Goods and Services Tax Council - GST Council

By : Neha Dhyani

Updated : May 27, 2022, 12:06

The Goods and Services Tax Council is a constitutional body entrusted with regulating and directing all areas of the Goods and Services Tax (GST) administration, including tax inclusion, merger, exemption, and other implementation procedures.

Formed by the 101st Amendment Act of 2016, the body recommends changes and reforms in the GST to the Union and the state governments.

The GST Council merges concepts and regulations into a single document and communicates changes via notifications and circulars released after each meeting.

Structure of the Goods and Services Tax Council

The GST Council is made up of the following personnel:

  • The Union Finance Minister acts as the Chairperson of the Council.
  • The Union Minister(s) of the state in charge of Finance or Revenue is a member.
  • The ministers from all states together choose a Vice-Chairperson among them.
  • The Finance/ Revenue ministers of each state will be the members
  • The Revenue Secretary to the Government of India is the ex-officio Secretary to the Council
  • The Central Board of Excise and Customs Chairman is a permanent invitee for all council meetings. However, (s)he has no vote.

Decision-making Procedure of the Goods and Services Tax Council

The Council takes the decisions through voting. The central government has 25% of the vote, and the states have 75% combined.

Moreover, most of those in attendance and voting must adopt every decision taken at the meeting, with a minimum vote of 75%.

The Quorum of the Goods and Services Tax Council

All decisions taken by the Council shall be valid if and if only not less than half of the members were present at the time of voting.

However, the decisions taken by the Council in the absence of the minimum required members shall not be null and void in the case of:

  • Vacancy in the Council
  • Flawed constitution of the GST committee
  • Faulty appointment of the members
  • Procedural non-compliance

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Functions of the Goods and Services Tax Council

Article 279 A (4) states that the function of the GST council is to make a recommendation(s) to the Union and the state governments regarding:

  • Taxes and equivalent to be merged with the GST
  • Exemption or inclusion of certain taxes into the GST
  • Model laws or rules for GST
  • GST exemption flooring
  • Special provisions for certain states like Meghalaya, Uttarakhand, Assam, Himachal Pradesh, Tripura, Sikkim, Nagaland, Manipur, Mizoram, and the Union Territory of Jammu and Kashmir.
  • Dispute settlement
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Other Functions of the Goods and Services Tax Council

The GST Council will also propose a date for implementing GST on crude oil and associated products.

In addition, the Council shall propose compensation to states for revenue losses incurred as a result of GST adoption over five years.

The parliament decides on compensation depending on the recommendation of the Council.

Being a council set up to decide on the matters related to the GST, it is the first constitutional federal body set up in the country, with a vision to attain the highest standards of competitive-cooperative federalism in its operation.

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FAQs on Goods and Services Tax Council

Q.1 What is the mission of the Goods and Services Tax Council?

The mission of the GST Council is to constitute a GST structure that is information technology-driven and user friendly.

Q.2 Who funds the Goods and Services Tax Council?

The union cabinet allots funds for GST Council meetings and expenses regularly and non-recurring. The union government funds the entire Secretariat.

Q.3 When was the first meeting of the Goods and Services Tax Council held?

On 22nd and 23rd September 2016, the GST Council met for the first time to implement GST on April 1, 2017. Finance Minister Arun Jaitley presided over the two-day meeting, and 29 states and two union territories attended it.

Q.4 Who constitutes the Goods and Services Tax Council?

Under Article 279A of the constitution of India, the President has the authority to establish the Goods and Services Tax Council, which is a federal forum of the Union and state governments.