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Updated on 28th June, 2024 , 4 min read
The Goods and Services Tax Council was formed in the year 2017. It is one of India’s most recognizable constitutional bodies that caters to the administration and execution of the GST system in the country. It was formed to establish cooperative federalism and a uniform tax system nationwide by Article 279A of the Constitution of India.
In simple words, GST is an all-inclusive indirect tax applied to every good and service supplied in India. It took the place of several cascading taxes imposed by the federal and state governments, including VAT, service tax, and excise duty. GST was put into effect on July 1, 2017, with the goals of streamlining the tax code, removing state-to-state tax obstacles, and establishing a single market nationwide.
Let us look at the detailed functioning of the GST Council in the below-mentioned sections.
The GST Council has a vital role to play in determining and approving GST rates for various commodities and services. These include the following:
Legislative Guidance
The GST Council has the authority to suggest legislative matters to the central and state governments on GST laws and directives. This consists of the following:
Conflict Resolution
Disagreements may arise between the Centre and the State. This is where the conflict resolution mechanism of the GST Council comes into effect in resolving these conflicts. This includes:
Administration and Implementation
The GST Council is responsible for monitoring and tracking the administration, as well as executing of GST throughout the nation to enable seamless operation. This consists of the following:
Compensation Apparatus
The GST Council has also set up a compensation apparatus to safeguard State income during the initial phase of the GST implementation. This involves:
Other Functions
The GST Council can acquire additional powers or responsibilities in addition to those listed above if required by law or when new demands arise. This can include:
The Constitutional Foundation of The GST Council
The constitutional body of the GST Council has certain inherent provisions for supervising and directing the national rollout of the Goods and Services Tax (GST). The two major provisions include:
The GST Council has prominent members from both the center and the States. The position of the chairperson is presided over by the Union Finance Minister of the country. However, in their absence, one of the States’ Finance Ministers (chosen by other attendees) fulfills the responsibilities.
Other prominent members of the Council include the Union Minister of State responsible for Revenue or Finance, Minister in charge of Finance or Taxation from each State Government, and other ministers nominated by the respective State Governments to be part of the council.
It is evident from the above details that the GST Council is an integrated federalism between the Center and The State that secures tax decisions in the country. The council not only determines standard and special GST rates but also promotes a fair taxation structure in an attempt to balance the social and fiscal goals of an economy.
The significance of the functions of the GST Council cannot be overstated. Over the years, it has proved to be an essential pillar of India’s tax reform policies.
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By - Nikita Parmar 2024-09-06 10:59:22 , 6 min readThe Indian federal government required a strategy to ensure consistency in tax policies and practices among all of its states and union territories. The introduction of the GST Council provided uniformity and harmonization in taxation policies. Also, the formation of the GST Council promoted cooperative federalism by ensuring that choices on GST rates, exemptions, and threshold limits are made cooperatively.
The formation of the GST Council has been a blessing to the taxation system in our country. It has a number of benefits such as seamless taxing methods for everyone, the elimination of redundant taxation procedures, the introduction of innovative, user-friendly taxation techniques, and improved monitoring to stop fraudulent activity.
The GST Council facilitates legal compliance transparency, and simplification of the tax system throughout the nation. This has a significant impact on the economic landscape of India. Its choices for tax rates, exemptions, and regulations are made to foster economic development, investment, and business growth.
The main function of the GST Council is that it is responsible for the developing tax brackets and other tax-related regulations in India.
GST in India was mainly established to simplify the taxation policies in the country. It has replaced various other taxes, such as excise duties, VAT, service tax, and more, thus reducing the complexity in the tax structure. GST is an all-inclusive tax policy.