Goods and Services Tax (GST)

GST Council


From UPSC perspective, the following things are important :

Prelims level : GST Council

Mains level : Not Much

The Union Finance Minister has heaped praises on Goods and Services Tax (GST) Council.

Why in news?

  • FM was reacting to a case made by Fifteenth Finance Commission chief N.K. Singh to set up a Fiscal Council with the Centre and States.
  • This is another such recommended body to act as a bridge between the GST Council and the Finance Commission.

What is the GST Council?

  • The GST regime came into force after the 101st Constitutional Amendment was passed by both Houses of Parliament in 2016.
  • The GST Council – a joint forum of the Centre and the states — was set up by the President as per Article 279A (1) of the amended Constitution.
  • The members of the Council include the Union Finance Minister (chairperson), the Union Minister of State (Finance) from the Centre.
  • Each state can nominate a minister in-charge of finance or taxation or any other minister as a member.

Why was the Council set up?

  • The Council, according to Article 279, is meant to “make recommendations to the Union and the states on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws”.
  • It also decides on various rate slabs of GST.
  • For instance, an interim report by a panel of ministers has suggested imposing 28 per cent GST on casinos, online gaming and horse racing.
  • A decision on this will be taken at the Council meeting.

Recent reforms

  • The ongoing meeting is the first since a decision of the Supreme Court in May this year, which stated recommendations of the GST Council are not binding.
  • The court said Article 246A of the Constitution gives both Parliament and state legislatures “simultaneous” power to legislate on GST .
  • Recommendations of the Council are the product of a collaborative dialogue involving the Union and States.
  • This was hailed by some states, such as Kerala and Tamil Nadu, who believe states can be more flexible in accepting the recommendations as suited to them.


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