GST Council | Goods and Services Tax (GST) - B Com PDF Download

What is the Goods and Services Tax Council?

The Goods and Services Tax (GST) Council is a constitutional body established to oversee the implementation and administration of GST in India. This council was formed following the passage of the Constitutional (122nd Amendment) Bill by the Parliament and over 15 state legislatures, with the Hon’ble President giving assent on September 8, 2016. The GST Council is tasked with making recommendations to the Union and State governments on various GST-related issues.

Objectives of the GST Council

The objectives of the GST Council are to:

• Ensure the smooth implementation of GST and regulate the goods and services tax regime in India.
• Harmonize tax laws across states to simplify the tax structure, eliminate cascading taxes, and reduce compliance costs.
• Monitor all taxation processes to prevent fraudulent activities.

What are the Constitutional provisions pertaining to the GST Council?

GST Council

• Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.

Composition of the GST Council

• Article 279A(2): The Goods and Services Tax Council shall consist of the following members:
  

Vice-Chairperson

• Article 279A(3): The Members of the Goods and Services Tax Council shall choose one member amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide. 

Functions

Article 279A(4): The Goods and Services Tax Council shall make recommendations to the Union and the States on

• The taxes, cesses, and surcharges levied by the Union, the States, and the local bodies which may be subsumed in the goods and services tax.
• The goods and services that may be subjected to, or exempted from, the goods and services tax.
• Model Goods and Services Tax Laws, principles of levy, apportionment 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.
• The threshold limit of turnover below which goods and services may be exempted from goods and services tax.
• The rates include floor rates with bands of goods and services tax. 
• Any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster.
• 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 goods and services tax, as the Council may decide. 

Article 279A(5): The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high-speed diesel, motor spirit (commonly known as petrol), natural gas, and aviation turbine fuel. 

Article 279A(8): The Goods and Services Tax Council shall determine the procedure for performing its functions.

Article 279A(11): The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute arising out of the recommendations of the Council or implementation thereof between: 

• the Government of India and one or more States
• the Government of India and any State or States on one side and one or more other States on the other side
• two or more States  

Functioning of GST Council

Article 279A(7): One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. 

Article 279A(9): Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely:

• the vote of the Central Government shall have a weightage of one-third of the total votes cast. 
• the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast in that meeting.

Other Provisions

Article 279A(6): While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services.

Article 279A(10): 

• No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of.
• Any vacancy in, or any defect in, the constitution of the Council.
• Any defect in the appointment of a person as a Member of the Council.
• Any procedural irregularity of the Council not affecting the merits of the case. 

What are some of the significant outcomes of the GST Council?

The GST Council’s decisions significantly influence the tax burden on businesses and consumers, as well as the overall economic environment in India. Some major outcomes include:

• Implementation of a Dual GST Model: Both the Central and State Governments levy GST on the supply of goods and services under this model.
• Classification of Goods and Services into Tax Slabs: Goods and services are categorized into five tax slabs: 0%, 5%, 12%, 18%, and 28%. Some items are exempt from GST, while others incur additional cesses on top of the applicable GST rate.
• Comprehensive GST Compliance System: An online portal has been established for filing GST returns and making tax payments.
• Reduced Compliance Burden for Businesses: Businesses can avail of input tax credits for GST paid on purchases and benefit from the composition scheme for small businesses.

What are the outcomes of the 49th GST Council meeting?

• Clearing Pending GST Compensation: The Government of India has decided to clear the entire pending balance of GST compensation for June 2022.
• Approval of the GoM Report: The Council approved the Report of the Group of Ministers on Capacity-Based Taxation and a Special Composition Scheme in certain sectors, aimed at plugging leakages and improving revenue collection from commodities like pan masala, gutkha, and chewing tobacco.
• GST Rate Adjustments: The GST rate on Rab was reduced from 18% to nil or 5% if sold prepackaged and labelled, and on pencil sharpeners from 18% to 12%.
• Exemptions for Educational Institutions: Exemptions were granted to educational institutions and Central and State educational boards for conducting entrance examinations.
• Extended Dispensation for Government and Legislative Bodies: The dispensation regarding GST payment was extended to courts and tribunals for taxable services supplied by them.
• Extended Time Period for Filing Returns: The Council recommended increasing the time period for filing returns from 30 days to 60 days, extendable by another 60 days, subject to certain conditions, and introduced amnesty schemes with conditional waivers/reductions of late fees.
• Rationalizing Late Fees and Place of Supply Provisions: The Council recommended rationalizing the late fee for delayed filing of annual returns for FY 2022-23 and the provision of a place of supply for services related to the transportation of goods.