57th GST Council Recommends Common Standards for GST Notices, ₹10,000 Threshold for Show Cause Notices and Lower Penalties

The 57th Meeting of the GST Council was held on October 08, 2026, in New Delhi, under the chairpersonship of the Union Finance & Corporate Affairs Minister, Smt. Nirmala Sitharaman. At the meeting, the GST Council made recommendations relating to process reforms, primarily covering registration, returns, refunds and adjudication; clarifications regarding the applicability of GST on supplies of certain goods and services; and other measures for trade facilitation and streamlining GST compliances.

Reforms related to dispute resolution: The GST Council recommended issuance of a circular to provide comprehensive guidelines to the tax officers to streamline process of issuance of demand notices, adjudication orders and appeal orders, inter alia, covering issues relating to, quality of demand notices and adjudication/appeal orders, timely issuance such notices/orders, proper invocation of grounds of fraud, wilful misstatement or suppression of facts only based on merits in each case, adherence to the principles of natural justice including the conduct of personal hearings.

Further, to reduce compliance burden and litigation, the Council further recommended amendment in section 73, section 74 and section 74A of the CGST Act, 2017, to inter-alia provide:

• minimum threshold of Rs. 10,000/- (CGST + SGST + IGST + Cess) for issuance of show cause notices. Thus, no notices will be issued if the tax amount involved is less than Rs. 10,000/-. The Council also recommended for a statutory provision to provide that any notices and appeals, involving an amount less than Rs. 10,000, and pending on date of the provision for the said minimum threshold coming into force, will be decided as if the said threshold of Rs. 10,000/- had been in force when the notice was issued.
• for deeming penalty amount as ‘charge’, where full tax amount is voluntarily paid, alongwith interest and penalty, within the specified time limit.
• for a reduced penalty of 5% in non-fraud cases, where tax along with interest is discharged within 30 days (under section 73) or 60 days (under section 74A) of the adjudication order.
• removal of condition of minimum penalty of Rs. 10,000/-, in non-fraud cases.

The GST Council recommended reducing the maximum general penalty under section 125 of the CGST Act, 2017 from Rs. 25,000/- to Rs. 10,000/-.

The Press Release can be accessed at:  https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2320934&reg=48&lang=1