About GST Council

• Goods & Services Tax Council is a constitutional body under Article 279A, for making recommendations to the Union and State Government on issues related to Goods and Service Tax.
• The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.

Mandate of GST Council

• The Goods and Services Tax Council shall make recommendations to the Union and the States on—
  • the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the goods and services tax;
  • the goods and services that may be subjected to, or exempted from the goods and services tax;
  • model Goods and Services Tax Laws, principles of levy, apportionment of Goods and Services Tax levied on supplies in the course of inter-State trade or commerce under article 269A and the principles that govern the place of supply;
  • the threshold limit of turnover below which goods and services may be exempted from goods and services tax;
  • the rates including floor rates with bands of goods and services tax;
  • any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;
  • special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and
  • any other matter relating to the goods and services tax, as the Council may decide.
• The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.
• While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonized structure of goods and services tax and for the development of a harmonized national market for goods and services.
• Quorum: One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
• Voting share: Every decision of the Goods and Services Tax Council shall be taken at a meeting, by a majority of not less than three-fourths of the weighted votes of the members present and voting, in accordance with the following principles, namely: —
  • the vote of the Central Government shall have a weightage of one third of the total votes cast, and
  • the votes of all the State Governments taken together shall have a weightage of two-thirds of the total votes cast, in that meeting.
• No act or proceedings of the Goods and Services Tax Council shall be invalid merely by reason of—
  • any vacancy in, or any defect in, the constitution of the Council; or
  • any defect in the appointment of a person as a Member of the Council; or
  • any procedural irregularity of the Council not affecting the merits of the case.
• Dispute adjudication: The Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute
  • between the Government of India and one or more States; or
  • between the Government of India and any State or States on one side and one or more other States on the other side; or
  • between two or more States, arising out of the recommendations of the Council or implementation thereof.

Why in the news?

• Several States have been urging the Centre to extend emergency fiscal support and release past GST compensation dues enshrined in the GST law to cope up with the pandemic induced economic crisis.

GST compensation:

• Under the GST compensation Act 2017, states are guaranteed full compensation for any revenue loss for the first five years after the introduction of the GST in July 2017.
• For the purpose of calculating the compensation amount in any financial year, year 2015-16 will be assumed to be the base year, from which revenue will be projected.  The growth rate of revenue for a state during the five-year period is assumed to be 14% per annum. 
• Any shortfall has to be compensated from the receipts of Compensation Cess imposed on selected commodities that attract a GST of 28 per cent .

References:

https://economictimes.indiatimes.com/news/economy/finance/centre-gives-15340-crore-as-gst-compensation-to-states/articleshow/75855070.cms?from=mdr#:~:text=Centre%20gives%20Rs%2015%2C340%20crore%20as%20GST%20compensation%20to%20states,-ET%20Bureau%20%7C%20Updated&text=Under%20GST%20law%2C%20states%20are,(GST)%20in%20July%202017.

http://gstcouncil.gov.in/gst-council#:~:text=Goods%20%26%20Services%20Tax%20Council%20is,to%20Goods%20and%20Service%20Tax.&text=As%20per%20Article%20279A%20(1,the%20commencement%20of%20Article%20279A.

https://www.thehindu.com/opinion/editorial/behind-the-curve-the-hindu-editorial-on-gst-compensation-to-states/article31828367.ece