• The 56th meeting of the GST Council was held in New Delhi under the chairpersonship of Union Finance Minister Nirmala Sitharaman on September 3.

• The GST Council made recommendations relating to changes in GST tax rates, provide relief to individuals, common man, aspirational middle class and measures for facilitation of trade in GST. 

GST Council

• Goods and Services Tax Council is a constitutional body for making recommendations to the Union and state government on issues related to GST. 

Composition:

• The chairperson of the GST Council is the Union Finance Minister.

• A member of the GST Council includes the Union Minister of State in charge of revenue or finance.

• Each state government nominates a minister responsible for finance or taxation, or another designated minister, as a member of the GST Council.

• The role of vice-chairperson rotates among the state representatives.

• The chairperson of the Central Board of Excise and Customs (CBEC) attends as a permanent invitee to the GST Council but without voting rights.

• The secretary of the revenue department serves as the ex-officio secretary to the GST Council.

Powers of GST Council:

• A GST Council meeting requires at least 50 per cent of its total members to be present for decisions to be valid.

• Decisions of the GST Council are based on a majority of not less than three-fourths of the weighted votes of members present and voting.

• The central government holds one-third of the total votes, while states collectively have two-thirds weightage in voting.

Functions of GST Council:

• The GST Council determines which taxes, cesses, and surcharges are to be subsumed under GST.

• It decides on the goods and services to be taxed under GST and those exempted from GST.

• The council formulates GST laws and principles for levying and distributing GST on interstate trade.

• During natural disasters, the council may levy special rates or additional resources through GST for relief efforts.

• The council sets turnover thresholds below which businesses are exempted from GST.

• It decides on GST rates, including setting a floor rate and establishing rate bands.

• The council considers and implements special GST provisions for states like Arunachal Pradesh, Assam, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh, and Uttarakhand.

Significance of GST Council:

• Decisions made by the GST Council are based on consensus among all participating states and the central government.

• It reinforces federal principles by involving states in decision-making on tax matters.

• The council addresses emerging challenges and issues related to GST implementation.

• It oversees IT readiness, conducts consultations, workshops, and training for stakeholders involved in GST implementation.