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GST Council 49th Meet

Context:

Recently, the Goods and Services Tax (GST) Council in its 49th Meeting has reached consensus on the constitution of the GST Appellate Tribunal to resolve the rising number of disputes under the old indirect tax regime.

Relevance:

GS III- Indian Economy

Dimensions of the Article:

  1. What is GST?
  2. GST Council
  3. What has changed this time?

The key highlights of the GST meeting are:

  • GST Appellate Tribunal: The council has approved the creation of a national tribunal mechanism with state benches for the redressal of disputes. The Tribunal will resolve the rising number of disputes under the GST regime that are now clogging High Courts and other judicial fora.
  • Cleared Pending Compensation Dues: The council has cleared the balance of Rs 16,982 crore (for June 2022). It has also finalized GST compensation of Rs 16,524 crore to six states/UTs including, Delhi, Karnataka, Odisha, Puducherry, Tamil Nadu, and Telangana.
  • Lower Penal Charges: The council has approved lower penal charges for delayed filing of annual returns by businesses with a turnover of up to Rs 20 crore a year. The council has also approved an Amnesty Scheme for taxpayers unable to file three statutory returns, that entail conditional waivers or reductions in late fees for such filings.
  • Rate Changes: The GST rate on several items has been changed, such as pencil sharpeners, rab (liquid jaggery). The Council also decided to extend the GST exemption to educational institutions and central and state educational boards from conducting entrance examinations through any authority, including the National Testing Agency.
  • Plugging Tax Evasion: The Council has decided to switch the compensation cess levied on pan masala and gutkha commodities from an ad valorem basis to a specific tax-based levy. The Council also mandated that exports only be allowed against letters of undertaking assuring of GST compliance.

What is GST?

GST is a destination-based indirect tax and is levied at the final consumption point. Under it, the final consumer of the goods and services bear the tax charged in the supply chain. GST is a transparent and fair system that prevents black money and corruption and promotes new governance culture.

GST Act
  • Goods and Services Tax (GST) Act came into effect in 2017.
  • Goods and Services Tax (GST) was introduced by the Government of India to boost the economic growth of India. GST is considered to be the biggest taxation reform in the history of the Indian economy.
  • The power to make any changes in the GST law is in the hands of the GST Council. GST Council is headed by the Finance Minister. One hundred and first amendment act, 2016 introduced the GST in India in July 2017.

GST Council

  • Goods & Services Tax Council is a constitutional body for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
  • 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 Constitution (One Hundred and Twenty-Second Amendment) Bill, 2016, for the introduction of Goods and Services Tax in the country was introduced in the Parliament and passed by Rajya Sabha on 3rd August 2016 and by Lok Sabha on 8th August 2016.
  • GST Council is an apex member committee to modify, reconcile or procure any law or regulation based on the context of goods and services tax in India.
  • The GST council is responsible for any revision or enactment of rule or any rate changes of the goods and services in India.
  • The council contains the following members:
    • Union Finance Minister (as chairperson)
    • Union Minister of States in charge of revenue or finance (as members)
    • The ministers of states in charge of finance or taxation or other ministers as nominated by each state’s government (as members).

Matters on which GST Council makes recommendations

  • 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;
  • Any other matter relating to the goods and services tax, as the Council may decide.

-Source: Indian Express


February 2024
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