GST Arrests Stopped, E-Way Bill Checks Narrowed and a ₹10,000 Notice Floor: CBIC Instruction 02/2026

The short answer

On 30 October 2026 the Central Board of Indirect Taxes and Customs (CBIC) issued Instruction No. 02/2026-GST. It tells central GST officers to apply three recommendations of the 57th GST Council meeting now, before Parliament amends the CGST Act:

• No further arrests under GST.
• Vehicles carrying goods are to be stopped only on specific intelligence, authorised in writing by a Joint Commissioner or higher officer, and only within the officer's own State in most cases.
• No show cause notice where the total amount involved is below ₹10,000.

The Instruction stays in force until the amendments to the CGST Act recommended by the Council come into force. It binds central tax officers. State GST officers, including Maharashtra's, follow it only if their State issues a similar instruction.

Why an instruction, and not a change in the law

The GST Council met on 8 October 2026 and recommended, among more than forty measures, three changes that need amendments to the CGST Act, 2017 and to each State's GST Act: omitting the arrest provision in section 69, rationalising the e-way bill inspection and verification provisions in sections 68, 129 and 130, and adding a minimum threshold for show cause notices to sections 73, 74 and 74A.

The Instruction records that the Council recommended these amendments take effect from 1 April 2027. As an interim measure of trade facilitation, the Central Government decided that CBIC's field formations should implement the reforms straight away, until the amendments in the Act take effect.

In practical terms, the statute still reads as it did. What has changed is how central officers are directed to use it.

1. Arrests: none under GST

Paragraph 3.1 of the Instruction is one line: all CGST field formations are directed that no further arrests may be carried out under GST. The Council's recommendation is to withdraw arrest powers altogether by omitting section 69 of the CGST Act.

The Instruction deals with arrest. It does not touch the offences in section 132, prosecution, or the department's power to recover tax, interest and penalty through adjudication. Those continue as before.

2. E-way bill checks: intelligence first, and mostly within the officer's own State

Paragraph 3.2 sets out six directions for vehicles in transit:

1. Interception only on specific intelligence. It must be 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 moved in breach of the CGST Act or Rules.
2. Inspection only within jurisdiction. The intercepting officer may inspect the vehicle and goods only if the supplier or recipient is registered, or located (if unregistered), in that officer's own State or Union territory. If a breach is found, the goods may be detained or seized under section 129.
3. Goods passing through another State move on. If neither the supplier nor the recipient is in the officer's State and the officer suspects a breach, the officer must let the vehicle and goods pass unhindered and send the information to the officer with jurisdiction over the supplier or recipient.
4. The exception: no e-way bill and no papers. Where no e-way bill has been generated and no document showing the origin or destination of the goods is produced, the goods or vehicle can be inspected, detained or seized regardless of where the supplier or recipient is.
5. No other ground. Goods and vehicles in transit are not to be detained or seized for any reason other than those above.
6. No confiscation in transit. Goods or vehicles in transit are not to be confiscated under section 130.

3. No show cause notice below ₹10,000

Under paragraph 3.3, a show cause notice under section 73, 74 or 74A may not be issued where the amount involved is below ₹10,000. The amount is the total of the amounts under the CGST, SGST, IGST and UTGST Acts and the compensation cess, so ₹4,000 of CGST and ₹4,000 of SGST count as ₹8,000.

The stated aim is to cut low-value litigation and the cost of contesting it.

Who it binds: the Centre–State point

The Instruction is addressed to the Principal Chief Commissioners, Chief Commissioners and Directors General of Central Tax. A copy went to the GST Council Secretariat, asking it to circulate the Instruction to the State GST formations, which may, if deemed appropriate, issue similar instructions within their jurisdictions.

For a Pune business, that matters. Many GST registrations in Maharashtra are administered by the State GST department, not CBIC. Check which administration your GSTIN is assigned to (it appears on the registration certificate and the portal dashboard). Until Maharashtra issues a corresponding instruction, this one governs central officers only.

What does not change yet

• The text of sections 69, 68, 129, 130, 73, 74 and 74A is unchanged until Parliament and the State legislatures amend it.
• Tax, interest and penalty that are actually payable remain payable. The ₹10,000 floor is a threshold for issuing a notice, not a waiver of tax.
• Prosecution under section 132 is not addressed by this Instruction. The Council's separate recommendation on prosecution needs its own amendment.

What to do now

• Transporters and suppliers moving goods: keep the e-way bill and the invoice or delivery challan with every consignment. The one case where the jurisdiction limit does not apply is when neither is produced.
• If a vehicle is stopped: note the officer's name, designation and office, and ask whether the interception was authorised in writing by a Joint Commissioner or higher officer, as the Instruction requires.
• If you receive a notice for a small amount: add up the CGST, SGST, IGST and cess involved. If a central officer has issued a notice for less than ₹10,000 after 30 October 2026, point to paragraph 3.3 in your reply.

For the wider set of 57th-meeting changes, see our overview of the 57th GST Council recommendations. For how demands, adjudication and appeals are now to be handled, see our guide to CBIC Circulars 258 and 259 of 2026.

Source: CBIC Instruction No. 02/2026-GST, File No. CBIC-20001/3/2026-GST, dated 30 October 2026, read from the copy on CBIC's Tax Information Portal. This article explains the Instruction; it is not legal advice on a particular case.