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46 Goods and Services Tax Council
The 101st Amendment Act of 2016 paved the way for the introduction of a new tax regime (i.e. goods and services tax - GST) in the country. The smooth and efficient administration of this tax requires co-operation and coordination between the centre and the states. In order to facilitate this consultation process, the amendment provided for the establishment of a Goods and Services Tax Council or the GST Council.
The amendment inserted a new Article 279-A in the Constitution. This Article empowered the President to constitute a GST Council by an order1. Accordingly, the President issued the order in 2016 and constituted the Council2 .
The Secretariat of the Council is located at New Delhi. The Union Revenue Secretary3 acts as the ex-officio Secretary to the Council.
While discharging its functions, the Council is to be guided by the need for a harmonised structure of GST and the development of a harmonised national market for goods and services. Further, the Council has to determine the procedure in the performance of its functions.
The vision and mission of the Council are as follows:
Vision: To establish the highest standards of co-operative federation in the functioning of the Council, which is the first constitutional federal body vested with powers to take all major decisions relating to GST.
Mission: Evolving by a process of wider consultation, a GST structure, which is information technology driven and user friendly.
The Council is a joint forum of the centre and the states and consists of the following members:
(a) The Union Finance Minister as the Chairperson
(b) The Union Minister of State in-charge of Revenue or Finance
(c) The Minister in-charge of Finance or Taxation or any other Minister nominated by each state government
The members of the Council from the states have to choose one amongst themselves to be the Vice-Chairperson of the Council. They can also decide his term.
The Union Cabinet also decided to include the Chairperson of the Central Board of Excise and Customs (CBEC) as a permanent invitee (non-voting) to all proceedings of the Council.
The decisions of the Council are taken at its meetings. One-half of the total number of members of the Council is the quorum for conducting a meeting. Every decision of the Council is to be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting at the meeting. The decision is taken in accordance with the following principles:
(i) The vote of the central government shall have a weightage one-third of the total votes cast in that meeting.
(ii) The votes of all the state governments combined shall have weightage of two-thirds of the total votes cast in that meeting.
Any act or proceedings of the Council will not become invalid on the following grounds:
(i) any vacancy or defect in the constitution of the Council; or
(ii) any defect in the appointment of a person as a member of the Council; or
(iii) any procedural irregularity of the Council not affecting the merits of the case.
The Council is required to make recommendations to the centre and the states on the following matters:
(a) The taxes, cesses and surcharges levied by the centre, the states and the local bodies that would get merged in GST.
(b) The goods and services that may be subjected to GST or exempted from GST.
(c) Model GST Laws, principles of levy, apportionment of GST levied on supplies in the course of inter-state trade or commerce and the principles that govern the place of supply.
(d) The threshold limit of turnover below which goods and services may be exempted from GST.
(e) The rates including floor rates with bands of GST.
(f) Any special rate or 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 Kashmir4 , Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
(h) Any other matter relating to GST, as the Council may decide.
In addition to the above, the Council has the following other functions:
1. The Council shall recommend the date on which the GST may be levied on petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel.
2. When there is a dispute with respect to its recommendations or their implementation, the Council shall establish a mechanism to adjudicate upon the dispute:
(a) between the centre and one or more states; or
(b) between the centre and any state or states on one side and one or more other states on the other side; or
(c) between two or more states.
1. Article 279-A(1) says that the President shall, within sixty days from the commencement of the Constitution (One Hundred and First Amendment) Act, 2016, by order, constitute a Council to be called the Goods and Services Tax Council.
2. The Presidential order was issued on 15 September 2016.
3. Department of Revenue, the Ministry of Finance, Government of India.
4. The Jammu and Kashmir Reorganisation Act, 2019, bifurcated the erstwhile state of Jammu and Kashmir into two separate Union territories, namely, the Union territory of Jammu and Kashmir and the Union territory of Ladakh.
5. The Goods and Services Tax (Compensation to States) Act, 2017.