. After you take some groceries from your refrigerator for making breakfast, it recognises the shortage of stock in it and places an order for the supply of fresh grocery items. When you step out of your house and lock the door, all lights, fans, geysers and AC machines get switched off automatically. On your way to office, your car warns you about traffic congestion ahead and suggests an alternative route, and if you are late for a meeting, it sends a message to your office accordingly. In the context of emerging communication technologies, which one of the following terms best applies to the above scenario? -
2016 · Q97 · General Studies · 2 marks
With reference to the Agreement at the UNFCCC Meeting in Paris in 2015, which of the following statements is/are correct? 1. The Agreement was signed by all the member countries of the UN and it will go into effect in 2017. 2. The Agreement aims to limit the greenhouse gas emissions so that the rise in average global temperature by the end of this century does not exceed 2°C or even 1.5°C above pre-industrial levels. 3. Developed countries acknowledged their historical responsibility in global warming and committed to donate $1000 billion a year from 2020 to help developing countries to cope with climate change. Select the correct answer using the code given below -
2025 · Q56 · General Studies · 2 marks
Consider the following statements : With reference to the Constitution of India, if an area in a State in declared as Scheduled Area under the Fifth Schedule I. the State Government loses its executive power in such areas and a local body assumes total administration II. the Union Government can take over the total administration of such areas under certain circumstances on the recommendations of the Governor Which of the statements given above is/are correct?