Indirect Tax Laws and Practice · Inspection, Search, Seizure, Arrest and Prosecution

Arrest and Bail under GST: Section 69 Explained

Updated 11 October 2026 · Fact-checked

Under Section 69 of the CGST Act, the Commissioner can order an officer to arrest a person who he has reason to believe committed certain Section 132 offences punishable by imprisonment. Most GST offences are non-cognizable and bailable. Only the offences in Section 132(5), where tax exceeds ₹500 lakh, are cognizable and non-bailable.

Understand Arrest and Bail under GST

Arrest under GST is not a routine power. An officer cannot arrest on his own. The Commissioner must first have reasons to believe that the person committed a specified offence, and must then authorise an officer of central tax by order.

The offences that can lead to arrest are those in clauses (a), (b), (c) and (d) of Section 132(1), and only when punishable under clause (i) or (ii) of Section 132(1) or under Section 132(2). In plain words: supplying without invoice to evade tax, issuing invoices without supply, availing ITC on such invoices or without any invoice, and collecting tax but not paying it beyond three months. The tax amount must also be large. Clause (i) covers amounts above ₹500 lakh. Clause (ii) covers amounts above ₹200 lakh up to ₹500 lakh. Section 132(2) covers a repeat conviction.

Next, understand cognizable and non-cognizable. In a cognizable offence, the officer can arrest without a warrant. Under GST, Section 132(4) says all offences are non-cognizable and bailable, except those in Section 132(5). Section 132(5) makes the offences in clauses (a) to (d) of Section 132(1), when punishable under clause (i) (tax above ₹500 lakh), cognizable and non-bailable.

So there are two tiers. If the amount is above ₹200 lakh up to ₹500 lakh, arrest is possible under Section 69, but the offence is non-cognizable and bailable. If the offence is in clauses (a) to (d) and the amount exceeds ₹500 lakh, it is cognizable and non-bailable.

Procedure follows. For a Section 132(5) offence, the arresting officer must inform the person of the grounds of arrest and produce him before a Magistrate within twenty-four hours. For other arrests, the person is admitted to bail, or, if he does not furnish bail, forwarded to the Magistrate's custody, subject to the Code of Criminal Procedure, 1973. For a non-cognizable and bailable offence, a Deputy Commissioner or Assistant Commissioner has the powers of an officer-in-charge of a police station for releasing the person on bail or otherwise. Prosecution itself needs the previous sanction of the Commissioner under Section 132(6).

Key rules to remember

Who can order arrest: Commissioner, by order, authorises an officer of central tax (Section 69(1)); Requires reasons to believe that the person committed an offence in clause (a), (b), (c) or (d) of Section 132(1), punishable under clause (i) or (ii) of Section 132(1) or Section 132(2).
Arrestable tax limit: Tax evaded / ITC wrongly availed or utilised / refund wrongly taken > ₹200 lakh; Above ₹500 lakh: clause (i), up to 5 years and fine. Above ₹200 lakh up to ₹500 lakh: clause (ii), up to 3 years and fine. Repeat conviction: up to 5 years and fine.
General rule on cognizance and bail: All offences: non-cognizable and bailable, except Section 132(5); Stated in Section 132(4).
Cognizable and non-bailable offences: Clauses (a), (b), (c), (d) of Section 132(1) + punishable under clause (i) (> ₹500 lakh); Section 132(5). All three conditions must be met.
Production before Magistrate: Arrest for Section 132(5) offence: inform grounds + produce before Magistrate within 24 hours; Section 69(2).
Bail for other arrests: Section 132(4) offence: admitted to bail, or in default forwarded to Magistrate's custody; Section 69(3)(a), subject to the Code of Criminal Procedure, 1973. Under Section 69(3)(b), a Deputy or Assistant Commissioner has police-station-officer powers for release on bail in non-cognizable and bailable cases.
Sanction for prosecution: Previous sanction of the Commissioner; Section 132(6).

How to solve Arrest and Bail under GST questions

Use this sequence for any question asking whether a person can be arrested or is entitled to bail.

1Identify the offence and match it to a clause of Section 132(1). Is it clause (a), (b), (c) or (d)? Clauses (e), (f), (h), (i) and (l) do not trigger arrest under Section 69(1).
2Find the amount of tax evaded, ITC wrongly availed or utilised, or refund wrongly taken. Remember that it includes State, Union Territory and IGST amounts and cess.
3Place the amount in a band: above ₹500 lakh (clause (i)), above ₹200 lakh up to ₹500 lakh (clause (ii)), or lower. At ₹200 lakh or below, Section 69(1) arrest does not apply, unless it is a repeat conviction under Section 132(2).
4Check Section 132(5): clause (a) to (d) offence plus clause (i) band means cognizable and non-bailable. Otherwise the offence is non-cognizable and bailable under Section 132(4).
5Confirm the authority: arrest needs the Commissioner's order authorising an officer.
6State the procedure: for Section 132(5) offences, give grounds and produce before a Magistrate within 24 hours; for others, bail or custody of the Magistrate under Section 69(3).
7Conclude with a clear answer: can the person be arrested, and is he entitled to bail as of right.

Quickest way: Three-gate test for arrest and bail

When to use it: Use for MCQs and short case scenarios where you must decide quickly if arrest is allowed and if the offence is bailable.

