Goods and Services Tax (GST) Council: UPSC Notes PDF

By Durga Prashanna Mishra|Updated : May 30th, 2022

GST Council is a constitutional body that has the power to make recommendations to the State government and Union on issues and other things related to the Goods and Service Tax of India. GST Council UPSC Notes are crucial for both the Economics and Polity section in UPSC Exam. Goods and Service Tax was introduced in the Parliament and passed on 3rd August 2016 by Rajya Sabha and by Lok Sabha on 8th August. 

According to Article 279A (1) of the amended constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. In this post, we will be discussing the GST Council which would be important from the UPSC exam point of view. GST Council UPSC notes cover all the facts and information related to the Goods & Services Tax Council (GST Council) in India. 

Table of Content

What is GST Council?

GST Council is a constitutional body that is responsible to make recommendations to the Union or State government regarding issues involving the Goods and Service Tax. GST Council plays a crucial role in taking decisions regarding the Goods and Service Tax in India. The vision of the GST Council is to uphold the greatest norms of cooperative federalism in the Council's operations. The GST Council is the first constitutional federal body with the authority to make all significant GST decisions.

  • GST Council is constituted as per Article 279-A of the Indian Constitution.
  • The GST Council Secretariat is located in New Delhi.
  • Union Revenue Secretary is the ex-officio secretary of the GST Council.
  • GST Council is responsible for dictating the tax exemption, tax rate, tax laws, and the due date of forms, keeping in mind the special rates, tax deadlines, and provisions. 
  • The main goal of the GST Council is to ensure to have one uniform tax rate for Goods and Services across India.

GST Council 2022: 47th GST Council Highlights

The first day of the 47th GST council was chaired by the Union Finance Minister Nirmala Sitharaman and the state counterparts. Let's discuss the highlights of the 47th GST Council meeting below.

  • E-way bill for intra-state movement of gold to be decided by the state.
  • GoM also suggested that in casinos, the tax would be levied on the full face value of the coins or chips purchased from the casino by a player. The decision on this will be made later.
  • Online retailers below 40 lakhs are not required for GST registration for Intra-state transactions.
  • GoM suggested IT reforms and it has been approved by the GST council.
  • Till 2016, GST Cess collection will be sued for repayment.
  • No decision on 28% GST on casinos and online gaming- Council asks to fine a report to GoM by 15th July.
  • GoM on IT Reforms: Permanent GoM to give suggestions on GSTN
  • CST Compensation Cess for the state will continue
  • Electric vehicles, whether or not fitted with battery packs will be eligible for the concessional GST rate of 5%.
  • GST was also raised for the works contract for roads, railways, bridges, metro, effluent treatment plant, crematorium; works contract supplied to state and central governments, canals, pipelines, local authorities for historical monuments, water supper plants, hospitals educational institution, and works contract supplied to state and central governments, local authorities, union territories involving predominantly earthwork.

History of GST Council 

The 101st Amendment Act of 2016 brought a new tax regime (Goods and Services Tax) to the country. For an efficient and smooth administration of GST requires coordination and corporation between the states and the center.

To ease the consolation process, the amendment provided for the formation of a GST Council. Article 279-A was inserted in the Indian Constitution, and it empowered the President to form a GST Council. So, the President constituted the GST Council in 2016, and the secretariat of the Council is now located in New Delhi. 

  • The vision behind establishing the GST Council is to establish a constitutional body that has all the powers to take major decisions related to the Goods and Service Tax.
  • The mission of the GST Council is to make the GST structure user-friendly, and which is information technology-driven.

Composition of GST Council

The composition of the GST Council is a crucial part of the GST Council UPSC Notes. The council is a joint forum of the center and states and it consists of the following members.

  • The chairperson of the GST Council is Union Finance Minister. The other members of the GST Council include the Union State Minister of Revenue or Finance and Ministers in charge of Finance or Taxation of all the States.
  • The Council members from the states have to choose one member amongst themselves who would become the Vice-Chairperson of the GST Council. They have also the power to decide his term.
  • GST Council has 33 members, out of which 2 members are from the center and 31 members are from 3 Union territories and 28 states with legislation.
  • Chairperson of the CBEC (Central Board of Excise and Customs) as a permanent invitee (Non-Voting) to all the proceedings.

