Goods and Services Tax Council

• Established through the 101st Amendment Act of 2016, which inserted Article 279-A in the Constitution.
• Empowered the President to constitute a GST Council via order in 2016.
• Secretariat located in New Delhi; Union Revenue Secretary acts as ex-officio Secretary.

Vision and Mission:

• Vision: To establish high standards of co-operative federation in the functioning of the Council.
• Mission: To evolve a technology-driven and user-friendly GST structure through wide consultation.

Composition:

• Joint forum of the Centre and the States.
  • Union Finance Minister as the Chairperson.
  • Union Minister of State in-charge of Revenue or Finance.
  • Minister in-charge of Finance or Taxation or any other Minister nominated by each state government.
• State members choose a Vice-Chairperson from amongst themselves.
• Chairperson of the Central Board of Indirect Taxes and Customs (CBIC) is a permanent invitee (non-voting).

Working:

• Decisions are taken at meetings.

• Quorum: One-half of the total number of members.

• Decisions require a majority of not less than three-fourths of the weighted votes.

  • Central Government: one-third weightage.
  • State Governments combined: two-thirds weightage.

• Acts or proceedings are not invalid due to:

  • Vacancy or defect in the constitution.
  • Defect in the appointment of a member.
  • Procedural irregularity not affecting the merits of the case.

Functions:

• Makes recommendations to the Centre and States on:
  • Taxes, cesses, and surcharges levied by the Centre, States, and local bodies to be merged in GST.
  • Goods and services that may be subjected to or exempted from GST.
  • Model GST Laws, principles of levy, apportionment of GST levied on supplies in the course of inter-state trade or commerce, and principles that govern the place of supply.
  • Threshold limit of turnover for GST exemption.
  • GST rates, including floor rates with bands.
  • Special rates for a specified period during natural calamities or disasters.
  • Special provisions for Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.
  • Any other matter relating to GST.

Other Functions:

• Recommends the date of GST levy on:
  • Petroleum crude
  • High-speed diesel
  • Motor spirit (petrol)
  • Natural gas
  • Aviation turbine fuel
• Establishes a mechanism to adjudicate disputes related to recommendations or implementation:
  • Between the Centre and one or more states
  • Between the Centre and any state/states on one side and one or more other states on the other side
  • Between two or more states
• Recommends compensation to states for revenue loss due to GST introduction for five years.
  • Parliament determines the compensation based on the recommendation.
  • The Parliament enacted the law in 2017 - The Goods and Services Tax (Compensation to States) Act, 2017.