Thursday, August 5, 2021

The Big Role of GST Council in Developing GST in India

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The GST and the GST council was birthed into existence after the infamous BJP government decided it would save the economy in a manner. But how did it actually start?

Goods and Services Tax revolves around the concept of a single tax and is not relatively new. Proposed in the year 1999, GST was accepted by the then Prime Minister of India, Mr. Atal Bihari Vajpayee, which constituted a committee to design a GST model. The head of the committee formed was then Finance Minister Mr. Asim Dasgupta, under the rule of the Vajpayee Government.

Back then, the model was not completely designed, and the acting Finance Minister, Mr. P Chidambaram, continued working on it in February 2006. The final GST model was implemented on 1st July 2017 by the Finance Minister, Mr. Arun Jaitley. And since then, GST replaced all other forms of indirect taxes. A destination-based tax was implemented, and the Government of India established a committee known as the GST Council. All the rules governing the GST Act are given by the GST council.

Creation of the GST Council

GST Council creation was facilitated by the 122nd Amendment Bill 2016, which was approved by the President of India on 8th September 2016. After the notification for enforcing Article 279A was issued on 10th September 2016, a Union Cabinet meeting was set up, and the establishment of the GST Council was approved along with the establishment of the GST Council’s Secretariat. Finance Minister, Mr. Arun Jaitley, also convened the first meeting of the Council on 26th and 27th September 2016.

What is the need for a GST Council?

GST rules and guidelines are governed by members of the GST Council. It is tasked with the duties and responsibilities to make important decisions and changes in GST. Also, the council is authorized to determine the rate of tax applicable under the GST model, tax exemption rules, the due date of filing returns, submitting new registration forms, tax-related laws, and any special exemptions for certain zones. You can search GST number by company name on their GST portal as well. Ensuring one uniform rate of GST, the main objective of this council is to develop a harmonized national market of goods and services.

Understanding the Structure of the GST Council Committee

Implemented through Section 279 under Article 1 of the Indian constitution. As per the article rules, the GST Council should be constituted by the President of India within 60 days of the inception of Article 279A. GST council members are part of the joint forum of the Central and State Government and consists of :

  • Union Finance Minister of India, Smt Nirmala Sitharaman. She is currently serving as the chairperson of the GST Council.
  • The Union Minister of the State would be a member of the GST Council. He/she would be in charge of the revenues of the financial system.
  • Each minister is elected as a member of the GST Council by their respective state governments. The minister of finance or taxation is nominated for the post.

What are the Features of GST Council?

The GST Council is a federal forum with central and state governments in India on board. And so it has the following features:

  • The office of the GST Council is located in New Delhi, India.
  • A representative from the Central Board of Excise and Customs (CBEC) is a chairperson and a permanent non-voting invitee for all meetings of the GST council.
  • The Revenue Secretary of India is the ex-officio secretary to the GST Council.
  • Four positions of the commissioner are elected at the level of Joint Secretary during meetings of the GST Council.
  • Additional secretary to the GST Council is created, and this post is equivalent to the level of the Additional Secretary to the Indian Government.
  • The GST Council Secretariat consists of officers on deputation basis as appointed from the Central and State Governments.

What are the Functions of the GST Council?

As per Article 279A, the functions of GST Council are listed below:

  • All the taxes, cesses, and surcharges are eradicated under GST.
  • All the laws governing the GST model are taken by the GST Council.
  • The threshold limit is decided by the GST Council for the application of GST.
  • Any special exemptions or Special provisions concerning north-east states, Himachal Pradesh, Jammu and Kashmir, and Uttarakhand are taken by GST Council
  • Also, the GST Council provides special rates for raising additional resources during natural disasters, calamities.

The Quorum of GST Meetings and Decision Making

Whenever a GST council meeting is held, some rules must be complied with. It is expressed that the total majority of 50% should  be present in GST council meetings. Each decision made should hold 75% majority among the members of the GST Council. For clarification purposes, the weighted votes cast by the Central and State governments members are laid down in Article 279A with the following rules:

  • The votes of the Central government should have the proportional weight of ⅓ rd of the total votes cast.
  • The votes of the State government members should weigh ⅔ rd of the total votes cast.

Any type of act or decision taken in the GST Council meeting would not be considered invalid if there have been the following deficiencies when the GST Council was established:

  • A vacancy remained in the council.
  • If the formation of the GST Council has a defect
  • There was a defect in appointing any member of the council    
  • In cases of non-compliance with a procedure.     

Dispute Handling by the GST Council

GST Council committee is set up to resolve conflicts and maintain harmony between the board members. It is their duty to create a mechanism to address disputes and settle with an agreement with both parties. Disputes that occur between the central and state government within a particular state are resolved by the GST Council. If any dispute is raised due to recommendations made by the GST Council, then in such cases GST Council takes the responsibility of addressing the issue. Any dispute between central and one or more state governments is also resolved by the GST Council.

FAQs About the GST Council

Q – Until date, how many GST Council meetings have happened?

Till date, 34 GST council meetings have taken place.

Q –  Who is the Chairperson in the meetings of the GST Council?

The Union Finance Minister, Smt Nirmala Sitharaman, chairs the meetings of the GST Council.

Q – What is the mandatory attendance criterion for a valid GST Council meet?

For a successful GST Council meeting to be considered valid, at least 50% of the members should be present at the meeting.

Q- Explain the role of the Secretariat of the GST Council.

The GST Council Secretariat is the governing body that operates the GST council. It consists of members who are deputed officers of central and state governments.

Q- Which government takes the cost of managing the GST Council Secretariat?

All the costs are borne by the Central government. The union cabinet allocates a certain amount of funds for carrying out operations of the GST council.

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