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Mahesh

24/06/24 11:06 AM IST

GST Council

In News
  • The 53rd Goods and Services Tax (GST) Council met in Delhi under the Chairpersonship of Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs recently.
GST Council
  • The GST regime came into force after the Constitutional (122nd Amendment) Bill was passed by both Houses of Parliament in 2016.
  • More than 15 Indian states then ratified it in their state Assemblies, after which then-President Pranab Mukherjee gave his assent.
  • It came into effect in 2017 and was billed as an attempt to simplify the existing tax structure in India, where both the Centre and states levied multiple taxes, and to make it uniform.
  • The President set up the GST Council as a joint forum of the Centre and the states, under Article 279A (1) of the amended Constitution.
  • It said that members of the Council include the Union Finance Minister (chairperson), and the Union Minister of State (Finance) from the Centre. Each state can nominate a minister in charge, of finance or taxation or any other minister, as a member.
Why was GST council set up?
  • According to Article 279, the council is meant to “make recommendations to the Union and the states on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws”.
  • It also decides on various rate slabs of GST, whether they need to be modified for certain product categories, and so on.
  • The GST Council is more than administrative break from the past.
  • It is a bold experiment in pooling Union and State sovereignty that has changed the concept and contours of federalism in India.”
Supreme Court Judgements
  • In 2022, the Supreme Court stated that the recommendations of the GST Council were not binding, in a judgment (Union of India and Anr versus M/s Mohit Minerals Through Director).
  • The court said Article 246A of the Constitution gives both Parliament and state legislatures “simultaneous” power to legislate on GST and recommendations of the Council “are the product of a collaborative dialogue involving the Union and States”.
  • The court pointed out that Article 246A of the Constitution stipulates that both Parliament and state legislatures have “simultaneous” power to legislate on GST — and recommendations of the Council “are the product of a collaborative dialogue involving the Union and States”.
  • (Article 246A (“Special provision with respect to goods and services tax”) says: “(1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.”)
  • Further, the court said the GST Council has an “unequal voting structure where the states collectively have a two-third voting share and the Union has a one-third voting share”.
  • Some states, such as Kerala and Tamil Nadu, hailed the judgment, believing that states could now be more flexible in accepting the recommendations as suited to them.
Source- Indian Express

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