GST 2.0 may replace arrests with fines for tax defaulters

The government is considering replacing arrest provisions with fines for GST tax defaulters as part of the second phase of GST reform. This move follows the revenue stabilisation achieved after last year's rate rationalisation exercise.

The shift aims to make the tax compliance framework less punitive while maintaining enforcement mechanisms against non-compliant taxpayers. By replacing criminal provisions with financial penalties, the government seeks to balance its need for tax compliance with a more proportionate approach to violations.

The proposed changes are expected to simplify the penalty structure for defaulters under the new GST 2.0 framework, marking a significant evolution in how the tax authority addresses non-compliance.