Background
1. The Goods and Services Tax Council, in the 57th Meeting held on 8th October 2026, recommended key reforms to improve ease of doing business and reduce compliance burden under Goods and Services Tax.
2. The recommendations included:
Withdrawal of arrest powers under GST by omitting Section 69 of the Central Goods and Services Act, 2017 (‘CGST Act’);
Rationalisation of e-way bill interception and verification procedures; and
Non-issuance of show cause notices involving amounts below Rs. 10,000.
3. As these measures require legislative amendments, and they are proposed to take effect from 1 April 2027.
Interim Instruction issued by CBIC
Pending the legislative amendments, the Central Board of Indirect Taxes and Customs (‘CBIC’) has issued Instruction No. 02/2026-GST dated 30 October 2026 directing field formations to implement the GST Council's recommendations as an interim trade facilitation measure along with directions to the Principal Chief Commissioners and Chief Commissioners to monitor implementation of the Instruction.
Key directions issued
Arrest provisions
The GST Council has recommended omission of Section 69 of the CGST Act relating to arrest powers. Accordingly, all CGST field formations have been directed that no further arrests shall be carried out under GST.
E-Way Bill Verification and Detention
The Instruction restricts interception of goods in transit by providing that:
Conveyances can be intercepted only on specific intelligence and with authorization by an officer not below the rank of Joint Commissioner, who will record reasons in writing for interception of the goods.
Inspection can be carried out only where the supplier or recipient falls within the jurisdiction of the inspecting officer (i.e. the supplier/recipient are either registered or located (if not registered) within the said jurisdiction). In case of contravention of the provisions of CGST Act or the rules made thereunder, the proper officer of the supplier’s or recipient’s jurisdiction may detain or seize the goods in accordance with the provisions of section 129 of CGST Act.
In cases where both the supplier and recipient are not within the jurisdiction of the intercepting officer, information must be shared by the officer with the jurisdictional authority of the supplier or recipient (for taking further action), and the goods shall be allowed to move without hindrance. This action shall be undertaken by the intercepting officer if he is of the prima facie opinion that the goods are being transported in contravention of the CGST Act, 2017.
Where neither an e-way bill nor any document evidencing the origin or destination of the goods is available, detention, seizure or inspection can be undertaken irrespective of jurisdictional limitations.
The goods and the conveyance in transit shall not be detained or seized for any reason other than as mentioned above.
The goods or conveyances in transit shall not be confiscated under section 130 of CGST Act.
Minimum threshold for issuance of Show Cause Notices
It has been directed that show cause notices may not be issued in cases where the amount involved is below INR 10,000/- (CGST + SGST + IGST + Compensation Cess).
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