The CBIC has issued Instruction No. 02/2026-GST dated 30 October 2026, directing its field formations to implement certain key recommendations of the 57th GST Council meeting held on 8 October 2026, even before the corresponding amendments are formally incorporated into the CGST Act, 2017 and the respective State GST Acts. Although the GST Council had recommended that these amendments should come into force from 1 April 2027, the Central Government has decided, as an interim trade-facilitation measure, to implement the reforms immediately through administrative instructions. These instructions shall remain in force until the recommended legislative amendments come into effect.

The Instruction introduces significant administrative changes in three areas, namely, withdrawal of arrests under GST, rationalisation of e-way bill interception and verification procedures, and prescription of a minimum monetary threshold for issuance of show cause notices under Sections 73, 74 and 74A of the CGST Act, 2017.

Key highlights of the Instruction

1. No further arrests under GST

The GST Council had recommended omission of Section 69 of the CGST Act, 2017, which provides for the power to arrest. Pending the necessary legislative amendment, CBIC has directed all CGST field formations that no further arrests shall be carried out under GST.

Accordingly, the field formations are required to discontinue making arrests under the GST law during the subsistence of these instructions.

2. E-way bill interception and verification restricted to specified circumstances

The Instruction significantly rationalises the interception and verification of conveyances carrying goods. The field formations have been directed to follow the following safeguards:

• Interception only on specific intelligence: A conveyance can be intercepted only on the basis of specific intelligence duly authorised by an officer not below the rank of Joint Commissioner. Such officer must record in writing the reasons to believe that the goods are being transported in contravention of the CGST Act or the Rules made thereunder.
• Territorial jurisdiction of the intercepting officer: The proper officer may inspect the conveyance and goods only where the supplier or recipient is registered or located (where unregistered) within the State or Union Territory falling under the officer’s jurisdiction. If inspection establishes a contravention, the officer may detain or seize the goods in accordance with Section 129 of the CGST Act.
• Where neither supplier nor recipient falls within jurisdiction: If neither the supplier nor the recipient is registered or located within the jurisdiction of the authorising officer, and the intercepting officer forms a prima facie opinion that the goods are being transported in contravention of the Act, the officer shall transmit the information to the jurisdictional proper officer concerned. The conveyance and goods must be allowed to pass through unhindered, and the jurisdictional authority shall examine the information and take necessary action.
• Exception where no e-way bill or supporting document is available: Where no e-way bill has been generated and no document evidencing the origin or destination of the goods is produced, the intercepting officer may inspect, detain or seize the goods or conveyance irrespective of the jurisdiction of the supplier or recipient.
• No detention or seizure on other grounds: Goods and conveyances in transit shall not be detained or seized for any reason other than those specified in the Instruction.
• No confiscation under Section 130: Goods or conveyances in transit shall not be confiscated under Section 130 of the CGST Act, 2017.

3. Minimum threshold of ₹10,000 for issuance of show cause notices

To reduce low-value litigation and compliance burdens, the GST Council had recommended amendments to Sections 73, 74 and 74A of the CGST Act to prescribe a minimum monetary threshold of ₹10,000 for issuance of show cause notices.

Pending the legislative amendments, CBIC has directed that show cause notices shall not be issued where the aggregate amount involved is below ₹10,000.

The threshold is to be computed by aggregating the amounts involved under the following enactments:

• Central Goods and Services Tax Act, 2017;

• State Goods and Services Tax Act, 2017;

• Integrated Goods and Services Tax Act, 2017;

• Union Territory Goods and Services Tax Act, 2017; and

• Goods and Services Tax (Compensation to States) Act, 2017.

Thus, the ₹10,000 threshold is based on the combined amount of CGST, SGST, IGST, UTGST and Compensation Cess, rather than being applied separately to each tax component.

The Complete Instruction can be accessed at https://cdn.taxo.online/wp-content/uploads/2026/10/Instructions_02-2026.pdf