GST Council: It’s roles, Powers, matters discussed in recent past meetings

GST Council: It’s roles, Powers & matters discussed in recent past meetings.  GST Council is the main decision-making body that has been formed to finalize the design of GST. This governing body of GST comprises of Union Finance Minister – Arun Jaitley, who is the Chairman of the council, the Minister of State (Revenue) and the State Finance/ Taxation Ministers. The duty of the Council is to make recommendations to the Union and the States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services.


In the GST Council a decision is taken by a three-fourth majority with the Centre having a one-third vote and the states the remaining two-third.

The GSTC has been notified with effect from 12th September, 2016. GSTC is being assisted by a Secretariat. Twenty meetings of the GSTC have been held so far. The following major decisions have been taken by the GSTC:

Functions of the GST Council seeked to include making recommendations on:

  • taxes, cesses, and surcharges levied by the Centre, States and local bodies which may be subsumed in the GST;
  • goods and services which may be subjected to or exempted from GST;
  • Model GST laws, principles of levy, apportionment of IGST and principles that govern the place of supply;
  • threshold limit of turnover below which goods and services may be exempted from GST;
  • rates including floor rates with bands of GST;
  • special rates to raise additional resources during any natural calamity;
  • special provision with respect to Arunachal Pradesh, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
  • any other matters

Members of GST Council:

  • 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 GovernmentMembers

Power of GST council only recommendatory in nature:

As per Article 279A (4), the Council will make recommendations to the Union and the States on important issues related to GST, like

  • a) The goods and services that may be subjected or exempted from GST.
  • b) Principles that govern Place of Supply.
  • c) Threshold limits.
  • d) GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters or RNR
  • e) Special provisions for certain States, etc.
  • f) Transition Provisions

Upcoming 14th Council Meeting – May 18-19 2017

GST Council in its 17th Meeting held on 18 JUN 2017 (SUN) approved the following:

Relaxation in Return filing time-line for first 2 months: A summary return form in GSTR-3B will required to be filed on self-declaration basis for first 2 month i.e. Jul and Aug by 20th day of next month. I.e. for the month of July, a summary return needs to be filed by 20th august after paying appropriate taxes, and for the month of August, the same needs to filed by 20th Sep.

  • GSTR-1 with invoice level details needs to be filed for the month of July by 5th September, and for the month of August by 20th September. GSTR-2 and GSTR-3 for these 2 months will be filed thereafter.
  • 28% limit in hotels will start from Rs.7,500; b/w Rs.2,500- Rs.7,500 the rate will be 18%. GST on restaurants in these hotels will be at par with other air-conditioned restaurants (18%).
  • Cleared all six Rules:
    • Advance Ruling,
    • Appeals & Revision
    • Assessment & Audit
    • e-Way Bill,
    • An anti-profiteering
    • Anti-profiteering body will be setup for 2 years
  • State run lotteries will be taxed at 12% of the face value and state authorised lotteries at 28%.
  • The official launch of the GST will take place on the midnight of 30th and 1st at a function in Delhi.
  • The Next Council Meeting to be held on 30th June before July 1 rollout of GST.

# GST Network will launch an offline excel sheet return format on June 25.

GST 13th Council Meeting

The all-powerful Goods & Services Tax (GST) Council in its 13th meeting held at New Delhi decided the followings:-
1. Approval to draft GST rules (5 out of 9) which were released in September 2016 duly aligned with GST law as approved by Lok Sabha on 29 March, 2017
2. The rules approved by GSTC are in relation to-

  • Registration of taxpayers
  • Payment of tax
  • Filing of returns
  • Invoicing,
  • Debit & Credit notes
  • Refunds

3. The tentative approval has been accorded to the remaining four set for rules which relate to:

  • Valuation of supply of goods / services
  • Input tax credit
  • Transition provision for migration to GST regime
  • Composition scheme rule

