GST Council, Constitution and Decision Making

The GST council, the key decision-making body that will take all important decisions regarding the GST, will have representation from the central government as well as all the state governments.

A GST Council has been constituted under Article 279A of the Constitution, comprising the Union Finance Minister (who will be the chairman of the Council), the Minister of Revenue and the State Finance or Taxation Ministers to make recommendations to the Union and the States on –

1. the taxes, cesses and surcharges levied by the Union, the States and the local bodies which may be subsumed in the GST;

2. the goods and services that may be subjected to, or exempted from the GST;

3. model GST Laws, principles of levy, apportionment of IGST & Principals of that govern the place of supply;

4. the threshold limit of turnover below which goods and services may be exempted from GST;

5. the rates including floor rates with bands of GST;

6. any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster;

7. special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and

8. any other matter relating to the GST, as the Council may decide.

Section 2(36) of Central Goods & Services Taxes Act, 2017 defines “Council” as the Goods and Services Tax Council established under article 279A of the Constitution.

The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States.

Now, as various provisions of GST are to be enacted on the recommendations of the GST Council which itself is a body of the Centre and States represented by their Finance Ministers, therefore, the Centre & the States cannot take any different stand while enacting the provisions of GST Laws.

Nature of GST Council

The GST Council will be quasi-legislative –cum – administrative body because it functions both legislative as well as administrative duties as assigned by the Parliament to it.

Constitution of GST Council

According to the Article 279A, it is on the part of Prime Minister to give the order to constitute the council of GST within the 60 days from the 12th September 2016 which is already notified by the Government.

Following are the designated personnels, who will form the GST Council together:-

> The Union Finance Minister who will be the CHAIRMAN of the council;

> The Union Minister of State in charge of Revenue or Finance who will be the MEMBER of council;

> ONE MEMBER from each state who is Minister in charge of Finance or Taxation or any other Minister, and anyone of them will be VICE CHAIRMAN of the GST Council who will be mutually elected by them.


> The Secretary of Revenue Department will work as EX-Officio Secretary to the GST Council,

> The Chairperson of Central Board of Excise and Customs will be the permanent invitee in all the proceedings of the GST Council who will not have the voting rights.

Quorum and Decision Making of GST Council

1. For a valid meeting of the members of GST Council, at least 50 percent of the total number of the member should be present at the meeting.

2. Every Decision made during the meeting should be supported by at least 75 percent majority of the weighted votes of the members who are present and voting at the meeting. In “article 279A” a principle is there which divides the total weighted vote cast between Central Government and State Government :-

> The vote of Central Government shall have the weighted of one-third of the total votes

> The votes of State Government shall have the weighted of two third of the total votes, cast in the meeting

3. Any act, decision or proceedings shall not be declared as invalid on the basis of any remaining deficiency at the time of establishment of GST Council i.e.

> if there is any vacancy remained in the Council

> if there is any defect in the constitution of Council

> if there is any defect in the appointment of a person as a member of the Council

> if there is any procedural non compliance.

Functions of the GST Council

The GST council will be supposed to make recommendation to the Union and State on the following matters :-

> On subsuming of various taxes, cess, and surcharge in GST.

> Details of services and goods that will be subjected to GST or which will be exempted from GST.

> On Threshold limit below which services and goods will be exempted from GST.

> On GST rates including floor rate with bands of GST and any special rate for time being to arrange resources to face any natural calamity.

> Making special provisions for the following states: Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.

> On model law on GST, Principal of levy of GST and the principals which will govern the place of Supply.


The vote of the Central Government shall have a weightage of 1/3rd of the votes cast &

Votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting.

Dispute Mechanism

The Constitution (One Hundred and First Amendment) Act, 2016 provides that the GST Council shall establish a mechanism to adjudicate any dispute –

1. Between the Government of India & one or more States, or

2. Between the Government of India and any State(s) one side & one or more other States on the other Side; or

3. Between two or more States, arising out of the recommendations of the Council or implementation thereof.