KAR SATHI · VISUAL GUIDE
Understand the 57th GST Council’s proposed ₹10,000 notice threshold, Section 125 penalty reduction, non-fraud relief and new safeguards for e-way bill.
01 · FROM THE GUIDE
GST Notice and Penalty Changes 2026: ₹10,000 Threshold, Section 125 and E-Way Bill Relief
02 · FROM THE GUIDE
A GST dispute does not always involve crores of rupees. Many businesses spend considerable time responding to notices involving relatively small tax differences, procedural mistakes or minor compliance issues.
The 57th GST Council Meeting held on 8 October 2026 recommended several reforms aimed at reducing this burden. These include a ₹10,000 minimum threshold for specified GST.
03 · FROM THE GUIDE
Particular | Recommended Change
Small GST Notices | Minimum tax threshold of ₹10,000
04 · FROM THE GUIDE
One of the most practical recommendations concerns small-value GST disputes.
The Council recommended amendments to Sections 73, 74 and 74A so that a show-cause notice would generally not be issued where the total tax amount involved is less than.
05 · FROM THE GUIDE
CGST
SGST or UTGST
06 · FROM THE GUIDE
Suppose a business has a proposed GST difference of ₹7,500.
Under the recommended framework, a show-cause notice under the specified provisions would generally not be issued solely for that tax amount.
07 · FROM THE GUIDE
Section 125 of the CGST Act deals with a general penalty where a person contravenes GST provisions but no separate penalty is specifically provided for that contravention.
The current maximum general penalty is ₹25,000.
08 · FROM THE GUIDE
The Council has also recommended relief where a taxpayer pays the determined tax and interest within the prescribed period after an adjudication order.
Under the proposed changes, a 5% penalty would apply in specified non-fraud cases where payment is made:
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