In 1999, a significant financial reform began to take shape in the corridors of power. Prime Minister Atal Bihari Vajpayee and his economic advisory panel mooted the concept of a single, unified Goods and Services Tax (GST). Fast forward to 2017, after intricate negotiations, thorough planning, and tireless efforts from various stakeholders, the GST was formally implemented on July 1st.
This mammoth tax overhaul aimed to consolidate various indirect taxes levied by both state and central governments, replacing them with a more streamlined, destination-based tax system. The numerous taxes it replaced included the likes of VAT, excise duty, and a plethora of others.
A Glimpse into Recent Happenings
Latest from the GST Council’s Desk:
28th July 2023: As tweeted by the official GST Council account, the 51st meeting will convene on 2nd August 2023 via video conferencing. Buzz is that the meeting might approve a 28% GST levy on casinos, race courses, and online gaming.
11th July 2023: Marking the 50th meeting, significant decisions were taken. Among them was the resolution to tax online gaming, casinos, and horse racing at 28%. Other items on the agenda included aligning discrepancies between GSTR-2B and GSTR-3B and recalibrating GST rates on a variety of goods and services.
Demystifying the GST Council
But what powers this monumental change in the tax structure of India? Enter the GST Council.
The GST Council is the guiding light behind the tax’s policies and regulations. Led by the Union Finance Minister Nirmala Sitharaman, this council is an amalgamation of state finance ministers, working in tandem to ensure the smooth functioning and uniformity of GST across the nation.
Its pivotal role lies in determining the tax rate, setting due dates for forms, and deciding on tax laws. The Council strives for a single, uniform tax rate across the country.
Understanding the GST Council’s Composition
Incorporated under Article 279(1) of the amended Indian Constitution, the GST Council’s inception ensures joint participation between the Centre and the States. Its structure comprises:
Chairperson: Union Finance Minister, previously held by Arun Jaitley.
Members: Union Minister of State (in charge of Revenue or Finance) and the Minister responsible for finance or taxation from each State.
The Council’s mandate extends to key GST-related decisions, such as determining which goods and services fall under GST, setting tax rates, and considering any special provisions or rates for specific scenarios or states.
Unique Features of the GST Council:
Location & Leadership: Based in New Delhi, the Revenue Secretary serves as the Ex-officio Secretary to the Council.
Inclusivity: The Central Board of Excise and Customs (CBEC) has a seat at the table, albeit without voting rights.
Staffing: In addition to creating positions like Additional Secretary and four commissioner posts, the Secretariat draws officers from both Central and State Governments.
Funding: The Central government entirely finances the GST Council Secretariat’s operational and capital expenditures.
A Peek into the GST Council Meetings
These meetings are the backbone of GST implementation and adaptation. The results of such meetings impact every dealer, from thresholds to e-way bills. For instance:
Goods valued over Rs.50,000 require online registration before transportation, as per the provisions on e-way bills.
Anti-profiteering screening committees are on the horizon to bolster the National Anti-Profiteering Authority under GST.
Furthermore, several thresholds and benchmarks were decided, such as a Rs.20 lakh annual limit for most states, differing composition scheme limits, and various exclusions from the composition levy.
With the 51st meeting looming, the Indian business ecosystem waits with bated breath. The decisions taken will influence a myriad of sectors, continuing the GST Council’s legacy of sculpting the tax landscape of India.
In conclusion, the GST Council, with its intricate structure and critical responsibilities, remains an essential component of India’s tax regime. Its decisions, directly and indirectly, touch the lives of millions, making it a cornerstone of the nation’s economic narrative.