Matter has been discussed in 10th meetings of the GST Council

GST Council met for the tenth time at Udaipur on 18th February, 2017 Major decisions which were taken at Udaipur meeting include – 

  • Approval of State Compensation Bill
  • For Union Territories, there will be fourth piece of legislation, UTGST on the lines of SGST law which will be legislated by Parliament
  • GSTC considered several contentious issues to bring about harmonization between legal committee and GSTC giving its directions on the same. Some of these were in relation to agriculture and agriculturist, appellate tribunal, exemptions during transition phase, issue of services and value added in works contracts etc.
  • Legislative Bills to be approved in 11th meeting at Delhi on 4-5 March, 2017.
  • Fitment of rates in commodities to taken up by GSTC after approval of bills i.e. which item in which slab rate. The group of officers are doing the ground work on the same. (It may be noted that businesses are eagerly waiting for fitment as their impact analysis is dependent on the same).

Matter has been discussed in 7th & 8th meetings of the GST Council

Significant progress has been made on the Goods and Services Tax (GST) front in the last two meetings of the GST Council (held on 22 and 23 December 2016, and 03 and 04 January 2017).

The draft Central GST, State GST and Integrated GST laws have been mostly finalised (except a few open areas) and have been sent to the Ministry of Law for review. Once the same are vetted legally, the laws would be placed before the GST Council for formal approval. A ‘rates committee’ has also been formed, which would be working concurrently to finalise the rate schedule, and the same would be considered by the Council.
As per reports, consensus has also been reached on the issue of the compensation to states, and the basic draft of the compensation law has also been approved by the GST Council. The Council had also discussed the list of goods to be covered for levy of cess, and other sources to fund the compensation for the states.
However, a few open points of consideration are still pending for agreement, which would be discussed in the next meeting of the GST Council on 16 January 2017. These include:

Dual control/ cross empowerment – Though no consensus has been reached on the much-debated issue on the administrative split, the Finance Minister highlighted that majority of the states had a positive attitude on the issue during the meeting. As per reports, the states continue to insist for complete control over businesses having an annual turnover below 1.5 crore. The issue is expected to be discussed in the next meeting.
Issue of jurisdictional power of states on territorial waters (12 nautical miles) – Another issue which has arisen is the definition of ‘state‘, and the power to levy taxes on supplies made from territorial waters.

The state governments are of the view that the power to levy taxes on such transactions is with them, while the centre is of the view that such power lies with the union. There is ongoing litigation on the matter in the current regime. The matter is pending before the Supreme Court as well. Since the issue involves interpretation of the Constitution of India on powers of the state and centre, the matter has been referred to the Ministry of Law for legal interpretation, and would be discussed in the next meeting.

In the meeting held on 03 January 2017, representations were made before the GST Council by various sectors (such as telecom, IT, banking, aviation etc) as well as by certain Ministries (such as Ministry of Commerce and Industry) on various key issues pertaining to such sectors. Demand for centralised registration for few sectors came up prominently in these representations.

Previous Meetings of GST Council 

Matter has been discussed in First Meeting OF GST Council:

  • Threshold Limit in GST: Rs20 lac & Rs10 Lac for North Eastern States
  • Empowerment of the States to collect both CGST and SGST including IGST, below the threshold of Rs.1.5 Crores. All VAT assessees up to Rs 1.5 Crore turnover will continue to be within the control of State GST authorities.
  • Similarly, all service tax assesseesup to Rs.1.5 Crores threshold will continue to remain with the Centre.
  • Assessees above Rs 1.5 Crore, there will be dual control of the Centre as well as the States.

Matter has been discussed in Second Meeting of GST Council:

GST levy on all exempted items and the States and the Centre would be paying the incentive or subsidy back to them after making a budget allocation

  • Both the Centre and the States are going to guillotine the present lists of exempted goods and services and subject them to the levy of GST and then make budget allocation for incentive or subsidy to be given to certain sectors and perhaps pay them in cash or some other form.
  • The Council approved the Draft GST Rules relating to the business processes such a