The GST Council is the backbone of India's taxation system, playing a pivotal role in governing the Goods and Services Tax (GST). Comprising central and state government representatives, it sets tax rates, resolves disputes, and ensures the uniform application of GST laws, driving the nation's economic growth through a streamlined tax process.
What is the GST Council?
All decisions regarding GST and related issues in India are made by the GST Council, a constitutional body. GST, a cumulative tax for government business, was enacted after the 101st Constitutional Amendment Act was passed in 2016.
Structure of the GST Council
The GST Council consists of the following members:
- The Finance Minister of the Government of India, who serves as the Chairperson.
- The Minister of State in charge of Union Revenue or Finance.
- The Minister in charge of Finance, Taxation, or any other Minister appointed by each state as a council member.
Since state representatives are involved, one member is elected as the Vice-Chairperson of the Council.
Functions of the GST Council
The GST Council makes recommendations to the Union and States on key GST-related issues, such as:
- Goods and services that can be taxed or exempted under GST.
- Model GST laws, principles of levy, distribution of Integrated Goods and Services Tax, and rules related to the Place of Supply.
- Standard GST rates, including tiered rates, with provisions for higher rates in cases of natural calamities or disasters.
- Special provisions for select states.
Power Shifting, Negotiation, and Decision-Making in the GST Council
The GST Council operates like a federal council and makes decisions by a simple majority, requiring at least three-fourths of the weighted votes of the members present. The central government's votes account for one-third of the total, while all state governments combined hold two-thirds of the voting power.
So far, the GST Council has periodically met to resolve key issues related to GST implementation in India. Some major actions include introducing the e-way bill system, rolling out the e-invoice system, and reducing GST rates on electric vehicles, among others.
The GST Council currently consists of 33 members, which include:
- Union Finance Minister: Nirmala Sitharaman (Chairperson)
- Union Minister of State in charge of Revenue or Finance: (Member)
- Ministers in charge of Finance or Taxation from each State Government: 31 members from the 28 states and 3 Union Territories that have passed GST legislation.
| GST Council Member Name | Designation | State/Centre |
|---|---|---|
| Smt. Nirmala Sitharaman | Finance Minister of India | Central |
| Shri Pankaj Chaudhary | Union Minister of State (Finance) | Central |
| Shri Buggana Rajendranath | Finance Minister | Andhra Pradesh |
| Shri Chowna Mein | Deputy Chief Minister | Arunachal Pradesh |
| Smt. Ajanta Neog | Minister, Finance & Women and Child Development | Assam |
| Shree Vijay Kumar Chaudhary | Finance Minister and Commercial Taxes Minister | Bihar |
| Shri T.S Singh Deo | Minister for Commercial Tax | Chhattisgarh |
| Shri Kailash Gahlot | Cabinet Minister | Delhi |
| Shri Mauvin Godinho | Minister for Transport and Panchayat Raj, Housing, Protocol and Legislative Affairs | Goa |
| Shri Kanubhai Desai | Minister of Finance | Gujarat |
| Shri Dushyant Chautala | Deputy Chief Minister | Haryana |
| Shri Jai Ram Thakur | Chief Minister | Himachal Pradesh |
| Shri Rajeev Rai Bhatnagar | Advisor to Lieutenant Governor | Jammu & Kashmir |
| Dr. Rameshwar Oraon | Minister for Planning cum Finance, Commercial Taxes and Food, Public Distribution and Consumer Affairs | Jharkhand |
| Shri Krishna Byre Gowda | Minister for Revenue Department | Karnataka |
| Shri K N Balagopal | Finance Minister | Kerala |
| Shri Jagdish Devda | Finance Minister | Madhya Pradesh |
| Shri Ajit Pawar | Deputy Chief Minister | Maharashtra |
| Dr. Sapam Ranjan Singh | Minister For Medical, Health & Family Welfare Department and Publicity & Information Department | Manipur |
| Shri Abu Taher Mondal | Cabinet Minister, Community & Rural Development, Power Department, Taxation Department | Meghalaya |
| Shri Lalchamliana | Minister of Home, Taxation etc. | Mizoram |
| Shri K.G Kenye | Minister for Power and Parliament Affairs | Nagaland |
| Shri Bikram Keshari Arukha | Minister of Finance | Odisha |
| Shri K. Lakshminarayanan | Minister of Public Works Department | Puducherry |
| Shri Pramod Sawant | Chief Minister | Goa |
| Shri Raghubar Das | Former Chief Minister | Jharkhand |
| Shri N. Biren Singh | Chief Minister | Manipur |
| Shri Neiphiu Rio | Chief Minister | Nagaland |
| Shri Prem Singh Chandumajra | Minister of Finance | Punjab |
| Shri Sukhjinder Singh Randhawa | Minister of Rural Development | Punjab |
| Shri Uddhav Thackeray | Former Chief Minister | Maharashtra |
| Smt. Mamata Banerjee | Chief Minister | West Bengal |
| Smt. J. Jayalalithaa | Former Chief Minister | Tamil Nadu |
| Shri Arvind Kejriwal | Chief Minister | Delhi |
The Council operates as a joint forum of the Centre and the States, making recommendations on various GST-related issues, including tax rates, exemptions, and model laws.
Major Functions of the GST Council
- Determining Tax Rates and Exemptions: The Council determines which products and services fall under the GST and which do not. This is crucial for mobilizing revenue for both the central and state governments.
- Formulating GST Laws and Regulations: The Council has the authority to frame laws and standard procedures that guide the administration of GST, such as laws on taxation principles, revenue collection, and the sharing of revenues between the Centre and the States.
- Resolving Disputes: The Council acts as a dispute resolution mechanism between the Centre and States or among States regarding GST implementation.
- Special Provisions for States: The Council drafts special provisions for certain states, particularly for the Northeast and hilly regions.
- Monitoring Implementation: The Council supervises the GST framework and ensures it undergoes periodic reforms to align with current economic realities and meet the needs of stakeholders involved in its implementation.
- Promoting Uniformity: By establishing a common tax system, the Council reduces the incidence of taxes and promotes the free flow of goods across state boundaries, thereby enhancing economic growth.
These roles make the GST Council responsible for facilitating the Indian taxation process and ensuring the efficient operation of the GST system across the country.
The GST Council plays a vital role in ensuring India’s tax system remains effective and unified. By resolving disputes, setting fair tax rates, and creating special provisions, the Council enables smoother inter-state trade and fosters economic growth. Its dynamic role continues to shape the future of India’s taxation landscape.
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