A reported proposal to set a higher monetary floor for GST prosecution is expected to come before the Council on October 8. The change could narrow criminal proceedings for specified monetary offences, but describing it requires a distinction between statutory punishment thresholds and administrative prosecution guidelines.
Recent reports describe a proposed move from ₹1 crore to ₹5 crore. That formulation does not mean that every existing GST offence is prosecutable from ₹1 crore, or that ₹5 crore is already a universal statutory prosecution threshold.
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Section 132 contains different punishment slabs. Its monetary structure includes offences exceeding ₹5 crore and those exceeding ₹2 crore but not ₹5 crore. Following the 2023 amendment, the ₹1 crore-to-₹2 crore slab specifically concerns the fake-invoice offence in clause (b). Other provisions, including those concerning falsification and repeat convictions, require separate examination.
CBIC’s September 1, 2022 prosecution guidelines already state that prosecution should normally be launched where the relevant amount exceeds ₹5 crore. They provide exceptions for habitual evaders and arrest cases. These departmental directions are not equivalent to rewriting the statutory offence provisions.
The same guidelines caution against prosecution merely because a demand has been confirmed. They also distinguish technical disputes and differences over interpretation from cases supported by evidence of criminal intent.
If adopted, a statutory ₹5 crore floor could therefore provide a different form of protection from an administrative policy. Its practical effect would depend on the offences covered, exceptions retained and treatment of repeat conduct.
Companies and their officers would also need clarity on pending complaints and the application of any reduced punishment provisions. Raising a criminal threshold would not automatically cancel the underlying tax demand, interest or civil penalty.
The Council’s final recommendation and the eventual amendment text will determine whether the reform delivers a uniform monetary rule or a more selective restructuring of GST offences.
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