Importance of GST council

Importance of GST council

The Goods and Services Tax (GST) Council is a body appointed by the Indian government. Its main purpose is to make recommendations to the Union and states governments regarding GST on goods and services. The council is headed by the finance minister of India, who will make all decisions in the council based on consensus. All states and the government have an equal say in this council. They will ensure that consumers do not face high taxes after the introduction of GST in India and easier tax process for businesses. It is the highest decision-making body for Goods and Services Tax (GST), which India has finally witnessed after nearly a decade of wait

Why do we need a GST council?

GST Council is the apex decision making body when it comes to crucial decisions. It has been formed to eliminate all the tax-related issues faced by businessmen, states and people. Hence directly or indirectly everything forms in its purview whether it is related to DSC error in GST or penalty rates on delayed filing of returns. Click here to find more about DSC errors.

The article 279A (4) specifies that the GST council will be responsible for recommending unions and sates on important GST related issues such as:

  1. Goods and services that may be exempted or subjected from the GST
  2. Model GST laws
  3. Principles that govern the threshold limits, GST rates, special rates in case of calamities/disaster
  4. Principles according to which rules of the place of supply are to be created

GST council is also responsible for implementing two or more two tax rates for goods and services across the nation. The council also looks after the simplification of tax procedures and other related matters.

The main aim of forming this committee was to ensure that a uniform tax rate is applied for various goods and services across the nation. It ensures that there are no multiple taxation processes applied on a single commodity or service in any state. As a result of this, it helps to increase consumer buying capacity as they can buy products at a cheaper rate

Structure of GST council

The GST council is the main governing body of Goods and Services tax. According to the amended Article 279(1), the council is to be constituted by the President of India within 60 days after Article 279 is implemented. The members of GST council are chosen from both the centre and the states. Specially its members are:

  1. Union Minster – he is the chairperson
  2. Union Minister of State – he is a member
  3. Minister in charge of finance or taxation (This could be replaced by any other minister that is nominated by the respective state government)

Some of the crucial decisions taken by the GST council thus far include:

  1. Timeline according to which the GST is to be included
  2. Threshold according to which the composition scheme is available
  3. Rules for conducting business within the GST council
  4. Adopting four slab tax structure (5%, 12%,18%, 28%)

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