The GSTC has been notified with effect from 12th September, 2016. GSTC is being assisted by a Secretariat. We will begin our discussion with what is the meaning of GST. GST is a comprehensive Indirect Tax on manufacture, sale and consumption of goods and services throughout India to replace taxes levied by the central and state governments.

Article 279-A of the Constitution empowers the President to constitute a joint forum of the Centre and States namely, Goods and Service Tax Council (GST Council). GST Council came into force on 12th September, 2016. President constituted the GST Council on 15th September, 2016

GST Council consists of the following members

  • Chairperson-Union Finance Minister
  • Members- Union Minister of State in charge of Revenue or Finance, Minister in charge of Finance or Taxation or any other Minister nominated by each State Government

GST Council

The following major decisions have been taken by the GSTC in different meetings held by them:

  1. The threshold exemption limit would be 20 lakh. For special category States enumerated in article 279A of the Constitution, threshold exemption limit has been fixed at 10 lakh.
  2. Composition threshold shall be 75 lakh. Composition scheme shall not be available to inter-State suppliers, service providers (except restaurant service) and specified category of manufacturers.
  3. Existing tax incentive schemes of central or state governments may be continued by respective government by way of reimbursement through budgetary route.
  4. There would be four major tax rates namely 5%, 12%, 18% and 28%. The tax rates for different goods and services have been finalized. Besides, some goods and services would be under the list of exempt items. The exempted services has been finalized, except services supplied by Goods and Services Tax Network which is the addition to the list of exempted services under service tax regime. Rate for precious metals is an exception to ‘four-tax slab-rule’ and the same has been fixed at 3%. A cess over the peak rate of GST @ 28% on certain specified luxury and demerit goods, like tobacco and tobacco products, pan masala, aerated waters, motor vehicles, would be imposed for a period of five years to compensate States for any revenue loss on account of implementation of GST. The list of services in case of which reverse charge would be applicable has also been finalized.
  5. The five laws namely CGST Law, UTGST Law, IGST Law, SGST Law and GST Compensation Law have been recommended.
  6. In order to ensure single interface, all administrative control over 90% of taxpayers having turnover below 1.5 crore would vest with State tax administration and over 10% with the Central tax administration. Further all administrative control over taxpayers having turnover above 1.5 crore shall be divided equally in the ratio of 50% each for the Central and State tax administration.
  7. Powers under the IGST Act shall also be cross-empowered on the same basis as under CGST and SGST Acts with few exceptions.
  8. Power to collect GST in territorial waters shall be delegated by Central Government to the States.
  9. Formula and mechanism for GST Compensation Cess has been finalised.
  10. Nine rules on registration, composition levy, valuation, tax invoice, input tax credit, payment, returns, refund and transitional provisions have been recommended.
  11. www.gst.gov.in, managed by GSTN, shall be the Common Goods and Services Tax Electronic Portal.
  12. Rate of interest on delayed payments and delayed refund has been recommended.
  13. Rate of Tax Collection at Source (TCS) has been recommended.

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