The Modi government on Monday approved the setting up of a GST Council, which will decide the rate of tax under the new Goods and Services Tax (GST) regime, likely to kick in from April 1, 2017. The Council will consist of Union Finance Minister, Minister of State in charge of Revenue Department and State finance ministers, the official spokesperson tweeted after a Cabinet meeting headed by Prime Minister Narendra Modi.
The Cabinet “approved setting up of GST Council and setting up its Secretariat,” the statement said adding the council will hold its first meeting on September 22 and 23. It will make recommendations on important issues related to GST, including items and rates.
GST implementation steps are ahead of schedule so far, the government said. “The steps required in the direction of implementation of GST are being taken ahead of the schedule so far.” The statement said, “The Cabinet also decided to provide adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State governments.”
While the GST Council will be created as per Article 279A of the amended Constitution, the GST Council Secretariat will have its office in New Delhi. The Revenue Secretary will be the ex-officio Secretary to the GST Council, which will have Chairperson, Central Board of Excise and Customs (CBEC) as a permanent invitee (non-voting).
GST Council
The GST Council, which will be a joint forum of the Centre and the States, shall be headed by the Union Finance Minister. Minister of State in charge of Revenue will be its member and so will be minister in-charge of finance or taxation or any other minister nominated by each State Government. 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 and special provisions for certain States.
While the Centre will have one-third vote in the GST Council, states together will have a two-third say. To adopt a resolution, three-fourth majority would be required. The Constitution (122nd Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on September 8, 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 September 12, 2016 was issued on September 10, 2016.
