GST Council: Benefits, Structure, Function & Working Process

The GST (Goods and Services Tax) Council is a regulatory body established by the government of India, and it plays an important role in regulating, modifying and reconciling the GST system in the country. Let us delve deeper into the meaning of the GST Council, its features and benefits, its functioning and more.

GST council – its meaning explained

The Goods and Services Tax Council are an important regulatory body in India that streamlines the GST structure. It supersedes all the previous complex tax systems and introduces a simple tax system for the general consumers. In addition, the GST council is responsible for overseeing the entire taxation process and helping the relevant departments prevent fraudulent activities.

GST Council – its structure

If you want to explain the GST Council to anyone, you must first have a good understanding of its structure. The GST council structure is determined by Article 279 (1) of the Constitution of India (amended constitution). This article states that the GST council must be constituted by the first citizen of India, i.e., the President of India, within 60 days from the inception of Article 279A.

The article also states that the GST council must be a joint forum between the Central and State governments. It must consist of the following members.

• The Union Finance Minister of India would be the chairperson of the council.
• The council must also have the Union Minister of State as one of its key members. The minister would be in charge of the Revenue of Finance.
• The GST council must have members nominated from every state of India. The members must have a minister in charge of finance, taxation, or any other minister.
• Additionally, the GST council must include an ex-officio secretary and a permanent invitee from the Central Board of Excise and Customs.

A quorum for GST Council meeting

Like all other statutory body meetings, whenever a GST council meeting is held, it must meet certain quorum requirements, which include:

• At least 50% of the total number of GST members must be present for the meeting for it to be called a valid meeting
• All the decisions taken in the GST council meeting must be backed by at least 75% majority of the votes cast by the council members
• The vote of the central government would have a weightage of 1/3^rd of the total votes cast, and the votes of the members of the state government would have a weightage of 2/3 of the total votes cast
• The decisions taken during the GST council meeting would not be deemed invalid if there have been the following deficiencies, such as vacancy remained in the council, there was a defect in appointing a member of the council, there was non-compliance with the procedure

GST Council – understanding its powers

The constitution of India empowers the GST council, and it has significant authority to regulate and shape the country’s Goods and Services Tax regime. The GST council’s powers extend across different key areas, including:

• Tax rates and exemptions

  The members of the GST council can recommend that GST rates be levied on different goods and services. Also, the body can provide recommendations on exemption limits for taxation of certain goods and services or reductions in tax rates wherever necessary.

  
  

  Also Read: GST on MRP – Meaning, Rules & Calculation

  
  

• Threshold limit

  The Goods and Services Tax Council has an important role in all decisions relating to GST in India. It has the power to determine the turnover threshold for the business to register for GST. Thus, it plays a vital role in ensuring that there is uniformity and complete clarity in the GST registration requirements and regulations.

  
  

• Laws and principles

  The GST council has the power to formulate and revise the GST laws. Thus, it plays a critical role in guiding the application of tax principles, levy mechanisms, and compliance requirements.

  
  

• Decision making

  Since the GST council has representation from both the central and the state governments, the council collectively makes decisions on all critical matters relating to GST, including fostering consensus and cooperation among its members and other stakeholders.

  
  

  Through these powers, the GST Council shapes the trajectory of India’s GST system. It maintains a perfect balance between the needs of the consumers, business owners and the country’s economy.

  
  

• Dispute solving

  Amongst the many powers vested in the hands of the GST council is dispute solving. The council, as a resolution body, addresses the conflicts between the state and the centre regarding GST matters.

  
  

• Special provisions for specific states

  while the GST council regulates goods and services tax-related matters all over India, it also has the power to make special provisions for certain states and provide recommendations for the North Eastern states and the hilly regions to address their unique needs.

  
  

GST country – knowing its benefits

• One of the most important benefits of the GST council is that it streamlines the tax system in India and eliminates the multiple and complicated taxation process.
• The GST council introduces new taxation methods to better understand the citizens of India.
• It monitors all tax-related transactions and prevents all fraudulent practices.
• Another significant benefit of the GST council is that it ensures a smooth taxation process for all the stakeholders.

Conclusion

The GST council serves as a critical regulatory and decision-making body in the Indian taxation landscape, striving to streamline the GST system for the benefit of all the taxpayers as well as the economy. The Goods and Services Tax Council’s proactive approach to addressing the challenges faced by individuals and business entities is a reflection of the government’s efforts to foster a transparent and efficient tax system in the country.