Cabinet approves creation of GST Council and its Secretariat

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has approved setting up of GST Council and setting up its Secretariat as per the following details:  

1. Creation of the GST Council as per Article 279A of the amended Constitution;
2. Creation of the GST Council Secretariat, with its office at New Delhi;
3. Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
4. Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;
5. Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).

Background:

The Constitution (122nd Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8^th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. 

• As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. 
• The notification for bringing into force Article 279A with effect from 12^th September, 2016 was issued on 10^th September, 2016.

What is the GST Council?

The GST Council will decide on the tax rate, will recommend the taxes to be subsumed and exempted from GST, the rates of taxation and the model Central, State and Integrated GST laws.

• It is the council's responsibility to have one uniform rate of GST tax to be introduced all over India. It will also decide the threshold for levy of the tax, as well as the dispute resolution mechanism.
• Apart from these, it will also decide special rates during adversities and special provisions for some states.

The government has notified 12 September as the date for setting up of the GST Council which will be completed within 60 days.

What is the structure of the Council?

As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: -

a) Union Finance Minister                                          -           Chairperson

b) The Union Minister of State,

in-charge of Revenue of finance                           -           Member

c) The Minister In-charge of finance or

taxation or any other Minister nominated 

by each State Government                                    -           Members

While the Centre will have one-third vote, states together will have a two-third say. To adopt a resolution, three-fourth majority would be required.

Role of GST Council: 

As per Article 279A (4), the Council will 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, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

• The first meeting of the GST Council will be held on September 22-23 in the national capital.