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When GST Council Constituted: Roles and Features

The implementation of GST was a historical reform in the Tax System of India. After the Goods and Service Tax Act got passed in the Indian Parliament, a GST Council was also formed to manage the GST implementation and collection in a smooth manner and bring the whole nation under a uniform tax structure. But most of us don’t know when the GST Council constituted? In this article, we will discuss how and when the GST council constituted and the various features and functions of the council.

The role of GST Council in the Indian Tax System


What is GST?


GST stands for Goods and Services Tax. It is a value-added tax that replaced many indirect taxes in India such as excise duty, VAT, services tax, etc. The Goods and Service Tax Act finally got passed in the Indian Parliament on 29th March 2017 after years of debate and postponement and came into effect on 1st July 2017.


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When GST Council Constituted?


In order to implement GST in India, the Constitutional Amendment Bill (CAB) was first introduced by the central government in the Parliament and first passed by Rajya Sabha on 03rd August 2016 followed by Lok Sabha on 08th August 2016. The CAB was passed by more than 15 states and thereafter President of India gave assent to the Constitution Amendment Act, 2016 on the 8th of September, 2016. Since then, all issues related to GST in the country had been notified and governed by the GST council bringing into existence the Constitutional body. This is how and when GST Council was constituted.


On September 16, 2016, the GOI (Government of India) issued notifications bringing into effect all the sections of CAB for the final implementation of GST in India. The notification defined an outer time limit of 1 year, till 15th of September, 2017 for bringing into effect the Goods and Service Tax Bill.


It is tasked with the duty to form important decisions and changes in GST. The GST Council is authorized to work out the speed of tax applicable under the GST model, tax exemption rules, the maturity of submitting GST forms, tax-related laws and deadlines, and special exemptions for a few States of India


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Need of a GST Council


As there were so many taxes levied on goods and services, therefore the Indian tax system was one of the most complicated tax systems in the world. Since it was not feasible to continue with this old system, so the country needed a uniform tax system for all goods and services across the nation for easy & effective implementation and tax collectionThe time was appropriate to introduce a uniform tax system which was GST and when GST council constituted


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GST Council


As per Article 279A (1), the GST Council has to be constituted by the President of India within 60 days of the formation of Article 279A. The notification for bringing into force Article 279A of the constitution to bring the entire nation under a unified tax system with effect from 12th September 2016 got issued on 10th September 2016.


The Article 279A of the amended Constitution clearly suggested that the GST Council, which is a joint forum of the Central and the States governments of India shall consist of the following members: –


a) Union or central Finance Minister as the Chairperson

b) The Union Minister of State whosoever is in charge of Revenue or finance – Member of GST Council

c) The Finance Minister-in-charge of taxation or a different minister appointed by different State Governments to be members of the GST council


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As per Article 279A (4), the GST Council can give recommendations to the Union and the State governments on various important issues related to GST implementation, such as all the different goods and services from the different sectors that could be included or exempted from the GST basket, all the model GST Laws, all rules and laws that govern Place of Supply, threshold limits, GST rates including the floor rates, special rates for raising additional essential resources which are required during natural calamities or disasters and special provisions for certain States, etc.


The GST Council is a government body that means to unite states and the center on a typical stage for the cross-country rollout of the highly awaited tax reform. It’s anything but a zenith part board of trustees to change, accommodate, or secure any law or guideline dependent on the setting of labor and products charge in India.


The GST Council directs charge rate, charge exception, the due date of structures, charge laws, and duty cut-off times, remembering extraordinary rates and arrangements for certain states. The dominating duty of the GST Council is to guarantee to have one uniform expense rate for labor and products all over India.


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Features Of GST Council


The Union Cabinet under the Chairmanship of the Prime Minister of India approved the formation of the GST Council on 12th September 2016 and also setting up its Secretariat as per the following guidelines:


(a) Formation of the GST Council as per Article 279A of the amended Constitution;

(b) Formation of the GST Council Secretariat, with its headquarters at New Delhi;

(c) Appointment of the Secretary (Revenue) as the Secretary to the GST Council;

(d) Appointment of the Chairperson of the Central Board of Excise and Customs (CBEC), as a permanent non-voting member to attend all proceedings of the GST Council;

(e) Additional Secretary post to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the GOI), and also total four different posts of Commissioners in the GST Council Secretariat to match or at least at the level of Joint Secretary to the Government of India. The Union Cabinet is also granted to arrange sufficient funds for meeting all the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be managed by the Central Government of India. The GST Council Secretariat will be governed by various officers taken on deputation from both the Central and State Governments.


Quorum of GST meetings and decision making


Whenever a GST Council meeting is planned, the accompanying standards should be consented to –


1.Minimum half of the complete number of GST individuals should be available at each GST Council meeting to be pronounced as a substantial gathering.


