GST Council: It’s roles, Powers, Functions, Members, Quorum

GST Council: According to Article 279A of the Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016.

GST Council is the main decision-making body that has been formed to finalize the design of GST. This governing body of GST comprises of Union Finance Minister – Arun Jaitley, who is the Chairman of the council, the Minister of State (Revenue) and the State Finance/ Taxation Ministers. The duty of the Council is to make recommendations to the Union and the States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services.

GOODS AND SERVICES TAX COUNCIL (GSTC):

In the GST Council a decision is taken by a three-fourth majority with the Centre having a one-third vote and the states the remaining two-third.

The GSTC has been notified with effect from 12th September, 2016. GSTC is being assisted by a Secretariat. Twenty meetings of the GSTC have been held so far. The following major decisions have been taken by the GSTC:

Functions of the GST Council seeked to include making recommendations on:

  • taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed in the GST;
  • goods and services which may be subjected to or exempted from GST;
  • Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;
  • threshold limit of turnover below which goods and services may be exempted from GST;
  • rates including floor rates with bands of GST;
  • special rates to raise additional resources during any natural calamity;
  • special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
  • any other matters

Members of GST Council:

The GST Council is a joint forum of the Centre and the States, and consists of the following members:

  1. Chairperson- Union Finance Minister
  2. Vice chairperson- to be chosen from amongst the members of Ministers of State government
  3. Members-
    • (a) The Union Minister of State, in-charge of Revenue/Finance
    • (b) The Minister In-charge of finance or taxation or any other Minister nominated by each State Government

Power of GST council only recommendatory in nature:

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like

  • a) The goods and services that may be subjected or exempted from GST.
  • b) Principles that govern Place of Supply.
  • c) Threshold limits.
  • d) GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters or RNR
  • e) Special provisions for certain States, etc.
  • f) Transition Provisions

Quorum for GST Council Meetings

  • The quorum of GST council is 50% of total members
  • Decision is taken by 3/4th majority (75%), wherein-
    • (a) the Central Government would have the weightage of 1/3rd of the total vote cast, and
    • (b) the State Governments would have a weightage of 2/3rd of the total votes cast

Functions of the GST Council

GST Council is basically entrusted with task to make recommendations on the different aspects of GST to the Union as well as states.

GST Council under the Constitution is required to make recommendations on the following:

  • (a) the taxes, cesses and surcharges which may be subsumed in the goods and services tax;
  • (b) the goods and services that may be subjected to, or exempted from the goods and services tax;
  • (c) model GST Laws, principles of levy, apportionment of IGST and the principles that govern the place of supply;
  • (d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
  • (e) GST rates including floor rates;
  • (f) any special rates for a specified period, to raise additional resources during any natural calamity or disaster;
  • (g) 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
  • (h) any other matter relating to the GST, as the Council may decide.

The GST Council shall also recommend the date on which GST will be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.

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