Functions of GST Council 

The GST Council has to make recommendations to the States and Union on the following matter

  • The cesses, taxes, and surcharges levied by the States and Union and the local bodies which are under the Goods and Services Tax
  • Any special rates for a certain period to raise additional resources during any natural disaster or calamity.
  • Model GST laws, Principles of the levy, apportionment of Goods and Services Tax levied on supplies in the course of commerce or Inter-state trade under article 269A, and the principles that control the place of supply. 
  • The goods and services that may be exempted or subjected to the Goods and Services tax.
  • The threshold limit of turnover below which the services and goods mat be exempted from GST.
  • The rates include the floor rates with the bands of Goods and Service Tax,
  • Special provision with respect to the states- Arunachal Pradesh, Jammu and Kashmir, Mizoram, Nagaland, Tripura, Assam Sikkim, Manipur, Meghalaya, Himachal Pradesh, and Uttarakhand.
  • Additionally, the GST Council has the power to recommend the date on which the GST may be levied on petrol, high-speed diesel, petroleum crude, aviation turbine fuel, and natural gas.
  • Furthermore, the GST Council has to recommend compensation to the states for the loss of revenue due to the introduction of GST for a period of 5 years. According to the recommendation, the parliament decided on the compensation.

How GST Council Takes a Decision?

The GST Council takes every decision at a meeting where a majority of not less than three-fourths of the votes of the present member and voting, as per the following conditions:

  • While making a decision the Central Government of India has a weightage of one-third of the total votes cast.
  • Also, the votes of the States Governments taken must have a weightage of two-thirds of the total votes cast.

On the following grounds, any proceedings or act of the GST Council will not become invalid

  • Any deficit or vacancy in the constitution of the GST Council
  • Any defect in the appointment of any member of the GST Council
  • Any procedural irregularity of the GST Council does not affect the merits of the case

GST Council UPSC

GST Council is a part of both the UPSC Prelims Syllabus and the UPSC Mains Syllabus under the Economics and Polity section. This topic can be covered with the help of both Polity Books for UPSC and Economics UPSC Books. Apart from covering the books, candidates also need to focus on the current affairs section and glance through the UPSC Previous Year Question Paper to see the questions asked on this topic.

Candidates preparing for the upcoming UPSC Exam must prepare the GST Council UPSC topic along with the current affairs to be able to answer all the questions related to it. 

GST Council UPSC Notes PDF

Candidates can download the GST Council UPSC Notes PDF directly from the link given below. After that, they can take a printout of this page which would make this section easier to cover.

>> Download GST Council UPSC Notes PDF

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FAQs GST Council UPSC

  • GST Council is a constitutional body that is responsible for making recommendations to the State government and union on the issues related to Goods and Service Tax. GST Council aims to ensure a uniform system of GST to avoid any confusion or conflict, and for the betterment of the national market.

  • The GST Council is a constitutional body created under Article 279A of the Indian Constitution. The Goods and Services Tax (GST) is the One Hundred and First Amendment of the Constitution. The GST Council is considered a federal body where both the center and the states have an equal say. It is chaired by the Union Finance Minister and makes recommendations to the Union and State Government on issues related to Goods and Service Tax. The GST Council is a Constitutional Body and derives its powers from the provisions of the Constitution. Constitutional Bodies are mentioned in the Constitution and derive their powers from it whereas Statutory bodies are established by an act of the Parliament.

  • The GST Council was constituted in 2016. The 101st Amendment act 2016 made the introduction of GST possible in India. After that, the president issued the order to constitute the Goods and Service Tax council.

  • The GST Council is tasked with the duties to make the changes and take important decisions on Goods and Service Tax in India. The GST Council has the power to determine the rate of tax under the GST model, the due date of GST form submission, tax exemption rules, tax-related deadlines, and special exemptions for some states in India.

  • In the GST Council, the Union Finance Minister is the Chairperson. The Union Minister of State of Revenue or Finance, and the Minister in charge of taxation or finance or any other minister nominated by each government are members.

  • GST Council regulates and controls each and every step involving the Goods and Service tax in the nation. It also takes decisions over tax rates and other things related to the Goods and Service tax.

  • GST Council takes decisions regarding the Goods and Services Tax in India. The council is responsible for and the due date of forms, tax exemption, tax rate, tax laws, keeping in mind the special rates, tax deadlines.

  • The vision behind establishing the GST council is to have a constitutional body that has all the control and power to make the major decisions relating to Goods and Service Tax in India. And the mission of this council is to make the GST structure more user-friendly and IT-driven.

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