Tax Planning

What is GST Council and How It Works?

what is gst council

The GST Council is the body assembled by the government of India to make decisions related to GST. The GST Council holds its meetings a few times in a year and makes some important recommendations regarding GST. Therefore, every taxpayer should know the basic structure and function of the GST Council in India.

The following topics have been covered in this article:

  • What is the GST Council?
  • Features of the GST Council
  • Importance of the GST Council
  • Members of the GST Council
  • GST Council Recommendations

What is the GST Council?

The Goods and Services Tax Council is a decision making body of Constitution which aims at making various recommendations to the Union and the State Government. These decisions are made regarding various Goods and Services Tax (GST) related issues in India.

The GST Council is chaired by the Union Finance Minister. Other members of the GST Council include the Union State Minister of Revenue or Finance & Ministers in-charge of Finance or Taxation from each state in India.

The Constitution includes ofthe 122nd Amendment Bill, 2016, assigned to the introduction of GST in the country. This amendment was initially introduced in the Parliament, on 3rd August 2016. It was passed by the Rajya Sabha and the Lok Sabha on later dates in August 2016.

Consequent upon this, the Honorable President of India accorded assent on 8th of September, 2016 and the same was notified as the Constitution Act 2016.

As per Article 279A [1] of the amended Constitution, the GST Council has to be constituted by the President within the duration of 60 days from the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was actually issued on 10th September, 2016.

Features of the GST Council

The Council of GST meets to discuss and lay laws of GST that will benefit dealers from all over the nation. The outcome of the earlier and latest GST Council meetings was that the Council decided to implement GST provisions on electronic-way bills that are transporting goods worth more than Rs. 50,000 in value to be registered online before they can be moved. They have even extended the deadline to file GSTR-1.

The GST Council will even set up anti-profiteering screening committees that will make the National Anti-Profiteering Authority stronger under the GST Law. Other than laying laws of GST, the GST Council had taken decisions as such:

  • The threshold for some Special States has been set at Rs. 10 lakh per annum.
  • The threshold limit for exemption of GST has been set at Rs. 20 lakh per year for all States.
  • Ice cream, pan masala, tobacco, and other edible ice manufacturers shall not be eligible for composition levy.
  • For composition scheme is set at Rs. 75 lakh for all States (except for the North East States and Himachal Pradesh, which is set at Rs. 50 lakh per year).

Importance of the GST Council

The GST Council is the key decision-making body that will take all the vital decisions related to the GST. The GST Council dictates tax rate, tax exemption, tax laws, the due date of forms, and tax deadlines, keeping in mind special rates and provisions for few states. The predominant responsibility of the Council of GST is to make sure to have one uniform tax rate for goods and services across the nation.

Also Read: GST on Ocean Freight

Members of the GST Council

The Goods and Services Tax (GST) is governed by the GST Council. Article 279(1) of the amended Indian Constitution implies that the GST Council has to be constituted by the President within 60 days of the commencement of the Article 179A.

In accordance to the article, Council of GST will be in a joint form for the Centre along with the States. It includes of the following mentioned members:

  • The Union Finance Minister, Arun Jaitley as the Chairperson of the Council
  • As a member, the State Union Minister will be in charge of Finance Revenue.
  • The Minister in-charge of finance or taxation
  • Other Ministers who are nominated by each State Government, as members.

GST Council Recommendations

Article 279A (4) clearly specifies that the Council will make certain recommendations to the Union along with States on the vital issues which are related to GST. For example, certain goods and services have been exempted from paying the Goods and Services Tax. The Council of GST will be required to make the recommendations to the Union and the States on the following matters:

  • On subsuming of multiple taxes and surcharge in GST.
  • Every detail of services and goods which will be exempted from GST or that will be subjected to GST.
  • On limit of threshold below which goods and services will be exempted from GST.
  • Making some sort of special provisions for the following states: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Jammu and Kashmir, Sikkim, Tripura, Uttarakhand and Himachal Pradesh.
  • On GST model law, Principal of levy of GST and the principals which will govern the place of Supply.

GST Council even looks into drafting GST rules on payment, registration, valuation, input tax credit, composition, return, refund, invoice, and transitional provisions among other things.

About Ajeet Sharma

My Name is Ajeet Sharma Financial Blogger & Founder of Financegab.com. We are a personal finance blog dedicated to personal finance & financial planners. The main aim of this blog is to help people to informed financial decisions.
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