The GST Council (Article 279A) is the apex constitutional body that decides GST rates, exemptions, thresholds, and compliance rules. Chaired by the Union Finance Minister with all State FMs as members, it operates on consensus (no formal voting in 55+ meetings). All GST changes originate here.
| Role | Who | Voting Power |
|---|---|---|
| Chairperson | Union Finance Minister (currently Nirmala Sitharaman) | Casting vote in case of tie |
| Vice-Chairperson | Chosen from among State Finance Ministers (by election among members) | Regular voting rights + presides in absence of Chairperson |
| Member (Centre) | Union Minister of State for Finance (MoS Revenue) | 1/3 of total votes cast |
| Members (States/UTs) | Finance Minister of each State and UT with legislature (31 States + 2 UTs = 33 members) | 2/3 of total votes cast (collectively) |
Recommend rates of GST (CGST, SGST, IGST). Current slab structure: 0%, 5%, 12%, 18%, 28% + cess. Any rate change must be recommended by the Council before Centre/States can enact it.
Decide which goods/services are exempt from GST. Set turnover thresholds for registration (currently ₹40 lakh for goods, ₹20 lakh for services). Decide composition scheme eligibility and limits.
Recommend the model CGST, SGST, IGST laws for adoption by Parliament and State Legislatures. Any amendment to GST law must first be recommended by the Council.
Special rates for specific states (e.g., special category states with ₹10 lakh threshold). Additional cess for natural disasters. Compensation mechanism for revenue loss to states (expired June 2022, cess continues for loan repayment).
Resolve disputes between Centre-State or State-State on GST matters. Mechanism under Article 279A(11) — but no formal dispute resolution used yet (all decisions by consensus so far).
Recommend simplification of return filing, payment process, refund mechanism. Recent: quarterly return filing for small taxpayers (QRMP scheme), e-invoicing threshold reduction, input tax credit automation.
Threshold set at ₹20 lakh (₹10L for special states). Compensation cess structure decided.
Impact: Foundation of GST implementation.
GST rates finalized: 5%, 12%, 18%, 28% slabs. 1211 goods and 5 services classified.
Impact: Rate structure that launched with GST on July 1, 2017.
Major rate cuts: 178 items moved from 28% to 18%. Only sin goods and luxury items retained at 28%.
Impact: First major rate rationalization.
Corporate tax cut (not GST, but concurrent announcement). Hotel room rates rationalized.
Impact: Signaled government focus on demand stimulus.
Zomato/Swiggy to collect GST on food delivery (Section 9(5)). Correction in inverted duty structure for textiles and footwear.
Impact: Brought food delivery platforms into GST net.
GST on pre-packed/labelled food items. GoM report on rate rationalization. Compensation cess discussion.
Impact: Expanded GST base to packaged food items.
28% GST on online gaming, casinos, horse racing. Reduced GST on cancer drugs.
Impact: Controversial decision on online gaming tax.
Waiver of interest and penalty for demand notices (FY 2017-2020). Biometric Aadhaar authentication. Reduced TCS rate.
Impact: Major amnesty for pre-2020 demand notices.
Insurance GST reduction proposals. Rate rationalization GoM report discussion. EV battery GST.
Impact: Insurance and EV sectors received attention.
The GST Council is a constitutional body established under Article 279A of the Constitution of India. It is the supreme decision-making body for all GST matters — rates, exemptions, laws, thresholds, and compliance rules. Chaired by the Union Finance Minister, it includes finance ministers from all states and UTs with legislatures. Every decision on GST rates, new rules, or exemptions must first be recommended by the Council. It meets periodically (typically every 1-2 months) and decisions are taken by 3/4th majority.
Voting mechanism: Centre has 1/3 of total votes, all States collectively have 2/3 of votes. Any decision requires 3/4th majority of weighted votes cast. However: in practice, ALL decisions so far (55+ meetings) have been made by CONSENSUS — no formal voting has ever been needed. This consensus approach has been key to GST's cooperative federalism model. The Supreme Court (Mohit Minerals case, 2022) ruled that Council recommendations are not binding on states — but states have always followed them voluntarily.
There is no fixed schedule. The Council meets as needed, typically every 1-3 months. In the early years (2017-2019): meetings were very frequent (almost monthly) to address teething issues. Recent trend: quarterly meetings with special meetings for urgent matters. The 55th meeting was held in December 2024. Any member can request a special meeting. Virtual meetings are also conducted when needed (started during COVID-19).
Technically yes, after the Supreme Court's ruling in Union of India vs Mohit Minerals (May 2022). The Court held that GST Council recommendations are 'persuasive' but NOT binding on Parliament or State Legislatures. Each legislature retains sovereign power to enact or not enact the recommendations. However: in practice, all states have always followed Council recommendations. Deviating would create rate disparities and arbitrage — so consensus is maintained through negotiation within the Council.
Compensation Cess was introduced under the GST (Compensation to States) Act, 2017 to compensate states for revenue loss due to GST implementation. States were guaranteed 14% annual growth in revenue (over base year 2015-16). Cess levied on: luxury goods, sin goods (tobacco, aerated drinks, SUVs). Original period: 5 years (July 2017 – June 2022). Extended: cess continues beyond June 2022 to repay loans taken during COVID-19. The cess revenue goes to a Compensation Fund managed by the Centre.
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