The Central Board of Indirect Taxes and Customs (CBIC) has told its field officers to stop arresting taxpayers under GST, to stop routinely intercepting goods vehicles, and to stop issuing small tax notices. Instruction No. 02/2026-GST, dated 30 October 2026, puts three recommendations of the GST Council's 57th meeting — held on 8 October 2026 in New Delhi — into effect immediately, months before the law itself is amended. The GST Council has recommended that the amended provisions come into force from 1 April 2027; until those amendments arrive, this instruction is what governs officers on the ground.
In plain business-owner language: for now, a GST officer cannot arrest you, cannot routinely stop your truck in a State it is merely passing through, and cannot send you a tax notice for less than Rs 10,000. None of this is yet a change to the GST law itself — it is a binding direction to the officers who enforce it, and it lasts only until Parliament amends the CGST Act. That distinction matters, and this article keeps it visible throughout, because treating an interim instruction as a permanent amnesty would be a costly mistake.
💡 In one line: CBIC has directed all CGST field formations to carry out no further arrests under GST, to intercept conveyances only on specific intelligence authorised by a Joint Commissioner or above, and to issue no show-cause notice where the amount involved is below Rs 10,000 — as an interim measure until the GST Council's recommended amendments to the CGST Act come into force.
What the instruction says
The instruction is issued by the GST Policy Wing of CBIC, Ministry of Finance, Department of Revenue, and is signed by Gaurav Singh, Commissioner (GST). It carries File No. CBIC-20001/3/2026-GST and is addressed to all Principal Chief Commissioners and Chief Commissioners of Central Tax and all Principal Directors General and Directors General of Central Tax. Its subject, in full, is implementing certain recommendations of the GST Council in its 57th meeting held on 8 October 2026 at New Delhi, prior to the legislative amendments.
The background the instruction itself gives is short and important. The 57th GST Council recommended three things: omission of the arrest provisions, rationalisation of the e-way bill related interception and verification procedures, and a minimum threshold for the issuance of show-cause notices under Sections 73, 74 and 74A of the CGST Act, 2017. All three would require amendment to the CGST Act, 2017 and the corresponding State GST Acts. The Council recommended that the amended provisions may come into force with effect from 1 April 2027. But, the instruction says, as an interim measure of trade facilitation, the Central Government has decided that until those amendments are brought into effect, the reforms shall be implemented by CBIC's field formations. The instructions expressly remain in force until the CGST Act amendments recommended at the 57th meeting come into force.
Change 1: No further arrests under GST
Section 69 of the CGST Act is the provision that empowers arrest in GST cases. The GST Council recommended withdrawing that power by omitting Section 69 altogether. The instruction gives effect to that recommendation in the only way an executive instruction can: it directs that no further arrests may be carried out under GST by any CGST field formation.
Read that direction carefully, because its wording is doing a lot of work. It says "no further arrests" — it is a forward-looking direction to officers, not a declaration that Section 69 has already vanished from the statute book. Section 69 remains in the Act until Parliament omits it. What has changed, with immediate effect for practical purposes, is that the officers who would exercise that power have been told not to. A taxpayer who is threatened with arrest in a GST matter after 30 October 2026 can point to this instruction and ask on what authority the officer is proceeding, when the Board has directed that no further arrests be carried out.
What the instruction does not say is equally important, and is marked here rather than filled in. It does not say anything about arrests already made, or about proceedings already underway, before 30 October 2026. Whether and how the direction affects those cases is NOT CHECKED in this article, because the instruction's text does not address it. Do not read "no further arrests" as a release of anyone already arrested or as a bar on other proceedings — tax demands, penalties and prosecution processes that do not depend on arrest are untouched by this direction, and the instruction does not claim otherwise.
Change 2: E-way bill checks — interception only on specific intelligence
The second set of directions rationalises e-way bill related interception and verification, by way of amendments the Council recommended to Sections 68, 129 and 130 of the CGST Act. Until those amendments arrive, CBIC's field formations must follow six rules. They are worth quoting in substance, because transporters and their customers will live by them:
(i) Specific intelligence plus senior authorisation. A conveyance should be intercepted only on the basis of specific intelligence, duly authorised by an officer not below the rank of Joint Commissioner, who 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. Random or routine interception is out; a recorded reason, signed off at Joint Commissioner level or above, is in.
(ii) Jurisdiction limits inspection. The officer who intercepts a conveyance may inspect it and the goods only if the supplier or the recipient is registered in — or, if unregistered, located in — the State or Union Territory of that officer's jurisdiction. If that inspection shows the goods being transported or stored in transit contravene the CGST Act or rules, the officer may detain or seize them under Section 129.
