In News: GST Council hikes tax on over two dozen goods and services from July 18.
- Tax hikes will kick in for over two dozen goods and services, ranging from unbranded food items, curd and butter milk to low-cost hotels, cheques and maps.
- At the same time, tax rates will be lowered for about half a dozen goods and services, including ropeways and truck rentals where fuel costs are included, and scrapped for products imported by private vendors for use by defence forces.
- In its 47th meeting, the GST Council discussed recommendations of four ministerial panels — on rate rationalisation, on movement of gold and precious stones, system reforms, and casinos, horse racing and online gaming.
- The GoM headed by Karnataka Chief Minister Basavaraj Bommai has been given a three-month extension for rate rationalisation measures including tweaking the tax slabs.
- On the valuation mechanism for taxing casinos, a Group of Ministers headed by Meghalaya Chief Minister Conrad Sangma has been asked to consider submissions of stakeholders again and submit its report by July 15.
- Modifications in GST’s IT systems to bolster compliance and crack down on tax evasion have been agreed, based on recommendations of a GoM led by Maharashtra Deputy Chief Minister Ajit Pawar.
- Suggestions by another GoM led by Kerala Finance Minister K.N. Balagopal on the movement of gold and precious stones were also accepted by the Council, enabling States to decide on the best way to implement an e-way bill system for intra-State movement of gold worth over ₹2 lakh.
- To resolve the long-pending issue of constituting a GST Appellate Tribunal, the Council has decided to form a fresh Group of Ministers whose report will be taken up at its next meeting
On GST Compensation extension
- At the meeting, over a dozen States wanted the GST compensation to continue for some more time.
- About 16-17 State representatives in the Council spoke on the GST compensation issues, of which about 12-13 sought an extension of the assured compensation period, while three-four spoke about the need to wean themselves away from the dependence on assured revenues.
- Union Finance Minister assured that issue to be discussed.
- The 101st Amendment Act of 2016 paved the way for the introduction of a new tax regime (GST) in the country
- The amendment provided for the establishment of a GST Council.
- The amendment inserted a new Article 279-A in the Constitution of India.
- This article empowered the President to constitute a GST Council by an order.
Composition of GST Council
- The Union Finance Minister of India will serve as the chairperson of this council.
- The respective states will nominate the State Finance Ministers/ or any other Minister as a member of the council.
- The Union Minister of State in charge of revenue or finance will also be a member of this council.
- The representatives of the states shall choose amongst themselves one “Vice-president”.
Working of the council
- The decisions of the Council are taken at its meetings.
- One-half of the total numbers of members of the Council is the quorum for conducting a meeting.
- Every decision of the Council is to be taken by a majority of not less than three-fourths of the weighted votes of the members present and voting at the meeting.
- The vote of the central government shall have a weightage of one-third of the total votes cast in the meeting.
- The votes of all the state governments combined shall have a weightage of two-thirds of the total votes cast in that meeting.
Functions of the Goods and Services Tax Council
The Council is required to make recommendations to the center and the states on the following matters:
- The taxes, cesses, and surcharges levied by the center, the states, and the local bodies would be merged in GST.
- The goods and services that may be subjected to GST or exempted from GST.
- Model GST Laws, principles of levy, apportionment of GST levied on supplies in the course of inter-state trade or commerce, and the principles that govern the place of supply.
- The threshold limit of turnover below which goods and services may be exempted from GST.
- The rates include floor rates with bands of GST.
- 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.
- Any other matter relating to GST, as the Council may decide.
- In addition, the council shall also recommend the date on which the GST may be levied on petroleum crude, high-speed diesel, petrol, natural gas, and aviation turbine fuel.
Source: The Hindu
Previous Year Questions
Q.1) Consider the following items: (2018)
- Cereal grains hulled
- Chicken eggs cooked
- Fish processed and canned
- Newspapers containing advertising material
Which of the above items is/are exempted under GST (Good and Services Tax)?
- 1 only
- 2 and 3 only
- 1, 2 and 4 only
- 1, 2, 3 and 4