GST council is a governing body to regulates and directs every step for the implementation of goods and service tax in the nation with decisions over tax rates and further implementation measures. GST council assimilates suggestions and regulations into one form and improvises the changes formally through notifications and circulars with its departments and finance ministry.
A single common “Goods and Services Tax (GST)” was proposed and given a go-ahead in 1999 during a meeting between the Prime Minister Mr. Atal Bihari Vajpayee and his economic advisory panel. Mr. Vajpayee set up a committee headed by the then finance minister of West Bengal, Asim Dasgupta to design a GST model.
Establishment of the GST Council
The notification regarding the establishment of the GST Council was issued on Saturday the 10th day of September 2016 and the provisions came into force on Monday the 12th day of September 2016.
Article 279A having provisions regarding the establishment of the GST Council was inserted after Article 279 of THE CONSTITUTION (ONE HUNDRED AND FIRST AMENDMENT) ACT, 2016. The Union Finance Minister is the head of the GST Council while the First Meeting of the council was held on 22nd and 23rd September 2016 in New Delhi
GST Council Constitution
According to Article 279A, it is on the part of the president to give the order to constitute the council of GST within 60 days from the 12th of September 2016 which is already notified by the Government.
Following are the designated personnel, who will form the GST Council together:-
- The Union Finance Minister who will be the Chairman of the council;
- The Union Minister of State in charge of Revenue or Finance who will be a member of the council;
- One member from each state who is Minister in charge of Finance or Taxation or any other Minister and any one of them will be vice chairman of the GST Council who will be mutually elected by them.
GST Council recommendations
Article 279A (4) specifies that the Council will make recommendations to the Union and the states on the important issues related to GST, such as, the goods and services will be subject or exempted from the GST. Further, they lay down GST laws, principles that govern the following:
- Place of supply
- Threshold limits
- GST rates on goods and services
- Special rates for raising additional resources during a natural calamity or disaster
- Special GST rates for certain states
Quorum and Decision-Making
- For a valid meeting of the members of the GST Council, at least 50 per cent of the total number of members should be present at the meeting.
- Every Decision made during the meeting should be supported by at least 75 per cent majority of the weighted votes of the members who are present and voting at the meeting. In “article 279A” a principle is there which divides the total weighted vote cast between the Central Government and State Government:-
- The vote of the Central Government shall have the weight of one-third of the total votes
- The votes of the State Government shall have the weight of two-thirds of the total votes, cast in the meeting
- Any act, decision or proceedings shall not be declared invalid based on any remaining deficiency at the time of the establishment of the GST Council i.e.
- if there is any vacancy remaining in the Council
- if there is any defect in the constitution of the Council
- if there is any defect in the appointment of a person as a member of the Council
- if there is any procedural non-compliance.
Features of GST Council
- GST Council office is set up in New Delhi
- Revenue Secretary is appointed as the Ex-officio Secretary to the GST Council
- Central Board of Indirect Taxes and Customs (CBIC) is included as the chairperson as a permanent invitee (non-voting) to all GST Council proceedings
- Create a post for Additional Secretary to the GST Council
- Create four posts of commissioner in the GST Council Secretariat (This is at the level of Joint Secretary)
- GST Council Secretariat will have officers taken on deputation from both the Central and State Governments
Main Functions of the GST Council
- Principles of levy, model Goods and Services Tax Laws, the appointment of Goods and Services Tax levied on supplies in the course of Inter-State trade or commerce under article 269A, and the principles that govern the place of supply;
- For raising resources during any natural calamity or disaster, or any special rate or rates for a specified period, to raise additional.
- On subsuming various taxes, cess, and surcharges in GST.
- Details of services and goods that will be subjected to GST or which will be exempted from GST.
- On the Threshold limit below which, services and goods will be exempted from GST.
- On GST rates including floor rate with bands of GST and any special rate for the time being to arrange resources to face any natural calamity.
- Making special provisions for the following states: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
- On model law on GST, the Principal of levy of GST and the principles which will govern the Place of Supply.
FAQs
What is the GST Council?
The GST Council is a constitutional body established under Article 279A of the Indian Constitution. It is responsible for making recommendations to the Union and State governments on issues related to Goods and Services Tax (GST).
Who are the members of the GST Council?
The GST Council comprises the following members:
- The Union Finance Minister (Chairperson)
- The Union Minister of State in charge of Revenue or Finance
- The Finance Ministers of all the States