GST Counsel

The Modi Government has introduced the 122nd Constitutional Amendment Bill to the Table of the Parliament in last winter session held December 2014. This bill will paved the way for implementation of national level GST. Union Finance Minister Arun Jaitley had earlier expressed the hope that the 122nd Constitutional Amendment Bill on the Goods and Services Tax would be passed in the upcoming session of Parliament beginning 20th April 2015.

One of the important clause in this Constitutional Amendment Bill is relates to creation of Goods and Services Tax Counsel (“GST Counsel”). The Bill proposed to empower the President to Constitute GST Counsel within 60 days from the date this 122 Constitutional Amendment Bill will become an Act. All major power relating to implementation, rates of GST, exemptions, administration  etc. are left with the GST Counsel hence the Counsel will become the supreme body for GST administration. The Counsel will recommend to central and state governments on matters relating to GST.

The GST Counsel will be headed by the Union Finance Minister as Chairman. Finance Ministers or any other ministers nominated by the States will be  the members of the counsel. The members representing States will elect one among them as Vice-Chairman. The Union Minister of State-in-charge will also a member of the Counsel.

The GST Counsel shall discharge its function based on two principals i.e. Harmonised Structure of GST and Development of National Market.

As proposed, the GST Counsel has the power to recommend to Central and State Government on following matters:

  1. Taxes, cesses and surcharges to be subsumed in the GST,
  2. Goods and Services which may be subject to GST,
  3. Goods and Services which may be exempted from GST,
  4. model GST Law, principal of levy, apportionment of IGST among Central and State, Principal gravening the place of supply,
  5. the threshold limit for exemption from GST,
  6. the Rate of GST including floor rate and bands,
  7. any special rate or rates for specified period to raise additional resources,
  8. special provision with respect to States of J&K, North east states, Himachal Pradesh and Uttarakhand,
  9. any other matter relating to GST.

The proposed bill also empower the GST Counsel to recommend the date from which petroleum and petroleum goods will be subject to the GST. The bill contains special provision regarding petroleum and petroleum goods which will not be subject to GST till recommended by the GST Counsel. Till such time, the Central and State Governments are continue to tax petroleum and petroleum goods as per current practices.

The approval of this Bill and consequently creation of GST Counsel by President are most important  event for rapid implementation of much awaited GST regime.

Once it is approved, the next stage would be to get the approvals of various states and then get all the subordinate amendments drafted, circulated, accepted by all government and in the course of the year present before Parliament.

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