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What Role Does the Goods and Service Tax “GST” Council Play?

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While we know the GST bill is and what it entails, it is surprising to see that the role of the GST Council is still a mystery to most. In fact, it is shocking to note that a lot of people don’t even know of the existence of the council.

Ever wondered how the GST functions? How it is modified, amended and improved on a rolling basis? Well, it is the doing of the GST council. From deciding tax rates to designing the GST bill format, the GST Council makes sure that the policy is well implemented and keeps on adapting to changing times.

Role Of The GST Council

The GST council consists of the Union Finance Minister, currently Nirmala Sitharaman, as the presiding chairman of the Council. It also consists of Minister of State (Revenue) and State Finance Ministers. The role of the GST Council are as follows:

1. Regulating and remodeling laws

As mentioned before, GST, a fairly new policy might require regular vigilance and remodeling. It is the duty of the GST council to look into changing policies and create tax laws in accordance with the needs of the hour. They can suggest policies to official legislation on a rolling basis, making sure that their policies are legitimate and positively affect the economy.

2. Coordination of State and Center

By the very nature of the Council, all the states of the country are represented in the council. The recommendations of all the states are taken into account so that the states can have specific tax laws and actually have a say in the council. The Council harmonizes these opinions so that a just policy can be formulated. Without this role, a center-state dispute would be unavoidable and the states might hold a grudge against the center.

3. Decide on taxable items

The GST is not applicable to a lot of items that are considered to be daily needs. Some of these items include vegetables and fruits. The goods that are usually exempt are not luxury goods and might even be under a subsidy program. It is upon the GST Council to decide whether a good is applicable to be charged with GST or not.

4. Decide a lower ceiling

At what amount is GST applicable is decided by the GST council. The Council decides on when tax is applicable and at what rate for a given income. A threshold is presented so that people whose turnover is low don’t have to pay GST, making sure that people aren’t unfairly taxed so that the people who earn more can contribute more towards the country. Sectors like Real Estate are seeing a huge impact of GST on their market.

5. Design special provisions

For states that require special laws and provisions, especially in regards to taxation, the GST Council is responsible for creating tax laws that are suitable for the needs of these states. These states are usually states that are under some sort of unrest and therefore, can’t properly comply with the tax laws that are implied in other states. Some of these states include Uttarakhand and Himachal Pradesh.

6. Dates for new levies

When the GST council decides that new laws must be created for specific reasons, it is to also decide when these laws are to be implemented. As and when a policy is recommended, it is recommended with an implementation date, so that plans are executed accordingly. Since the GST Council has better insight on when the policies can become legitimate and useful for the public, it is their duty to provide a tentative date of implementation.

7. Relax taxes for unavoidable calamities

The GST Council has the right and duty to relax taxes on states when they suffer from a natural disaster, for example, earthquakes and tsunamis. This role makes sure that the people who are already suffering from economic losses don’t have to bear the burden of further taxation. While there is no explicit section that mentions it, the GST Council can relax the whole of taxes for a few months in disaster-ridden areas.

Concluding Remarks

The GST, being a fairly new taxation policy, needs to be fully figured out, both by the government and the people. While the people can sit back and slowly try to understand its changing currents and trends, the GST Council is a Constitutional body placed to understand public trends immediately and design policies according to their requirements.

GST is one of the biggest tax reforms that India has ever seen and out of all of the roles stated above, the most important role of the GST Council is to adapt and improvise with time, so that the policy is suitable for a growing economy like India. The GST Council has the burden of making sure that the people of the country are satisfied, while also keeping on track the income of the government.