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What's the article about?
- It analyses the decisions taken at the recently conducted meeting of the Goods and Services Tax (GST) Council.
Relevance:
- GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment; Government Budgeting;
- prelims
Context:
- After a gap of six months, a GST Council meeting took place.Some important decisions were made.
- The Centre will introduce these changes in the Finance Bill of 2023-24.
- State legislatures will have to amend their respective GST laws too.
What is the Goods and Services Tax (GST) Council?
- The GST Council is a Constitutional Body set up as per the provisions of the Article 279A (1).
- It is a joint forum of the Centre and the states.
- Members:
- Union Finance Minister – Chairperson
- The Union Minister of State, in-charge of Revenue of finance – Member
- The Minister In-charge of finance or taxation or any other Minister nominated by each State Government – Members
- Function: Council makes recommendations to the Union and the States on important issues related to GST.
- GST was introduced through the 101st Constitution Amendment Act, 2016.
What are key decisions taken at a recent meeting?
- Certain offences by taxpayers are decriminalised.
- Also the ₹2 crore threshold limit was set for initiating prosecutions, except in cases involving fake invoices.
- A 5% levy on husk of pulses used as a cattle feed input was scrapped.
- The tax rate on items such as Fryums and Sports Utility Vehicles was ‘clarified’.
Analysis of recent meeting:
- Decisions to decriminalise certain offences and raising the limit to initiate prosecutions are positive steps.
- They aimed at bringing transparency into the overall tax administration process and thus reduced chances of tax payer harassment.
- But the one major issue was sidelined by the GST Council – the long-pending move to set up appellate tribunals.
- Due to absence of such special tribunals, High Courts are burdened with GST related cases. The HC certainly lacks the subject matter experts in this area, thus cases take time to get resolved.
- Thus setting a special tribunal with a specialised workforce is certainly the need of the hour.
- Furthermore, a group of ministers had submitted a report with recommendations on the functioning of these tribunals to the Council.
- Reasons given for not taking up this issue was given that State Finance Ministers were busy. Obviously this is not a valid argument.
Way Forward:
- Such casual approach of some States towards the apex GST governance mechanism, not only means delays in efforts to plug tax leakages in the tobacco and Gutkha business, or fix the tax for the booming online gaming business but also bodes ill for the effectiveness of the Council.
- Taxpayers deserve more than such ad hoc, half-hearted, half-day deliberations with insipid outcomes.
