New Delhi/Bengaluru: Karnataka Chief Minister D K Shivakumar on Thursday hinted at “good news” on the state’s long-pending central grants following his meeting with the Union Finance Minister Nirmala Sitharaman.
He, however, opposed the proposed criminal action against GST non-payers.
Addressing reporters at Karnataka Bhavan in New Delhi after the GST Council meeting, Shivakumar said the meeting had gone well and Karnataka’s concerns were accepted by other states.
Shivakumar also opposed the proposal to register criminal cases and arrest individuals for non-payment of GST, advocating instead for a focus on recovering dues. He argued that the enforcement approach should align with the Income Tax Department’s practices and that unnecessary arrests of business owners were inappropriate.
He said, “The GST Council meeting went exceptionally well. Everyone agreed with Karnataka’s points. The proposal to register criminal cases and arrest those who do not pay GST came up for discussion. I argued that rules and regulations similar to the Income Tax Department should be followed, and that it is inappropriate for officials to unnecessarily arrest business owners. We should focus on collecting whatever amount is due from them; arresting them is not right. Except for one state, all other states agreed with this position.”
Shivakumar emphasised the importance of protecting business owners from aggressive enforcement and administrative overreach, recommending that the focus remain on recovery rather than punitive action. He reiterated, “Recover whatever money is due, but arrest is not right. ED-type action should be removed.”
The Chief Minister’s remarks followed the 57th GST Council meeting held at Bharat Mandapam under the chairmanship of Union Finance Minister Nirmala Sitharaman. The Council approved a comprehensive package of enforcement and procedural reforms but decided not to alter existing GST rate slabs. It announced that rate-related matters will now be reviewed only once annually at a dedicated meeting to provide greater policy predictability for industry.
The reforms, effective from April 1, 2027, include the complete removal of GST officers’ power to arrest individuals. The monetary threshold for initiating prosecution was raised fivefold from Rs 1 crore to Rs 5 crore. Additionally, the general penalty for offences where no specific penalty is prescribed has been reduced from Rs 25,000 to Rs 10,000, and minimum punishments have been eliminated, leaving decisions on imprisonment or fines to the courts.
To alleviate working capital constraints, the Council approved fast-tracked, automated refunds, under which businesses will receive 90 per cent of claimed refunds within 13 days. The time for officers to acknowledge refund claims has been shortened from 15 days to 10 days.
