- The Union Finance Minister refuted claims of friction between the Centre and States over GST, emphasizing the need for a cooperative federal structure for effective revenue generation.
- GST Council meetings focus on simplifying tax processes, rationalizing GST rates, and addressing tax evasion, with minimal political interference.
- 60% of consumer items attract a GST rate of 5% or less, and less than 3% falls in the highest 28% tax bracket.
- Additionally, 84% of industry respondents have expressed a positive view of GST.
- The current average GST rate has decreased to 12.2%, down from the revenue-neutral rate of 15.3% when GST was first implemented in 2017.
- A Group of Ministers (GoM) has been formed by the GST Council to explore further rate reduction and rationalization.
- The need for cooperation between the Centre and States was reiterated to ensure smooth and effective tax policy implementation.
| GST Council • The GST Council is a constitutional body, established under Article 279A of the Constitution and includes representatives from the Central and State governments. • The council is chaired by the Union Finance Minister and includes State Finance Ministers. • The GST Council’s key functions include deciding tax rates, exemptions, thresholds, and administrative procedures. • Decisions in the council are made through voting, with the Centre holding one-third of the votes and the States holding two-thirds. • In the GST Council, decisions require a three-fourths majority of the total weighted votes |
Dig Deeper: Read about the Reverse Charge Mechanism in the context of GST.