2.Every choice that is taken in GST Council gatherings ought to have at least a 75% larger part of the weighted votes cast by the individuals from the committee. The individuals ought to be available in the gathering and ought to likewise cast a ballot. For a clear understanding of the weighted votes cast by the Central Government and individuals representing different State Governments, Article 279A sets out the accompanying principles –


3.The vote of the Central Government would have the weightage of 1/3rd of all the votes cast.


4. The votes of the individuals from the State Government would have the weightage of 2/3rd of the votes cast.


5.Any act, the decision is taken or procedures of the GST Council meeting would not be viewed as invalid if there have been the accompanying insufficiencies when the GST Council was set up –


6.Any type of act, the decision is taken or proceedings of the GST Council meeting would not be considered invalid if there have been the following deficiencies when the GST Council was established –


  • A vacant position remained in the council
  • Any type of defect or irregularities in the constitution of the council
  • If proper protocols and fair means are not followed in appointing an individual as a member of the council
  • In case of non-adherence of a procedure


 Dispute settlement by the GST Council


 The GST Council is additionally entitled with the duty to create a balanced mechanism with which the below-mentioned disputes would be settled –


  • Disputes between the Centre and the State Government of a State
  • The disputes between the Central Government and at least one or more States on one side and other States on the other side.
  • Disputes between two or more States happened because of any recommendation of the GST Council or due to the implementation of the recommendation of the council.


How the Goods and Services Tax Council function?


The GST Council needs to make certain recommendations to the center and the states on the following matters:


  1. The different taxes, cesses, and surcharges levied by the center, the states, and the local bodies would be converged in GST.
  2. The goods and services that may be subjected to GST or excluded from GST.
  3. Model GST Laws, principles of levy, determination of GST levied on supplies in the case of inter-state trade or commerce, and the laws that govern the place of supply.
  4. The threshold limit of turnover below which goods and services may be excluded from GST.
  5. The rates incorporate floor rates with different bands of GST.
  6. Any special or uncommon rate or rates for a predetermined period to raise additional resources during any natural catastrophe or disaster.
  7. The special provision concerning the provinces of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.
  8. Any other matter relating to GST, as the Council may choose to address.


In addition, the GST Council can also suggest the date on which the GST may be levied on petroleum crude, diesel, petrol, natural gas, and aviation turbine fuel. The Council additionally needs to recommend the compensation package to the states for the loss of revenue arising because of the introduction of GST for a period of five years. In light of the proposal, the Parliament will determine the compensation.


GST Council Meetings 


Another significant obligation of the GST Council is to meet and examine the GST rules and laws, which would be helpful for vendors. Since the time the GST Council has been framed, different gatherings have occurred. In the last GST Council meeting, the chamber concluded that GST ought to be carried out on e-way charges, which require merchandise esteeming more than INR 50,000 being enlisted before they are moved. The GST Council likewise expanded the cut-off time of documenting the GSTR –


Hostile to exploitative screening advisory groups were additionally set up in the most recent gathering of the GST Council. The point of setting up these boards was to reinforce the National Anti-Profiteering Authority under the laws of GST. Other than planning laws on GST, the GST Council likewise took choices on the accompanying viewpoints –


For the Indian States, with the exception of the unique class States, as far as possible for exclusion of GST would be set at INR 40 lakhs. In the event of exceptional class States, as far as possible for exclusion of GST is set at INR 10 lakhs.


If there should be an occurrence of organization conspires, as far as possible for GST exception is set at INR 1.5 cr for the Indian States. Notwithstanding, for the North Eastern States and for Himachal Pradesh, the edge furthest reaches of GST exclusion is set at INR 50 lakhs.


Merchandise like tobacco, dish masala, frozen yogurt, and different kinds of eatable ice makers would not be qualified to benefit structure demand. In any case, in the event of café administrations, the organization toll would be permitted on these products and assembling exercises.


Essentially, in the 34th GST Council meeting, a portion of the choices taken by the board incorporated the accompanying –


The GST rate on non-moderate houses was brought down 5%. For reasonable houses, the GST rate was brought down to 1%. This brought down GST rate would be pertinent on under-development properties. Realty home designers can pick a more established GST pace of 12% on non-reasonable houses. If there should be an occurrence of moderate houses, the GST pace of 8% can be picked till May 10, 2019


On the off chance that the old GST rate is picked by any manufacturer, the developer would not have the option to guarantee an input tax break. Other than these two obligations, the GST Council likewise makes rules with respect to GST enrollment, valuation, installment of GST, input tax break, GST return, arrangement, temporary arrangements, receipt and guaranteeing discount, and so forth.

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