GST Council

Why in News?

The GST Council is set to meet in July 2025 to discuss reducing items under the 12% GST slab, possibly removing it entirely. The agenda includes tax relief on intermediate services, potentially benefitting the service industry significantly.

Description:

1. Constitutional Body:
   1. Established under Article 279A of the Indian Constitution.
2. Constitution of Council:
   1. Chairperson: Union Finance Minister.
   1. Members:
      1. Union Minister of State for Revenue/Finance.
      1. Finance/Taxation Ministers of all States (or nominated State Ministers).
3. Purpose & Powers:
   1. Makes recommendations on implementation and administration of GST.
   1. Covers issues like:
      1. GST lawsPlace of Supply principlesThreshold limitsGST rates and exemptionsSpecial provisions for States
      1. Disaster cess/special rates
4. Decision-making:
   1. Quorum: 50% of total members.
   1. Voting Rule:
      1. Decision needs 3/4th majority of weighted votes.
      1. Central Government vote weight = 1/3rd.
      1. All State Governments combined = 2/3rd.
5. Secretariat:
   1. Managed by officers from Centre and States (on deputation).
   1. Revenue Secretary of India is Ex-Officio Secretary.
   1. Secretariat expenses are fully borne by the Central Government.
   1. Office located in New Delhi.

Goods and Services Tax:

1. Indirect Tax Reform:
   1. Replaced multiple taxes (excise, VAT, service tax etc.).
2. Enactment:
   1. GST Act passed on 29th March 2017, implemented from 1st July 2017.
3. Nature:
   1. Comprehensive, multi-stage, destination-based tax.
   1. Levied on supply of goods and services.
4. Types:
   1. Intra-state supply:
      1. Central GST (CGST) + State GST (SGST).
   1. Inter-state supply:
      1. Integrated GST (IGST).
5. Input Tax Credit:
   1. Tax paid at each stage is creditable at the next stage.
   1. Ensures tax is paid only on value addition.
6. Consumer Impact:
   1. Final burden is on the consumer, but businesses collect and remit the tax.

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