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Understanding the GST Council: Key Functions and Meeting Insights

In the domain of India's Goods and Services Tax (GST), the GST Council holds an integral place. Chaired by the Union Finance Minister, Nirmala Sitharaman, and composed of state finance ministers, this apex committee wields the power to amend, harmonize, or enact laws related to GST.

Recently, the 50th GST Council meeting convened on July 11, 2023, where key decisions were made. This council holds the reins on critical matters, from tax rates and exemptions to deadlines and legislation, all while accommodating the unique needs of various states. At its core, the GST Council's mission is to establish a uniform tax structure for goods and services nationwide. In this blog, we delve into the pivotal role of the GST Council in shaping India's tax landscape.


Who is the present Chairman of the GST council?


At this time, Nirmala Sitharaman, the Union Finance Minister, holds the position of the GST Council's chairperson.


Understanding what is GST council by Deciphering it’s functions:

  1. Taxation Principles and Laws: Formulating the fundamental principles of taxation, the structure of model Goods and Services Tax Laws, and the methodology of levying Goods and Services Tax on transactions in the context of Interstate trade or commerce as stipulated in article 269A. This includes determining the governing principles for the place of supply.

  2. Resource Mobilization in Special Situations: Addressing scenarios of natural calamities or disasters by proposing resource-raising measures, including the possibility of special rate adjustments for a defined period to mobilize additional funds.

  3. Varied Taxation Matters: Tackling diverse matters as decided by the Council, pertaining to the realm of goods and services taxation.

  4. GST Incorporation and Structure: Envisioning the integration of various taxes, cess, and surcharges into the comprehensive framework of GST.

  5. Taxable and Exempted Categories: Defining the exhaustive list of services and goods subjected to GST, alongside those granted exemption from the tax.

  6. Threshold Limit and Exemptions: Setting the threshold limit under which specific services and goods are exempted from the purview of GST.

  7. GST Rate Dynamics: Establishing GST rates, including both the base rate and permissible bands, along with any temporary special rates that might be necessitated to effectively manage situations arising from natural calamities.

  8. Focused State Provisions: Crafting tailored provisions for select states, namely Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.

  9. Blueprint for GST Law and Principles: Developing a comprehensive model law for GST, encompassing the foundational principles of levy and the principles governing the determination of the Place of Supply.


With a total of 33 members, the GST Council members’ assembly includes two members from the central government and 31 members representing 28 states and three union territories empowered with legislative jurisdiction.


Apprehending 47th GST Council meeting


The 47th GST Council convened in Chandigarh over two days, from June 28th to 29th, 2022.

Guided by the leadership of Smt. Nirmala Sitharaman, the Council's proceedings welcomed distinguished participants, including the Minister of State for Finance and several state ministers. Among them, Shri Pankaj Chaudhary, representing the state Ministry of Finance, played an active role. This session held remarkable importance as it marked a substantial gathering after an extended hiatus, delving into a spectrum of crucial discussions.


The agenda encompassed a diverse range of topics, from amendments to Form GSTR-3B and recalibrations of tax rates to exemptions' withdrawal, resolution of inversion-related intricacies, and strategic maneuvers within the realm of information technology.


Key highlights of the 49th GST Council meeting


  1. Establishment of GST Appellate Tribunal:

  • Council's approval for a national tribunal with state benches for dispute resolution.

  • Aims to address rising GST disputes burdening High Courts and judicial forums.

  • Enabling legislative provisions for the Tribunal to be included in this year's Finance Bill.

  • Tribunal structure to include a principal bench in New Delhi and multiple benches in states.

  • Each bench is composed of two technical and two judicial members, ensuring equal representation.

  • Clearance of Rs 16,982 crore balance for June 2022 compensation dues.

  • Finalization of Rs 16,524 crore GST compensation for Delhi, Karnataka, Odisha, Puducherry, Tamil Nadu, and Telangana.

  • Approval of lower penalties for businesses with up to Rs 20 crore turnover for delayed annual returns filing.

  • Introduction of Amnesty Scheme to provide conditional waivers or late fee reductions for non-filers.

  • Adjustment of GST rates for specific items such as pencil sharpeners and liquid jaggery (rab).

  • Extension of GST exemption to educational institutions conducting entrance exams.

  • Transition of compensation cess on pan masala and gutkha to specific tax-based levy from ad valorem basis.

  • Mandate for exports against letters of undertaking assuring GST compliance.

48th GST Council meeting


Conducted virtually from New Delhi, the 48th meeting of the GST Council took place on December 17, 2022, a Saturday. Leading the proceedings was Smt. Nirmala Sitharaman, the Union Finance Minister, alongside the Finance Ministers representing the states and Union Territories.

GST Council article: Article 279A of the Constitution authorizes the President to establish a collaborative platform of both the Central and State governments known as the Goods & Services Tax Council (GST Council).


The GST Council stands as a collaborative platform that unifies the center and the states, composed of the subsequent dignitaries:

  1. Leadership at the Helm: The role of the Chairperson is entrusted to the Union Finance Minister, symbolizing the apex position within the Council's structure.

  2. Revenue and Finance Representatives: Ensuring representation from the central government, the Union Minister of State responsible for Revenue or Finance plays a pivotal role in the Council's discourse.

  3. State-Level Delegation: States contribute their insights through their respective Minister in charge of Finance or Taxation, or any nominated Minister as designated by the state government.

  4. Intra-State Leadership: Within the state delegation, a Vice-Chairperson is selected by the members, adding a layer of leadership and management. The term for this role is also determined by the states.

  5. Enduring Presence: Acknowledging the significance of expertise, the Chairperson of the Central Board of Excise and Customs (CBEC) is accorded the status of a permanent invitee to all Council proceedings, contributing insight even though without a voting role.


FAQs:


Q) What is the primary purpose of the Goods & Services Tax (GST) Council?

The main objective of the Goods & Services Tax (GST) Council is to facilitate collaborative decision-making between the Central and State governments on matters related to GST implementation.


Q) Who presided over the 50th GST Council meeting held on July 11, 2023, and who were the participants?


The 50th GST Council meeting held on July 11, 2023, was chaired by Finance Minister Smt. Nirmala Sitharaman. The meeting was attended by Finance Ministers from various states and Union Territories, as well as senior officials from the Ministry of Finance.


Q) What were the key topics discussed during the 47th GST Council meeting in June 2022?


The agenda of the 47th GST Council meeting in June 2022 encompassed discussions on amendments to Form GSTR-3B, revisions in tax rates, removal of exemptions, addressing inversion-related issues, and measures concerning information technology.


Q) How does the GST Council handle disputes arising from the GST regime, and what were some decisions made during a particular meeting?


The GST Council resolves disputes through the establishment of a national tribunal system with state benches. Additionally, during specific meetings, the Council might finalize outstanding compensation payments, approve reduced penalties for delayed filings, modify tax rates, and introduce strategies to prevent tax evasion.


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