GST Council
GST Council
- A constitutional body – GST was added in the constitution under Article 279A by 101st Constitutional Amendment Act in 2016 and came into effect in 2017.
- Article 279A (1) – The GST Council has to be constituted by the President within 60 days of the commencement of Article 279A.
- GST Council – It will be a joint forum of the Centre and the States, shall consist of the following members
- Chairperson – Union Finance Minister
- Member – The Union Minister of State, in-charge of Revenue of finance
- Other members – The Minister In-charge of finance or taxation or any other Minister nominated by each State Government
- GST Council Meetings – It takes decisions through a consensus-based approach.
- The Constitution did not mention the number of GST Council meetings per year.
- However, the Council meets periodically to discuss and decide on important issues related to GST.
- Quorum – The Constitution states that one-third of the total number of GST Council members shall constitute the quorum.
- Voting structure – Every decision of the GST Council shall be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting.
- It shall have a weightage of
- One-third of the total votes cast to the Centre
- Two-thirds of the total votes cast to the States
- This inclusive weightage helps in promoting the spirit of the co-operative federalism.
Role of GST Council
- Role – It oversees the implementation and regulation of the Goods and Services Tax.
- It will make recommendations to the Union and the States on important issues related to GST like
- The goods and services that may be subjected or exempted from GST
- Model GST Laws
- The principles that govern Place of Supply
- Threshold limits
- GST rates including the floor rates with bands
- Special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.
- Recommendations are not binding – In Mohit Minerals case of 2022, Supreme Court stated that States and Centre can equally legislate on matters of GST thereby all recommendations of GST council is not binding on State legislature.
- The court said Article 246A of the Constitution gives both Parliament and state legislatures “simultaneous” power to legislate on GST and recommendations of the Council “are the product of a collaborative dialogue involving the Union and States.”
Article 246A treats State and Centre as equal. Article 279 says state and centre cannot act independent of each other.
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