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Laxmikant Summary: Goods and Services Tax Council | Indian Polity for UPSC CSE PDF Download
| Table of contents |
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| Establishment |
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| Vision and Mission |
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| Composition |
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| Working |
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| Functions |
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| Other Functions |
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Establishment
Goods And Services Tax CouncilIn 2016, the Joint Amendment Act laid the groundwork for a new tax system called the Goods and Services Tax (GST). For this tax to work smoothly, the central government and state governments need to cooperate and coordinate. To make this happen, the amendment created a special body called the Goods and Services Tax Council (GST Council).
Article 279-A of Indian Constitution
- The Joint Amendment Act of 2016 allowed for a new tax system, known as the Goods and Services Tax (GST), to be implemented in the country.
- To ensure the proper management of this tax, there needs to be strong cooperation and coordination between the central government and the individual states.
- The amendment created a way for this consultation process by establishing a Goods and Services Tax Council, which is often referred to as the GST Council.
- This amendment added a new Article 279-A to the Constitution.
- This Article gives the President the power to form the GST Council by issuing an order.
- In 2016, the President used this authority to set up the Council.
- The Secretariat for the Council is based in New Delhi.
- The Union Revenue Secretary serves as the ex-officio Secretary to the Council.
Question for Laxmikant Summary: Goods and Services Tax CouncilTry yourself: What is the purpose of the Goods and Services Tax Council (GST Council)?View Solution
Vision and Mission
- The Council, while performing its duties, should focus on creating a consistent structure for CST and developing a unified national market for goods and services.
- Additionally, the Council is responsible for setting the procedures for how it carries out its functions.
- The vision of the Council is to:
- Establish the highest standards of cooperative federation in how the Council operates.
- Serve as the first constitutional federal body with the authority to make all significant decisions related to CST.
- The mission of the Council is to:
- Develop a CST structure through extensive consultations.
- Create a framework that is driven by information technology and is user-friendly.
Question for Laxmikant Summary: Goods and Services Tax CouncilTry yourself: What is one of the key responsibilities of the Goods and Services Tax (GST) Council?View Solution
Composition
The Council is a group that includes members from both the central government and the states. Here are the key members:
Composition of Goods & Service Tax Council
- Chairperson: The Union Finance Minister will serve as the Chairperson of the Council.
- Member: The Union Minister of State responsible for Revenue or Finance will also be a member.
- State Representation: Each state government will nominate a Minister responsible for Finance or Taxation, or any other Minister of their choice to be part of the Council.
- Vice-Chairperson: Members from the states will select one of their own to be the Vice-Chairperson of the Council.
- Term Decision: The members can decide on the term duration for the Vice-Chairperson.
- Permanent Invitee: The Union Cabinet has also decided that the Chairperson of the Central Board of Indirect Taxes and Customs (CBIC) will be a permanent invitee (non-voting) to all Council meetings.
Working
- The decisions made by the Council occur during its meetings.
- A meeting requires a quorum, which is half of the total members of the Council.
- For any decision to be valid, it must be approved by a majority of at least three-fourths of the weighted votes from the members who are present and voting.
- The voting follows these principles:
- The vote from the central government carries a weight of one-third of the total votes cast during that meeting.
- The votes from all the state governments combined account for two-thirds of the total votes cast at that meeting.
- Any actions or proceedings of the Council remain valid despite the following issues:
- Any vacancy or issue in the Council's formation.
- Any problem related to the appointment of a member of the Council.
- Any procedural mistakes made by the Council that do not impact the essence of the case.
Question for Laxmikant Summary: Goods and Services Tax CouncilTry yourself: What is one of the key responsibilities of the Goods and Services Tax (GST) Council?View Solution
Functions
Advantages of GST
- The Council needs to provide suggestions to the central and state governments on several important topics:
- Determine the taxes, cesses, and surcharges imposed by the central government, state governments, and local authorities that should be included in the Goods and Services Tax (GST).
- Identify which goods and services will be subject to GST and which ones will be exempt from it.
- Develop Model GST Laws and establish the rules for how GST is applied, shared in cases of interstate trade, and the criteria for defining the place of supply.
- Set the threshold limit for turnover, below which certain goods and services may be exempt from GST.
- Decide on the GST rates, including minimum rates and bands for GST.
- Establish any special rate or rates for a specific time to gather extra funds during natural disasters or emergencies.
- Make special provisions for the states of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.
- Address any other issues related to GST that the Council may choose to discuss.
Other Functions
In addition to its main responsibilities, the Council has some other important functions:
Summary of GST
- The Council will suggest a date for when GST can be applied to petroleum crude, high-speed diesel, motor spirit (petrol), natural gas, and aviation turbine fuel.
- If there is a disagreement regarding the recommendations or how they are carried out, the Councilwill set up a way to resolve the issue:
- Between the central government and one or more states.
- Between the central government and any state or states on one side and one or more other states on the other side.
- Between two or more states.
- The Council must also suggest how to provide compensation to the states for any loss of revenue due to the introduction of GST for a period of five years.
- Based on this suggestion, the Parliament will decide on the compensation.
- As a result, the Parliament created the law in 2017.
Question for Laxmikant Summary: Goods and Services Tax CouncilTry yourself: What is one of the key responsibilities of the Goods and Services Tax (GST) Council?View Solution
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FAQs on Laxmikant Summary: Goods and Services Tax Council - Indian Polity for UPSC CSE
| 1. What is the main purpose of the Goods and Services Tax Council? |  |
Ans. The main purpose of the Goods and Services Tax Council is to make recommendations to the Union and State Governments on issues related to Goods and Services Tax (GST), including tax rates, exemptions, and implementation of the tax structure for a seamless and efficient taxation system in India.
| 2. Who are the members of the Goods and Services Tax Council? | |
Ans. The Goods and Services Tax Council is composed of the Union Finance Minister as the chairperson, the Minister of State for Finance, and the finance ministers of all the states and Union territories. This diverse representation ensures that the interests of both the central and state governments are taken into account.
| 3. How does the Goods and Services Tax Council function? | |
Ans. The Goods and Services Tax Council functions by holding regular meetings where members discuss and deliberate on various aspects of GST. Decisions are made based on consensus, and the outcomes of these discussions are then implemented by the respective governments to ensure uniformity in tax policies across the country.
| 4. What are the key functions of the Goods and Services Tax Council? | |
Ans. The key functions of the Goods and Services Tax Council include making recommendations on the GST rate structure, determining the goods and services that will be exempt from tax, addressing the issues related to cross-border taxation between states, and ensuring proper implementation of the GST regime.
| 5. What role does the Goods and Services Tax Council play in resolving disputes related to GST? | |
Ans. The Goods and Services Tax Council plays a significant role in resolving disputes related to GST by providing guidelines and recommendations for the resolution of conflicts that may arise between the Centre and states or among states regarding the implementation and interpretation of GST laws.
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