Gate 1: Is the offence in clauses (a) to (d)? If no, no arrest under Section 69(1).
Gate 2: Is the amount above ₹200 lakh? If no, no arrest (except a repeat conviction).
Gate 3: Is the amount above ₹500 lakh? If yes, cognizable and non-bailable. If it is between ₹200 lakh and ₹500 lakh, arrest is possible but the offence is non-cognizable and bailable.

Common mistakes in Arrest and Bail under GST

Saying all GST offences are cognizable and non-bailable.
Students remember the strict ₹500 lakh rule and apply it everywhere.
Fix: Learn the default first: Section 132(4) says non-cognizable and bailable. Section 132(5) is the narrow exception.
Treating the ₹500 lakh limit as applying to every clause of Section 132(1).
The limit is memorised without the clause condition.
Fix: Cognizable and non-bailable needs clause (a), (b), (c) or (d) and punishment under clause (i). A clause (e) or (f) offence never qualifies.
Using ₹200 lakh or ₹500 lakh as 'at least' limits.
Careless reading of 'exceeds'.
Fix: The text says 'exceeds'. Tax of exactly ₹500 lakh falls in the clause (ii) band, not clause (i). Tax of exactly ₹200 lakh falls below the arrest bands.
Saying any officer can arrest on suspicion.
Confusing GST with police powers.
Fix: Section 69(1) needs the Commissioner's order authorising an officer of central tax, based on reasons to believe.
Forgetting the 24-hour production rule.
Students focus on the tax limits and skip the procedure.
Fix: For a Section 132(5) offence the officer must inform the grounds and produce the person before a Magistrate within twenty-four hours.
Counting only CGST while computing the limit.
The question names only central tax.
Fix: The Explanation to Section 132 includes State, UT and Integrated GST and cess in 'tax'. Add them all.

Worked examples

Example 1

Vikram Traders, Pune, issued invoices of ₹9 crore without any actual supply and passed on ITC of ₹1,62,00,000 (CGST, SGST and IGST together). The Commissioner has reason to believe the offence was committed. Can Vikram be arrested, and is the offence bailable?

Show the solution

Offence: issuing invoices without supply leading to wrongful ITC or refund falls under clause (b) of Section 132(1).
Amount: ₹1,62,00,000 equals ₹162 lakh.
Band: ₹162 lakh does not exceed ₹200 lakh, so the offence is not punishable under clause (i) or (ii). Clause (iii) covers amounts above ₹100 lakh up to ₹200 lakh, but Section 69(1) does not authorise arrest for clause (iii).
So, on these facts, the Commissioner cannot authorise arrest under Section 69(1) (there is no repeat conviction).

Answer: No. At ₹162 lakh the offence falls under clause (iii), which is outside Section 69(1) arrest power. It is also non-cognizable and bailable under Section 132(4).

Example 2

Ananya Enterprises collected GST of ₹3,40,00,000 from customers and did not pay it to the Government for over three months after the due date. The Commissioner has reasons to believe it. Can arrest be ordered? State the nature of the offence and the procedure.

Show the solution

Offence: collecting tax but not paying beyond three months from due date is clause (d) of Section 132(1).
Amount: ₹3,40,00,000 equals ₹340 lakh. It exceeds ₹200 lakh but not ₹500 lakh, so it is punishable under clause (ii): up to 3 years and fine.
Section 69(1) applies: clause (d) offence punishable under clause (ii). The Commissioner may authorise an officer of central tax to arrest.
Nature: Section 132(5) needs clause (i) (above ₹500 lakh). That is not met, so the offence is non-cognizable and bailable under Section 132(4).
Procedure: Section 69(3)(a) applies. The person is admitted to bail, or in default forwarded to the custody of the Magistrate. A Deputy or Assistant Commissioner has police-station-officer powers for release on bail.

Answer: Yes, arrest can be ordered by the Commissioner. The offence is non-cognizable and bailable, so the person should be released on bail, or in default of bail forwarded to the Magistrate's custody.

Exam tips

In MCQs, the traps are 'exceeds' and the clause letters. Check both before choosing the option.
In case scenarios, add up CGST, SGST, IGST and cess before testing the limits.
When asked 'cognizable or not', first state Section 132(4), then the exception in Section 132(5). This earns the marks for the rule and its application.
Write the 24-hour Magistrate rule whenever your answer involves a Section 132(5) arrest.
Link arrest with the Commissioner's sanction for prosecution under Section 132(6) in descriptive answers.

Practice questions from Inspection, Search, Seizure, Arrest and Prosecution

Arrest and Bail under GST: frequently asked questions

When can a person be arrested under GST?

Only when the Commissioner has reasons to believe the person committed a clause (a), (b), (c) or (d) offence under Section 132(1), punishable under clause (i) or (ii) or Section 132(2). The Commissioner must authorise an officer of central tax by order. In practice the tax amount must exceed ₹200 lakh, or there must be a repeat conviction.

Is every GST offence non-bailable above ₹500 lakh?

No. Only clause (a), (b), (c) or (d) offences punishable under clause (i) are cognizable and non-bailable under Section 132(5). Other offences, even if large, remain non-cognizable and bailable under Section 132(4).

What is the difference between cognizable and non-cognizable offences under GST?

In a cognizable offence, the officer can arrest without a warrant. Under GST, most offences are non-cognizable and bailable. The cognizable and non-bailable category is limited to Section 132(5).

Within what time must an arrested person be produced before a Magistrate?

For an offence under Section 132(5), Section 69(2) requires the officer to inform the person of the grounds of arrest and produce him before a Magistrate within twenty-four hours.