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57th GST Council Proposes Minimum ₹10,000 Notice Threshold
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57th GST Council Proposes Minimum ₹10,000 Notice Threshold

October 9, 2026

The 57th GST Council meeting recommended raising the threshold for tax notices under Sections 73 and 74 to ₹10,000, aiming to reduce litigation burden on small taxpayers.

Higher Threshold Proposed for GST Demand Notices

The 57th GST Council has recommended setting a minimum threshold of ₹10,000 for issuing tax notices under Sections 73 (tax liability without fraud) and 74 (tax liability with fraud), along with Section 74A (related proceedings). The objective is to reduce procedural harassment and administrative burden on small taxpayers involving negligible demands.

Additionally, the Council proposed raising the threshold for initiating prosecution from ₹10 lakh to ₹5 crores, aligning with the government’s broader goal of promoting compliance over punitive action for minor infractions. These proposals aim to streamline enforcement and focus departmental resources on significant non-compliance.

Once notified, these changes will directly impact audit strategies and litigation planning. Tax practitioners should anticipate fewer show-cause notices for low-value discrepancies and recalibrate risk assessment models for prosecution exposure under the GST regime.

Practice Areas:taxgst

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