What Is The GST Council?
In accordance with Article 279A(1) of the amended constitution (by the 101st amendment act), the President had to constitute the members of GST council within 60 days of the commencement of Article 279A.
The GST council is a joint forum of centre and state governments and the following are required to be the members of the council:
- Chairperson: Union Finance Minister
- Member: The Union Minister of state In charge of revenue of finance
- Other members: The minister In –charge of finance or taxation or any other minister nominated by every state government
According to article 279A (4), the council makes recommendations to the union and state government on issues pertaining to the GST. Some of the areas in which the advice could be given include:
- Goods and services that could be exempted from GST
- Threshold limit
- Model GST laws
- GST rates (floor rates with bands)
- Special rates in case of extreme circumstances like natural calamity
- Rules related to the place of supply
Some of the important decisions taken by the GST council so far include:
- Timetable for the implementation of GST
- Rules of conduct in the GST council
- Threshold limit for GST exemption
- Compensation for 5 years worth of loss of revenue for the states
- Draft GST rules related to registration, return, refund, invoicing, input tax credit transitional provisions, composition, invoice
- Four slabs tax rate (5%, 12%, 18% and 28%)
- Administrative division of taxpayers
- Entities exempted from the existing tax incentive scheme will pay tax in the GST scheme
The IT system of the GST portal is handled by the Goods and Service Tax Network (GSTN) which is a non-profit, non-government organization. The government uses the GST portal to track all the financial transactions and to ensure taxpayers have access to all the services including registration, tax filing and maintenance of all tax details.
On the advice of the GST council, GSTN had initially identified eight vendors to provide GST billing software for free to its customers
51% of the GSTN is owned by private entities ( banks and finance companies) and the rest is owned by the government.
Some of the key functions of GSTN handles through the maintenance of the portal include:
- Various Returns
- Payments and refunds
What are some of the most important features of GSTN?
- It is a trusted national information utility (NIU) that delivers efficient IT infrastructure for the proper functioning of GST in India
- GSTN plays a crucial role in handling complex transactions. Since GST is a destination-based tax it requires a lot of adjustment for intrastate trade both at the centre and state level. This may add to the complexity of the whole process due to the large volume of transactions
- Security of information and data is essential. Hence the government decided to keep strategic control over the GSTN so that it can guarantee the confidentiality and security of the information of all the taxpayers.
The state and central government will share the user charges in equal proportions on behalf of all users. The state share is then assigned to the state in accordance with the number of taxpayers in the state.