(iii) Transit States must let the vehicle pass. Where neither the supplier nor the recipient is registered or located in the authorising officer's State or Union Territory, and the intercepting officer is prima facie of the opinion that the goods are being transported in contravention of the Act, the officer must 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. The receiving jurisdictional authority must then examine the information and take necessary action. This is the end of the transit-State stop as a routine tool: a truck merely passing through a State can no longer be held there on suspicion alone.
(iv) The no-documents exception. There is one important exception to the jurisdiction limits. Where neither an e-way bill has been generated for the goods nor any document showing 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 supplier's or recipient's jurisdiction. In other words, the protection of rules (ii) and (iii) depends on the vehicle carrying its papers. A truck travelling without an e-way bill and without origin or destination documents gets no benefit from the new limits.
(v) No detention or seizure beyond these cases. Goods and conveyances in transit must not be detained or seized for any reason other than those stated above.
(vi) No confiscation in transit. Goods or conveyances in transit must not be confiscated under Section 130 of the CGST Act, 2017.
Change 3: No show-cause notice below Rs 10,000
The third direction sets a floor under tax litigation. The Council recommended amending Sections 73, 74 and 74A of the CGST Act to provide a minimum threshold of Rs 10,000 for the issuance of show-cause notices. The instruction directs that show-cause notices may not be issued where the amount involved is below Rs 10,000 — calculated as the sum of amounts under the CGST Act, the SGST or UTGST Act, the IGST Act, and cess levied under the GST (Compensation to States) Act, 2017.
Two points in that definition deserve attention. First, the Rs 10,000 is an aggregate: a notice is not saved from the floor by splitting the amount across CGST, SGST, IGST and cess heads, and conversely a taxpayer cannot escape the floor by pointing to one small head — the heads are added together. Second, the direction covers all three demand sections: Section 73 (demands other than fraud), Section 74 (demands involving fraud, wilful misstatement or suppression) and Section 74A (the newer general demand provision). The floor is not limited to non-fraud cases. The stated purpose is to reduce low-value litigation and the compliance cost that comes with it.
Old position vs new position
Who is affected
Every GST-registered business is affected by the arrest direction and the notice floor. The arrest direction removes, for now, the sharpest coercive tool in a GST dispute. The notice floor removes the smallest demands from the litigation pipeline altogether: if the aggregate amount in a proposed notice is below Rs 10,000, the notice should not be issued at all.
Transporters, drivers and businesses moving goods are the direct beneficiaries of the e-way bill rules. A vehicle carrying goods across States should no longer be stopped and held in a State where neither the supplier nor the recipient is based, on the basis of a routine check. The practical benefit depends entirely on the papers travelling with the goods — the no-documents exception means an e-way bill and origin or destination documents are now the price of that protection.
Tax advisers and consultants need to update their advice at once. Any client note that still warns of arrest as a live GST risk, or that treats a sub-Rs 10,000 notice as a routine possibility, is out of date as of 30 October 2026. Equally, any note that describes Section 69 as already deleted overstates the position: the Act is unchanged, and the instruction is interim.
CGST officers are the instruction's direct addressees. Principal Chief Commissioners and Chief Commissioners are expressly requested to monitor implementation, and any difficulty in implementation is to be brought to the notice of the Board. A copy of the instruction has also been sent to the Additional Secretary of the GST Council Secretariat, with a request to circulate it to State GST formations, which may — if deemed appropriate — issue similar instructions in their jurisdictions to ensure uniformity. That last point is a gap to watch: the instruction binds CGST formations directly, and State formations follow only if they issue their own similar instructions. Whether a given State has done so is NOT CHECKED here and should be confirmed before advising a client in a State-GST matter.
What to do next
Step 1 — If you face an arrest threat in a GST matter, cite this instruction. Ask the officer to explain how the proposed arrest sits with Instruction No. 02/2026-GST, which directs that no further arrests be carried out under GST. Put the exchange in writing and take advice immediately — the instruction is a direction to officers, not a court order, and how it plays out in an individual case may still need to be argued.
Step 2 — If you receive a show-cause notice, add up the amount first. Total the CGST, SGST or UTGST, IGST and Compensation Cess figures in the notice. If the aggregate is below Rs 10,000, the instruction says the notice should not have been issued — raise Instruction No. 02/2026-GST in your reply. Do not ignore the notice: reply and rely on the instruction, rather than assuming it will simply go away.
Step 3 — If your goods move by road, never let a vehicle travel without papers. Make sure every consignment carries a generated e-way bill and a document showing the origin or destination of the goods. Those two documents are what keep the new transit protections alive: without either, an intercepting officer may inspect, detain or seize irrespective of jurisdiction.
