In a significant move for trade facilitation, the Central Board of Indirect Taxes and Customs (CBIC) has issued instructions to its field formations to immediately stop carrying out any arrests and also implement the recommendations of the GST Council on rationalised conditions for e-way bill inspections and show-cause notices.The missive to all Central Goods and Services Tax (CGST) field formations comes months before the proposed legislative amendments were to take effect from April 1, 2027.All the measures — scrapping of arrest powers, change in procedures for e-way bill inspection and verification, and a minimum Rs 10,000 threshold for show-cause notices — require amendments to CGST Act, 2017 and corresponding provisions of the respective state GST laws.This comes after legal experts had raised concerns that the recommendations made by the GST Council in its 57th meeting lacked legal backing without the legislative amendments and may result in arrests and issuance of notices till the amendments were brought in the upcoming Winter Session of Parliament.The CBIC said these measures are “trade friendly and would help in ease of living and doing business for the taxpayers, by reducing hardships owing to arrests, random checks of conveyances in transit and issuance of show cause notices in cases involving small amounts, making the law more trust based and forward looking, as well as reducing the compliance cost arising out of low value litigations.”The GST Council had recommended in its October 8 meeting that the amended provisions may come into force with effect from April 1 next year. “However, as an interim measure of trade facilitation, it has been decided by the Central Government that till these amendments in the Act are brought into effect, the aforesaid reforms shall be implemented by the field formations of the CBIC,” the directive said.The GST Council has recommended withdrawal of arrest powers under GST by omission of Section 69 of CGST Act, 2017. “All CGST field formations are accordingly directed that no further arrests may be carried out under GST,” the CBIC said. Section 69 of the CGST Act provides for the power to arrest after approval by the Commissioner.Process reformsStory continues below this adThe GST Council in its meeting earlier this month had approved sweeping process reforms, ranging from the removal of arrest powers from tax officers at the pre-prosecution stage to a minimum threshold of Rs 10,000 being put in place for issuance of show-cause notices effective retrospectively.For e-way bill verification, the Council had recommended that vehicles carrying goods can only be stopped by tax officers from either the state of the supplier or the recipient, and only on the basis of “specific intelligence” and due authorisation.In the directive, the CBIC said a conveyance should only be intercepted based on “specific intelligence which is duly authorised by an officer not below the rank of Joint Commissioner, who must record, in writing, the reasons to believe that the goods being carried in the conveyance are being transported in contravention of the provisions of CGST Act, 2017 or the rules made thereunder”.Also, in cases where neither the supplier nor the recipient is registered or located within the state or the union territory of the jurisdiction of the authorising officer, and the intercepting officer upon interception of a conveyance and verification of documents is of the prima facie opinion that the goods are being transported in contravention of the CGST Act, then the officer will only transmit the information to the proper officer having jurisdiction over the supplier or recipient, after allowing the conveyance and goods to pass through unhindered. Then, the jurisdictional authority receiving such information shall examine the information and take necessary action.Story continues below this adWhere neither the e-way bill has been generated in respect of goods in the conveyance, nor any document to show the origin or destination of the goods is produced, the goods or conveyance can be inspected, detained or seized by the intercepting officer, irrespective of the jurisdiction of the supplier or the recipient. The goods and the conveyance in transit will not be detained or seized for any other reason than the ones mentioned in the directive.For show-cause notices, the CBIC directive said that there will be a minimum threshold of Rs 10,000 for issuance of show-cause notices to reduce the low-value litigation and compliance burden for taxpayers. “…the show cause notices may not be issued in cases where the amount involved is below Rs 10,000 (the sum of amounts under the CGST Act,2017, the SGST Act, 2017, the IGST Act, 2017or the UTGST Act, 2017 and cess levied under the GST (Compensation to States) Act, 2017),” it said.The CBIC urged Principal Chief Commissioners and Chief Commissioners to monitor the implementation of these instructions and to bring any difficulty in implementation of these instructions to the notice of the Board.