News Excerpt:
On June 22, the 53rd GST Council meeting took place in Delhi, chaired by the Union Minister for Finance.
More about News: The Council recommended taxes on items such as milk cans and solar cookers and provided some relief for students in specific types of rented accommodations. Additionally, the GST on cartons was reduced from 18% to 12%, offering relief to apple farmers in Himachal Pradesh and Jammu and Kashmir.
The Origins of the GST regime
- The GST regime was introduced after the Constitutional (122nd Amendment) Bill was passed by both Houses of Parliament in 2016.
- Following ratification by more than 15 state Assemblies, the then President gave his assent and it was enacted as the 101st Constitution Amendment Act, 2016.
- The GST was implemented in 2017 to simplify India's complex tax structure, where both the Centre and states previously levied multiple taxes.
Structure of the GST Council
- The President established the GST Council as a joint forum of the Centre and the states under Article 279A (1) of the amended Constitution.
- The GST Council is tasked with making recommendations to the Union and states on key issues related to the Goods and Services Tax (GST).
- The Council includes the Union Finance Minister as the chairperson, the Union Minister of State (Finance), and a minister nominated by each state who is in charge of finance, taxation, or any other relevant portfolio.
Purpose of the GST Council
- According to Article 279, the Council is responsible for making recommendations to the Union and states on essential GST issues such as inclusion or exclusion of commodities in the GST regime, model GST laws, and various GST rate slabs.
Judicial Review of GST Council
- In 2022, the Supreme Court ruled that the recommendations of the GST Council are not binding.
- The judgment (Union of India versus M/s Mohit Minerals) clarified that Article 246A of the Constitution grants both Parliament and state legislatures simultaneous power to legislate on GST.
- Therefore, the Council's recommendations are the result of collaborative dialogue between the Union and states.
- The Court also highlighted that the GST Council has an unequal voting structure. States collectively hold a two-thirds voting share, while the Union holds one-third.
- Some states, like Kerala and Tamil Nadu, welcomed this judgment, seeing it as an opportunity for states to have more flexibility in accepting the Council's recommendations as per their specific needs.
