What is the Goods and Services Tax (GST) Council?

What Exactly is the Goods and Services Tax (GST)?

 

• It is an indirect tax (not directly paid by customers to the government), that came into effect from 1 July 2017 through the implementation of the 101st Amendment to the Constitution of India by the Indian government.
• It has actually replaced various indirect taxes such as - service taxes, VAT, excise and others in the country.
• It is levied on the manufacturer or seller of goods and the providers of services.
• Types of GST: State Goods and Services Tax (SGST), Central Goods and Services Tax (CGST) and the Integrated Goods and Services Tax (IGST, on exports and imports). 

 

What is the GST Council?

• Article 279A of the Indian Constitution gives power to the President of India to constitute a joint forum of the Centre and States called the GST Council, consisting of the -
• Union Finance Minister - Chairperson
• The Union Minister of State, in-charge of Revenue of finance - Member
• The Minister in-charge of finance or taxation or any other Minister nominated by each State Government - Members
• The GST Council is an apex committee to modify, reconcile or to make recommendations to the Union and the States on GST, like the goods and services that may be subjected or exempted from GST, model GST laws, etc.
• Decisions in the GST Council are taken by a majority of not less than three-fourth of weighted votes cast.
• Centre has one-third weightage of the total votes cast and all the states taken together have two-third of weightage of the total votes cast.
• All decisions taken by the GST Council have been arrived at through consensus.

 

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Q1) What is an Indirect Tax?

An indirect tax is collected by one entity in the supply chain, such as a manufacturer or retailer, and paid to the government; however, the tax is passed onto the consumer by the manufacturer or retailer as part of the purchase price of a good or service. The consumer is ultimately paying the tax by paying more for the product.

Source: GST Council to discuss scope of budgetary support for units in hilly states