What Is GST Council And How Does It Work | Explained

Chandigarh: As the two-day meeting of Good and Services Tax (GST) Council began on Tuesday (June 28), all eyes are glued to the event as some important decisions are expected to be made. Headed by the Finance Minister Nirmala Sitharaman, the 47th GST Council meeting will include several key issues such as GST compensation to states, GST rate revisions of certain items and services, and easier compliance norms for taxpayers. Further, the Council will also clear levying the highest tax of 28 per cent on online games, casinos and horse racing, besides, discussing a report of a GoM on high-risk taxpayers under GST to curb evasion.Also Read – Petrol Price Likely To Come Down By 30%, Liquor 17% Cheaper In Next 2 Days | Full Details Inside

For the unversed, here are the details on the work and function of GST Council: Also Read – GST On Cryptocurrency Soon? Council To Take Decision Next Week | Check Details Here

What is GST Council?

Good and Services Tax Council is a constitutional body under Article 279A(1), headed by the Union Finance Minister and has Union Minister of State for Finance and the Finance Ministers or any other ministers appointed from the state governments as members. Also Read – Shimla, But Not Shimla! Beat The Heat At These 6 Hill Stations Near Chandigarh This Summer

The secretariat office is situated in New Delhi and Union Revenue Secretary acts as the ex-officio Secretary to the GST Council. The supreme court last month made it clear that the Council is only a recommendatory body and its recommendations are not binding on Centre or states. As per the Supreme court, the Council’s recommendations will have a “persuasive value” and that both Parliament and the state legislatures can equally legislate on the matters related to GST.

What Does GST Council Do?

The main task of the council is to make recommendations to the Union and the States on important issues related to GST, like:

• The goods and services that may come under the banner of GST,
• Model GST Laws,
• Principles that govern Place of Supply,
• Threshold limits,
• GST rates including the floor rates with bands,
• Special rates for raising additional resources during natural calamities/disasters,
• The appointment of Goods and Services Tax levied on supplies in the course of Inter-State trade or commerce under article 269A,
• Making special provisions for the following states: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

The Functioning of GST Council:

The Council must have at least 50 percent members present and to be able to hold a meeting and make recommendations. The suggestions made by the council need a three-fourth majority of the members present and voting in the meetings. The central government’s vote counts as one-third of the total votes, while the weightage of the states’ total votes are two-thirds.

Any act, decision or proceedings shall not be declared invalid on the basis of any remaining deficiency at the time of the establishment of the GST Council i.e.

• if there is any vacancy remaining in the Council
• if there is any defect in the constitution of the Council
• if there is any defect in the appointment of a person as a member of the Council
• if there is any procedural non-compliance.

Key Issues For GST Council’s Current Meeting

The Council is expected to discuss the following issues in the meeting:

1. The Council is likely to raise the issue of rate changes recommended by the Fitment Committee. The committee has reportedly recommended reducing GST rates from 12 per cent to 5 per cent on ostomy appliances (including pouch or flange, barrier cream, sleeves, irrigator kit, micro-pore tapes, stoma adhesive paste, belt).
2. The committee has also recommended reduction in GST rate on ropeway travel to 5 per cent from 18 per cent, placing this request before the GST Council in September last year.
3. It has also proposed a flat 5 per cent GST on prostheses (artificial limbs), orthopaedic implants (trauma, spine, and arthroplasty implants in body), and orthoses (braces, splints, belts & calipers).
4. The Council will also take up the issue of imposing 28 per cent GST on online gaming, casinos and horse racing.
5. It is also likely to waive the requirement for filing refund claims between March 1, 2020, and February 28, 2022, in view of the disruptions caused by the coronavirus pandemic.
6. It is also likely to consider levying a 28 per cent goods and services tax on cryptocurrencies.
7. It is also expected to discuss changes in law to facilitate provision for setting up GST Tribunals.

GST Council has conducted 46 meetings so far. This is the 47th meeting of the GST Council, which is taking place in Chandigarh and its final outcome will be announced on Wednesday.