Goods and Services Tax Council

The Goods and Services Tax Council was established by the President of India. It oversees the implementation and regulation of GST in India. It is a collaborative platform between the Centre and the states, designed to make important decisions about GST such as determining the tax rates, exempted items, and special provisions for certain states. Decisions are made through a voting system, with a majority of three-fourths needed, and voting weightage shared between the central government and the state governments. In this article, you will know about meaning and definition of Goods and Services Tax Council, its composition and function. To explore more interesting UPSC Economy topics like Goods and Services Tax Council, check out other articles and IAS Notes of IASToppers.   

Table of Content

• What is Goods and Services Tax Council?
• History of Goods and Services Tax Council
• Structure of Goods and Services Tax Council
• What is the Function of Goods and Services Tax Council?
• How decisions are made in Goods and Services Tax Council?
• Conclusion
• FAQs on Goods and Services Tax Council

What is Goods and Services Tax Council?

• Goods and Services Tax (GST) is governed by the Goods and Services Tax Council.
• Goods and Services Tax Council is a constitutional body that was constituted by the President as per Article 279A (1) of the amended Constitution.
• Goods and Services Tax Council is a joint forum of the Centre and the states.
• Goods and Services Tax Council is headquartered at New Delhi.

History of Goods and Services Tax Council

• The establishment of the Goods and Services Tax Council in India began with the President’s approval of the Constitution (122^nd Amendment) Bill 2016 on September 8, 2016.
• This bill set the stage for the introduction of the Goods and Services Tax (GST).
• According to Article 279A (1) of the Constitution, the President had a 60-day timeframe to give the green light for the formation of the Goods and Services Tax Council.
• Upon the passing of the GST Bill, the Union Cabinet gave its approval for the formation of the Goods and Services Tax Council and its Secretariat in 2016.
• 1^st Goods and Services Tax Council meeting took place on the 22^nd and 23^rd of September 2016.
• Arun Jaitley was the first chairman of the Goods and Services Tax (GST) Council.

Structure of Goods and Services Tax Council

Below is the composition of Goods and Services Tax Council:

• Goods and Services Tax Council is chaired by the Union Finance Minister.

Other members of Goods and Services Tax Council are:

• Union Minister of State, in charge of Revenue of Finance.
• Minister in charge of finance or taxation or any other
• Minister nominated by each State government

In the Union Cabinet meeting held in 2016, it was also decided to appoint:

• The Secretary (Revenue) as the Ex-officio Secretary.
• The Chairperson, Central Board of Excise and Custom (CBEC), as a permanent invitee (non-voting) to all proceedings of the Council.
• One post of Additional Secretary to the Council in the Secretariat (at the level of Additional Secretary to the Government of India).
• Four posts of Commissioner in the GST Secretariat (at the level of Joint Secretary to the Government of India).

What is the Function of Goods and Services Tax Council?

As per Article 279 (4), Goods and Services Tax Council has to make recommendations to Union and states on important issues related to GST such as:

• Goods and services that may be subjected or exempted from GST
• Model GST Laws
• Principles that govern Place of Supply
• Principles of levy
• Apportionment of IGST
• Threshold limits of turnover for the function of GST
• GST rates including the floor rates with bands, and Special rates for raising additional resources during natural calamities/disasters
• Special provisions with respect to 8 north-eastern states, Himachal Pradesh, Jammu and Kashmir, and Uttarakhand; and other associated matters
• GST laws, and principles associated with place of supply
• Other matters pertaining to the implementation and regulation of GST in India

How decisions are made in Goods and Services Tax Council?

• The Constitution’s 101^st Amendment Act of 2016 dictates the voting regulations of the Goods and Services Tax Council.
• In case of a voting, every decision of the Goods and Services Tax Council has to be taken by a majority of not less than three-fourths of the weighted votes of the members present.
• The central government’s vote has a one-third weightage in the total votes. In contrast, all state governments combined hold a two-thirds weightage in the total votes of any meeting.

Conclusion

The Goods and Services Tax Council, a joint forum of the Centre and the states, has been a cornerstone in India’s fiscal landscape since its inception in 2016. Functioning as a recommending body for pivotal matters relating to GST, it ensures the smooth implementation and regulation of GST across India. As a way forward, the Indian government should continue to leverage the collective wisdom of this Council, focusing on enhancing the role of Goods and Services Tax Council by focusing on its transparency and adaptability of its decision-making processes. This could ultimately yield a more efficient and fair GST system, driving sustained economic growth across the nation.

Ref: Source-1

FAQs (Frequently Asked Questions)