Goods & Service Tax And GST Council

Empowerment of Women- Government Perspective
The Good and Service Tax (GST) was launched in India on July 1, 2017 in a midnight function at the central hall of parliament by the Prime Minister.
It was indeed a historic occasion and a paradigm shift as India moved towards ‘one nation, one tax and one market’.
Journey to launch of GST in India:
  • The GST has already been introduced in nearly 160 countries and France was the first to introduce GST in the year 1954.
  • The idea of GST was first mooted in the year 2000 during the Prime Ministership of Shri Atal Bihari Vaj Payee and a committee was set up headed by the then West Bengal Finance minister Shri Asim Dasgupta to design a GST model.
  • In 2003 – Task force under Shri Vijay Kelkar to recommend tax reforms.
  • 2006 – The then Union Finance Minister in his budget for 2006-07 proposed the GST would be introduced from April 1, 2010.
  • 2014 – The constitution (122nd Amendment) Bill introduced.
  • The constitutional amendment was notified as constitution (101st Amendment) Act 2016 on September 8, 2016.
Features of Constitution (101st Amendment) Act 2016:
  • The GST has been defined as a tax on supply of goods or services or both, except supply of alcoholic liquor for human consumption.
  • On the other hand, five petroleum Products viz. Petroleum crude, motor spirit (Petrol), high speed diesel, natural gas and aviation turbine fuel have temporarily been kept out and the GST council can divide the date from which they shall be included in GST.
  • On inter-state supply of goods and services, an integrated GST (IGST) would be levied and collected by the centre.
  • It will ensure that the GST is truly a destination based consumption tax, and there is seamless flow of input tax credit even when goods are moving from one state to another.
GST Council – Constitution: (Article 279A)
  1. Chairperson – Union Finance Minister
  2. Vice Chairperson – To be chosen amongst the Ministers of State (Ministers of State)
  3. Members – MDS (Finance) and all Ministers of Finance / Taxation of each state.
  4. Quorum is 50% of total members.
  5. States – 2/3 weightage and centre – 1/3 weightage.
  6. Decision by 75% majority.
  7. Council to make recommendations on everything related to GST including laws, rules and rates etc.
The Council is tasked to make recommendations to the Union and the States on the following:
  1. The taxes, cesses and surcharges levied by the centre, the states and the local bodies which may be subsumed under GST.
  2. The goods and services that may be subjected to or exempted from the GST.
  3. The date on which the GST shall be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol) natural gas and aviation turbine fire).
  4. Model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply.
  5. The threshold limit of turnover below which the goods and services may be exempted from GST.
  6. The rates including floor rates with bands of GST.
  7. Any other special rate or rates for a specified period to raise additional resources during any natural calamity or disaster.
  8. Special provision with respect to the North-East states, Jammu and Kashmir, Himachal Pradesh and Uttarakhand.
  9. Any other matter relating to the GST as the council may divide.
Thus the newly created constitutional body the GST Council, has emerged as a new model of co-operative federalism where the centre and the states are willing to share and pool in their sovereignty and give fiscal space to each other.
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