2nd April 2017
The revamp in the Indian Taxation system is actioned to frame a stronger economy. The fact that India is world’s fastest growing economy can be determined by its new age tax reforms and budding business opportunities across varied sectors.
What was earlier known as the agriculture dominant country is now steadily changing itself to be a hub of new business opportunities across all sectors. This change can be credited to the initiative taken by the government to pass the constitutional amendment and pass it as GST.
GST promises to surge the GDP of the country by more than a few percentage and also contribute to towards making the country a place for conducting organised businesses in all sectors. Fragmented market places that stood divided by borders will now unite to serve a larger customer base irrespective of its geographical location. Interstate taxes will now be eased or erased to promote businesses carried out on simpler norms.
The cost of logistics and inventory will also have huge fall as the time consumed at interstate borders will now be shortened. To hasten the process government has also proposed to introduce online checking of goods. This will promote efficiency in business and timely dispatch and delivery of goods. The integration of taxes of both state and central is done to form India as one organised market place conducting businesses seamlessly.
With so much change to bring about, a question arises who is going to control this system?
All about the GST council
GST will be controlled by a body called Goods And Services Tax Council. This council is the supreme body that is created to make decisions regarding policies with regards to GST. GSTC will be the authority to take calls on the implementations of GST, taking into account the exemptions, tax rates and tax credits.
This council will be headed by the Union Finance Minister who will be the designated Chairperson of the council. Other members will be represented by the Union minister of State in charge of Revenue or Finance of the Central Government. Alongside with the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government are members of the GSTC.
Since GST council is the key deciding body making decisions regarding GST, the council will seat representatives from both central and the state government to make decisions on a holistic ground.
With accordance to the constitution, all decisions made by the body should be in agreement to both the state and the central government, without each other’s concurrence this decision will be considered null and void. This clause is drafted in order to ensure cooperative unionism, as it shifts the power to the states to decide the effect of indirect taxes in the country.
Most of the indirect taxes such as excise duty, service tax, value-added tax, entertainment tax, luxury tax and octroi is set to be absorbed by the GST. Which indicates that the GST council will now oversee the tax collection which currently accounts to Rs.13 trillion as per an estimate calculation figure stated by the amount collected on goods and services as tax.
As soon as the GST bill is given a green signal by the parliament and acknowledged by the majority of the states it will be rolled out as one of the most powerful amendment.
The GST council has the last say in all the decisions pertaining the frame work of GST.
One of the major functions of the GST councils is to freeze the tax rate that will be levied under GST and will also decide grounds on which tax will be exempted for the same.
GST council will also function to provide recommendations on the taxes, cesses and surcharges that will be absorbed by the GST. The decision entailing the inclusion of petroleum and petroleum products under the GST horizon will also be taken by the council.
The GST council is manifested with the power to decide which goods and services will be tax protected / exempted in interest of the common man.
As mentioned earlier the GST council is framed to promote federalism. Any decision taken by the council needs a minimum of three-fourth of the majority in agreement or disagreement of the decision. While the central government is only one third of the council the states enjoy a major share of two thirds making majority agreement important for the council to make decisions based on common grounds.
Any disputes arising between the interest of states and the centre will be resolved by the council as it has the upper hand and a final say on the decision.
In conclusion, GST council is one of a kind. This is going to be one of the most powerful and influential federal body framing the economy of the country. This council is manifested to tune the economy and administer the taxes across the nation. In some instances superseding the central government.
Apart from what we call the power to make a decision the council will also act as a judge and a peace making party between two states or the centre and the state during conflict of interest.
2017 © Monetic Corp Consultants Private Limited - U74999DL2013PTC261819
Download GST E-book, An introductory guide for Goods and Service Tax by Registrationwala.
Like every GST liable business, you'll also need a GST software. Registrationwala has come up with a return preparing and filing software GST Tool.
To schedule a online demo, submit your details.