Step 4 — If a vehicle is stopped, ask for the authorisation. The interception must rest on specific intelligence authorised by an officer not below Joint Commissioner, with reasons recorded in writing. Ask what the authorisation is, and record the officer's answer. If neither your supplier nor your recipient is based in the intercepting officer's State, the vehicle should be allowed to pass unhindered while the information is forwarded to the jurisdictional officer.
Step 5 — Diary 1 April 2027. That is the date from which the GST Council recommended the amended provisions come into force. The interim instruction lasts until the CGST Act amendments come into force, so the endgame is legislation, not this instruction. Watch for the amendment Bill: if it omits Section 69 and writes the e-way bill limits and the Rs 10,000 floor into the Act, the relief becomes permanent law; if the Bill changes, the relief could change with it.
⚠️ Trap to avoid: do not treat this instruction as if GST enforcement has gone away. Tax demands above Rs 10,000 continue, detention and seizure remain possible within the new rules, and the Act itself still contains Section 69 until Parliament acts. The relief is real but interim, and it binds CGST formations directly — State GST action depends on each State issuing its own similar instruction, which is not yet confirmed.
What is NOT covered
This instruction does not amend the CGST Act, 2017 or any State GST Act — only Parliament and the State legislatures can do that, and the Council has recommended 1 April 2027 for the amended provisions. It does not change GST rates, registration, input tax credit, refunds or return filing. It does not set out what happens to arrests or proceedings already underway before 30 October 2026 — that question is NOT CHECKED here. It does not itself change prosecution thresholds or any other 57th Council recommendation beyond the three items it lists; other Council reforms are outside this instruction. And it does not guarantee that every State GST formation will follow suit — the instruction asks the GST Council Secretariat to circulate it to the States, which may issue similar instructions if they deem it appropriate.
Frequently asked questions
Is GST arrest now illegal?
Not in the sense that Section 69 has been deleted — it has not; the Act is unchanged until amended. But CBIC has directed all its field formations that no further arrests may be carried out under GST, as an interim measure until the recommended amendments come into force. For practical purposes, CGST officers should not be arresting anyone under GST right now.
Does the no-arrest direction apply to State GST officers too?
The instruction is addressed to CGST formations. A copy was sent to the GST Council Secretariat with a request to circulate it to State GST formations, which may issue similar instructions if they deem it appropriate. Whether your State has issued its own instruction is NOT CHECKED here — confirm it before relying on the direction in a State-GST matter.
Can my truck still be stopped in a State it is only passing through?
Only in limited cases. If neither the supplier nor the recipient is based in that State, the vehicle must be allowed to pass unhindered while the information is forwarded to the jurisdictional officer — unless no e-way bill was generated and no origin or destination document is produced, in which case the officer may inspect, detain or seize regardless of jurisdiction.
How is the Rs 10,000 notice threshold calculated?
By adding together the amounts under the CGST Act, the SGST or UTGST Act, the IGST Act, and Compensation Cess. If that aggregate is below Rs 10,000, a show-cause notice under Section 73, 74 or 74A should not be issued.
Until when does this instruction last?
Until the amendments to the CGST Act recommended at the GST Council's 57th meeting come into force. The Council recommended that the amended provisions come into force from 1 April 2027.
Does this mean small tax demands are written off?
No. The instruction stops the issue of a show-cause notice below Rs 10,000; it does not waive any tax that is otherwise payable, and it does not stop notices at or above Rs 10,000. It is a litigation floor, not an amnesty.
Sources
Primary source: CBIC Instruction No. 02/2026-GST dated 30 October 2026 (File No. CBIC-20001/3/2026-GST), "Implementing certain recommendations of the GST Council in its 57th meeting held on 08.10.26 at New Delhi, prior to the legislative amendments" — official CBIC Tax Information Portal: https://taxinformation.cbic.gov.in/view-pdf/1000592/ENG/Instructions. Background cited in the instruction: recommendations of the GST Council in its 57th meeting held on 8 October 2026 at New Delhi, including omission of Section 69 and rationalisation of Sections 68, 129 and 130 and a minimum threshold under Sections 73, 74 and 74A of the CGST Act, 2017, with amended provisions recommended from 1 April 2027. News pointer only (not a source for any fact in this article): The Indian Express, "CBIC mandates immediate scrapping of GST arrests ahead of legal amendments" — https://indianexpress.com/article/business/economy/cbic-mandates-immediate-scrapping-of-gst-arrests-ahead-of-legal-amendments-10944003/.
