GST Council raises prosecution threshold to ₹5 crore, reduces penalties to ₹10,000
GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Prelims + Mains·
Why in news
The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, decided to increase the prosecution threshold and reduce penalties to enhance trade stability.
Background
The GST Council raised the prosecution threshold from ₹1 crore to ₹5 crore and reduced penalties from ₹25,000 to ₹10,000. Additionally, late fees are waived for businesses with a turnover up to ₹5 crore.
Facts for Prelims
- FactProsecution threshold for GST violations increased from ₹1 crore to ₹5 crore
- FactGST penalties reduced from ₹25,000 to ₹10,000
- FactLate fee waiver applicable for businesses with turnover up to ₹5 crore
For Mains
Q. Discuss how the GST Council's recent measures to reduce penalties and increase prosecution thresholds aim to balance tax compliance with ease of doing business in India.
Dimensions to cover in your answer
- Compliance friction: Reducing penalties for minor infractions to minimize litigation and administrative burden
- Revenue vs. Ease of Doing Business: Balancing the need for strict enforcement against the goal of fostering a stable trading environment
Keywords: Ease of Doing Business · Tax Compliance · GST Council · Fiscal Federalism · Trade Stability
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