Understanding the Composition and Functions of the GST Council

The 47th GST Council meeting took place in June 2022. Since then, various members have encouraged the central government to hold the 48th meeting, aligning with GST regulations that mandate at least one meeting per financial quarter. The upcoming 48th meeting is expected to finalize specific details concerning the rationalization of GST rates and the taxation of online gaming, horse racing, and casinos. This document explores the GST Council and the crucial contributions of its members to the implementation of GST.

The Role of the GST Council

The Goods and Services Tax (GST) system was introduced in India through the 101st Act of 2016. Following this, the President established the GST Council under Article 279A. Its purpose is to provide recommendations on key GST-related matters.

According to Article 279A, the GST Council operates as a joint body involving both the central government and state governments, tasked with making all significant GST decisions. The Union Cabinet subsequently approved the formation of the first GST Council on September 12, 2016, along with the establishment of its secretariat in New Delhi.

Organizational Structure of the GST Council

Currently, the GST Council comprises 33 members. As stipulated by Article 279A, its composition includes:

• The Union Finance Minister, who serves as the Council's chairperson.
• The Union Minister of State for revenue (finance) from the central government.
• A minister from each state, either in charge of finance or taxation, or a nominee appointed by the respective state to serve on the GST Council.

The state ministers collectively elect a vice-chairperson for the GST Council from among themselves. The Secretary (Revenue) holds the position of ex-officio secretary for the Council. Additionally, the chairperson of the Central Board of Excise and Customs (CBEC) is a permanent invitee to all Council proceedings.

Responsibilities of GST Council Members

The primary duty of the GST Council is to develop an accessible and technology-driven GST framework, incorporating extensive consultations with both the Union and state governments. Article 279A (4) outlines the core functions of the GST Council members.

Authority and Obligations of GST Council Members

The GST Council performs its functions, guided by the need for a unified national market and a consistent GST structure, as mandated by the GST Act.

1. Recommendations under Article 279A (4): The GST Council is responsible for making recommendations on:

• Which goods and/or services should be subject to or exempted from GST.
• The subsumption of existing taxes, cesses, and surcharges levied by central, state, or local authorities into the GST law.
• Principles governing Integrated Goods and Services Tax (IGST) levy and the place of supply, as well as model GST laws.
• Appropriate GST rates and floor rates, particularly for generating additional resources during natural disasters or emergencies.
• Special provisions for specific categories of states and territories, including Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Himachal Pradesh, Uttarakhand, and Jammu and Kashmir.
• Threshold turnover limits below which certain goods and/or services are exempt from GST.
• Any other GST-related issue determined by the Council.

2. Petroleum Products: The GST Council will propose the effective date for applying GST to petroleum crude, motor spirit, high-speed diesel, natural gas, and aviation turbine fuel (ATF).
3. Dispute Resolution: Members of the GST Council are to establish a mechanism for resolving any disputes arising from the Council's recommendations or their implementation, specifically between:

• The Union government and one or more states.
• The Union government and any state(s) on one side versus one or more states on the other.
• Any two or more states.

4. Operational Procedures: The GST Council members will define the procedures for carrying out their duties.
5. Quorum and Voting: Half of the total GST Council members must be present to form a quorum. All decisions require a majority approval of at least three-quarters of the total votes cast by the members present and voting. This voting is subject to:

• The Central Government's votes carrying a one-third weightage in the total votes.
• The state governments' votes collectively accounting for the remaining two-thirds weightage of the total votes.

It is important to note that a recent Supreme Court (SC) ruling in the case of Union of India Vs Mohit Minerals Private Limited clarified that the recommendations made by the GST Council members are not legally binding on the government. The court stated that under Article 246A, both Parliament and state legislatures possess simultaneous power to legislate on GST and can exercise flexibility in adopting the Council's advice.

GST Council Member Roster for 2024-25

The most recent GST Council includes the following individuals:

This list can also be viewed on the official website.

The GST Council stands as the first constitutional federal body dedicated to overseeing GST law and determining its application through consultation with all states. Its members are tasked with proposing adjustments to GST law in response to evolving economic conditions.

Leadership of the GST Council

The GST Council Chairman presides over the Council. Currently, the Union Finance Minister, Smt. Nirmala Sitharaman, holds the position of GST Council Chairman. The Chairman's responsibilities include leading Council meetings, setting agendas, and ensuring the implementation of the Council's recommendations.