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# GST Council's 57th meeting rescheduled to Oct 7; arrest-power reform still on the table
- URL: https://espresso.cafecito.tech/gst-council-reform-arrest-powers-itc-refunds/
- Published: 2026-10-06T11:36:42.000Z
- Updated: 2026-10-06T11:36:42.000Z
- Author: Barista @ Cafecito
- Tags: Policy & Geopolitics, Politics, Business Regulation, India, GST Council

> India's 57th GST Council meeting now lands Oct 7 after a BRICS-related reschedule, with arrest-power reform still on the agenda. The proposal would restrict criminal detention to major fraud and deliberate evasion, letting officers handle most disputes administratively. Also up: wider input tax credit, refunds on accumulated ITC for sectors like pharma and renewables, and cutting routine e-way bill checks. Nothing takes effect until the council votes and the government issues amendments — so the endorsement and timeline remain open.

India's 57th GST Council meeting, moved from its planned September 12 slot, is now set for October 7, 2026\. The Union finance ministry said October 5 the session was rescheduled because hosting the BRICS Summit in New Delhi and preparing administratively for that international event conflicted with the originally planned agenda. The final agenda of the rescheduled meeting has yet to be released.

### What's on the table

The council is weighing four reforms: curtailing GST arrest powers to target major fraud and deliberate evasion; widening input tax credit (ITC) scope under Section 17(5) to cover corporate life and health insurance, telecom towers, pipelines, motor vehicle hiring, and outdoor catering; allowing refunds on accumulated ITC for sectors including pharmaceuticals, textiles, footwear, fertilizers, renewable energy, and electric vehicles; and limiting routine e-way bill checks in transit states in favor of intelligence-based verification.

Nothing takes effect immediately under any scenario. Approvals require a council vote and subsequent government notification, with legislative amendments needed afterward.

### The enforcement context

The decriminalization push follows recent arrests — though the timing does not, by itself, establish a causal link. The linked action directly cited is the September 30 detention of Gyaan Chand Jaiswal (alias Babloo Jaiswal) and Raaj Jaiswal by the Enforcement Directorate under Section 19 of the Prevention of Money Laundering Act, 2002, with the pair held at the Special PMLA Court in Ranchi. The case alleges creation of 135 shell companies generating bogus invoices, with fake ITC of ₹54.33 crore routed through entities including Maa Sharda Endeavours Pvt Ltd.

That is a PMLA matter, separate from GST law itself. Officials are reported to have cited "recent arrests of high-ranking functionaries under GST provisions" as an urgency driver, with a stated goal of removing impediments for traders and reducing apprehension where disputes are interpretational or bona fide. In August, the Anti-Evasion Branch of CGST's Secunderabad Commissionerate arrested the alleged mastermind of a ₹32.28 crore ITC fraud involving steel and TMT-bar trading, tied to non-existent invoice issuers with cancelled GST registrations, under Section 69 of the CGST Act, 2017.

### What it would change

GST arrest powers currentlly sit with tax officers, who can detain people accused of evasion. The proposal would confine that authority to major fraud and deliberate evasion, so officers would handle most disputes administratively — through notices, adjustments, and appeals — rather than through criminal detention. The government has said it would preserve a strong criminal response to organized fake-invoicing schemes.

On refunds, the inverted duty structure leaves manufacturers in sectors where output is taxed below input carrying unrelieved ITC. The proposal would let those sectors claim refunds on accumulated credit, freeing working capital currently locked in tax records.

### What's unresolved

The decisive unknown is what the council actually endorses and how fast legislation follows. Removing arrest provisions applies only if the council approves and parliament amends the relevant acts; an individual arrest ruling does not change the law for anyone else. The interplay between PMLA — a separate criminal statute — and any GST decriminalization sits outside the council's direct remit. Whether widening ITC scope and permitting refunds, both revenue-negative measures, survives against the council's stated aim of preserving revenue collection remains to be seen when the rescheduled session convenes October 7.