Why in News?
- The Finance Ministry said that the GST collections rose 12 per cent to over Rs 1.61 lakh crore in June, 2023.
What’s in Today’s Article?
- About GST (Meaning, Objectives, Tax Slabs, etc.)
- About GST Council (Formation, Roles, Composition, Voting, etc.)
- News Summary
About Goods and Services Tax (GST):
- Goods and Services Tax is a single indirect tax which has replaced multiple indirect taxes in India such as the excise duty, VAT, services tax, etc.
- GST is levied on the supply of goods and services in India. It came into effect from July 2017.
- Objective: To remove the ambiguity and bring equality in the prices of products across the country.
- It eventually aspires to reduce the manufacturing cost of businesses and create a unified and streamlined market where the cost of goods and services will be more even across the country.
GST Rate Slabs:
- The rates are notified on the recommendation of the GST Council.
- GST rates have been structured in a way that essential services and food items are placed in the lower tax brackets, while luxury services and products have been placed in the higher tax bracket.
- The GST council has fitted over 1300 goods and 500 services under four tax slabs of 5%, 12%, 18% and 28% under GST.
- This is aside the rate on gold that is kept at 3% and rough precious and semi-precious stones that are placed at a special rate of 0.25% under GST.
- 7% of goods and services fall under exempted GST Rate Slab i.e. 0% tax.
- Some of these that are of regular consumption include fresh fruits and vegetables, milk, butter milk, curd, natural honey, flour, etc.
About GST Council:
- Goods and Services Tax (GST) Council is a Constitutional body formed under Article 279A of the Constitution.
- It was introduced by the 101st Constitutional Amendment Act, 2016.
- Objective: To regulate and direct each and every step for the implementation of goods and service tax in the nation.
Role of GST Council:
- The GST Council makes recommendations to the centre and the states on the following matters:
- Taxes, cess, and surcharge levied by the centre, states and local bodies which might be incorporated under GST.
- The goods and services that are subjected to or exempted from GST.
- The model of GST laws and allocation of Integrated Goods & Services Tax (IGST) and the principles governing the place of supply.
- Special rates for a specific period to raise additional resources during a natural calamity.
- The date on which GST is to be levied on high-speed diesel, petroleum crude, natural gas, and aviation turbine fuel.
- The maximum limit of turnover below which goods and services might be exempted from GST.
- The rates including GST bands of floor rates.
- Any other GST related concern as deemed by the Council.
Composition of GST Council:
- The GST Council consists of the following members:
- Union Finance Minister (Chairperson)
- Union Minister of State in-charge of Revenue and Finance
- Ministers in-charge of Finance or Taxation of all the States
Decision-making of GST Council:
- GST Council is required to meet at least once in three months.
- Every decision of the GST Council has to be taken by a majority of not less than three-fourths of the weighted votes of the members present.
- The vote of the central government has a weightage of one-third of the total votes cast, and
- The votes of all the state governments taken together have a weightage of two-thirds of the total votes cast in that meeting.
News Summary:
- The Finance Ministry said that the GST collections rose 12 per cent to over Rs 1.61 lakh crore in June, 2023.
- The gross GST collection has crossed Rs 1.60 lakh crore mark for the fourth time since the roll-out of the indirect tax regime six years ago on July 1, 2017.
- The revenues for June 2023 are 12 per cent higher than the GST revenues in the same month last year.
- The revenues had touched a record high of Rs 1.87 lakh crore in April, 2023.
