GST (Goods and Services Tax) Council: Provisions, Functions, and Meetings

Introduction

The GST (Goods and Services Tax) Council is a constitutional body in India responsible for making recommendations on issues related to GST, including tax rates, exemptions, and other related matters. It is chaired by the Union Finance Minister of India and comprises representatives from both the central and state governments. The council meets periodically to discuss and decide on various aspects of GST implementation. Its aim is to streamline taxation across the country and ensure uniformity in indirect taxation laws.

Key Provisions of the GST Council

• Formation of the GST Council: Article 279A  of the amended Constitution stipulates that the President must constitute the GST Council within 60 days of the commencement of Article 279A. 
• The notification to enforce Article 279A from September 12, 2016, was issued on September 10, 2016.
• • Appointment: By Presidential Order.
  • Composition: Finance Minister (Chairperson) + Union Ministers of State in charge of finance + Ministers in charge of finance or any other Minister nominated by each state government.
    • Members of the Council from the states have to choose one amongst themselves to be the Vice-Chairperson of the Council. They can also decide his term.
    • The Union Cabinet also decided to include the Chairperson of the Central Board of Indirect Taxes and Customs (CBlC) as a permanent invitee (non-voting) to all proceedings of the Council.
  • Quorum: 50% of total members.
  • Decision Making: Every decision by majority of 3/4th of members present & voting.
• Weightage of votes:
• Center: 1/3rd
• States: 2/3rd
• GST: 101st CAA 2016.
• Establishment and Structure of the GST Council and Secretariat: The Union Cabinet approved setting up of GST Council on 12th September, 2016 and also setting up its Secretariat as per the following details:
  • Creation of the GST Council as per Article 279A.
  • Creation of the GST Council Secretariat, with its office at New Delhi; 
  • Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council; 
  • Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council
  • Create one post of Additional Secretary to the GST Council in the GST Council Secretariat and four posts of Commissioner in the GST Council Secretariat (Joint Secretary level)

Functions of GST council

The Goods and Services Tax Council shall make recommendations to the Union and the States on

• Taxation Framework and Scope: The taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the GST.
• Goods and Services Classification: The goods and services that may be subjected to, or exempted from the GST;
• Legislative Guidelines: Model Goods and Services Tax Laws, principles of levy, apportionment of GST levied on supplies in the course of inter-State trade or commerce under article 269A and the principles that govern the place of supply;
• Thresholds and Rates: The threshold limit of turnover below which goods and services may be exempted from GST;
  • The rates including floor rates with bands of GST;
• Special Measures: Any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
• State-Specific Provisions: Special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
• Any other matter relating to the GST, as the Council may decide.

GST Council Meetings

• The GST Council, a constitutional body overseeing GST implementation in India, convenes periodically since its inaugural session in September 2016. 
• It addresses key GST issues like tax rates, exemptions, and administrative procedures. 
• Decisions are made via consensus, with a three-fourths majority vote, with one-third weightage for the Centre and two-thirds for States, fostering cooperative federalism.
• To date, the Council has convened 49 meetings, with its decisions exerting a notable influence on GST implementation across India( Feb 2023)
• Some important decisions taken in the GST Council meeting are:
• • Introduced a new e-way bill mechanism.
  • Roll out of e-invoicing system in GST
  • Reduced the effective rate from 12% to  5% on non-affordable and from 8% to 1% on affordable housing schemes applicable under construction properties.
  • Rationalization of duty on specified COVID related goods.
  • The Council in its 49th meeting has approved the creation of the National Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) in principle. 
    • The National Bench of the Appellate Tribunal shall be situated at New Delhi. 
    • GSTAT shall be presided over by its President and shall consist of one Technical Member from Centre and one Technical Member from  State.
  • Introduction of the dynamic QR code on invoice
  • Rate Rationalization: 226 Items under 28% GST slab reduced to 37 items till now.

Conclusion

• The GST Council plays a pivotal role in shaping the implementation of the Goods and Services Tax in India. 
• Through numerous meetings and decisions, it has demonstrated a commitment to fostering cooperative federalism and addressing key issues related to tax rates, exemptions, and administrative procedures. 

With its continued efforts, the GST Council remains central to the evolution and effectiveness of the GST regime, ensuring its alignment with the needs and aspirations of the Indian economy.