Article 279A: Goods and Services Tax Council
Article 279A of Indian Constitution
Original text:
(1) The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and First Amendment) Act, 2016, by order, constitute a Council to be called the Goods and Services Tax Council.
(2) The Goods and Services Tax Council shall consist of the following members, namely: —
- the Union Finance Minister — Chairperson;
- the Union Minister of State in charge of Revenue or Finance — Member;
- the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government — Member.
(3) The Members of the Goods and Services Tax Council referred to in sub-clause (c) of clause (2) shall, as soon as may be, choose one amongst themselves to be the Vice-Chairperson of the Council for such period as they may decide.
(4) 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.
(5) 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.
(6) 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.
(7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings.
(8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions.
(9) 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.
(10) 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.
(11) 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.
Article 279A of Indian Constitution Explanation:
The President shall, by order, establish a council to be known as the Goods and Services Tax Council within sixty days of the Constitution (One Hundred and First Amendment) Act, 2016 taking effect.
Composition of the GST Council
Article 279A(2) of the constitution mentions about the composition of the Goods and Services Tax Council. The Council is a joint forum of the Union and the states. It consists of the following members:
- Chairperson: The Union Finance Minister
- Members:
- The Union Minister of State is in charge of revenue or finance.
- Each state can nominate the Minister-in-charge of Finance or Taxation
- Vice-Chairperson: The members of the council have to choose one amongst themselves. The members can also fix his term.
- The chairperson of the Central Board of Excise and Customs (CBEC) can be invited as a permanent invitee (non-voting) by the Union Cabinet Ministers to all proceedings of the Council.
Functions of GST Council:
It is the responsibility of the Council to make recommendations to the Union and the states on the following matters:
- Taxes subsumed: the taxes, surcharges, and cesses levied by the Union, the states and the local bodies that would get subsumed in the goods and services tax.
- GST Applicability: The goods and services on which GST is applicable or exempted from GST.
- Model GST laws, principles of levy, distribution of goods and services tax levied on supplies in the course of inter-state or commerce and principles that govern the place of supply.
- Deciding threshold limit: The upper limit of turnover below which goods and services may be exempted from GST.
- Deciding Rates: The Council decides rates, including floor rates with bands of GST.
Floor Rate: It is a minimum rate of tax that has been proposed to ensure that the GST rate does not fall below a certain level.
Band: it is a range of GST rates over the floor rate within central goods and services tax (CGST) or State Goods and services tax (SGST) that may be levied.
- Apply other rates: Any other special rate for a particular period to raise extra resources during natural calamities or disasters.
- Making Special Provisions: Making special provisions for the following states: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Nagaland, Sikkim, Tripura, Mizoram, Uttarakhand, and Himachal Pradesh.
- Any other matter relating to GST, as the Council may determine.
- Recommends date: It is the responsibility of the Council to determine the date on which the GST may be levied on motor spirit(petrol), petroleum crude, high-speed diesel, natural gas, and aviation turbine fuel.
Other functions of GST Council:
- Establish a mechanism for dispute resolution: The Council shall establish a mechanism to adjudicate upon the dispute when there is a dispute with respect to its recommendations or their implementation.
- When there is a dispute relating to its recommendations or their implementation, the Council shall establish a mechanism to adjudicate upon the dispute:
- Between the Centre and one or more states; or
- Between the Centre and any state or states on one side and one or more other states on the other side, or
- Between two or more states.
- Recommend compensation: It is the responsibility of the Council to recommend compensation to the states for loss of revenue arising on account of the introduction of GST for a period of 5 years. On the basis of this recommendation, the parliament determines the compensation. Accordingly, the parliament enacted the law in 2017.
Working of GST Council:
The Council’s decisions are taken collectively in accordance with a prescribed voting pattern, and every state government has an equal voting right. All the decisions of the Council are taken at its meetings.
- Quorum: At least one-half of the total number of members of the Council shall be present in a meeting.
- Majority: the majority of not less than three-fourths (3/4th) of the weighted votes of the members present and voting to take any decision of the Council.
- The decision in the Council is to be taken according to the following principles:
- Out of the total votes cast, the union government shall have weightage of one-third votes in any meeting of the Council.
- Out of the total votes cast, the state government shall have a weightage of two-thirds votes in any meeting of the Council.
- Any act or proceedings of the Council will not become invalid on the following grounds:
- If there is any vacancy or defect in the constitution of the Council
- If there is any flaw in the appointment of a person as a member of the Council
- If there is any irregularity due to the procedure of the Council, it does not affect the merit of the case.
For further reference:
Read the Constitution of India.
Read the Good and Services Tax Council.
