"GST Council Approves Reforms to Ease Compliance and Litigation"
GS Paper 3 (Indian Economy, Taxation, Government Budgeting) and GS Paper 2 (Constitutional Bodies, Centre-State Relations).
Prelims:
Mains:
GST Council
Constitutional body under Article 279A that decides GST rates, exemptions, and administration rules.
Input Tax Credit (ITC)
Credit for tax paid on inputs, used to reduce tax liability on final output.
The GST Council is a constitutional body established under Article 279A, inserted by the 101st Constitutional Amendment Act, 2016. The Union Finance Minister chairs the Council. It includes the Finance or Taxation Ministers from every state and union territory that has a legislature. GST Council decisions require a three-fourths majority. States hold two-thirds of the voting weight and the Centre holds one-third. In practice, the Council usually works by consensus rather than formal voting. The Union Revenue Secretary serves as its ex-officio Secretary. The Chairperson of the Central Board of Indirect Taxes and Customs (CBIC) attends as a permanent, non-voting invitee.
When GST was introduced, it replaced many separate taxes collected by different authorities at different points of sale. GST subsumed 17 central and state levies and 23 cesses into one unified tax. At the Centre, this included Central Excise Duty and Service Tax. At the state level, it replaced VAT, Entry Tax, and similar levies. This removed the earlier cascading tax-on-tax effect. It also aimed to build a single national market where goods move freely across state borders without facing repeated taxation at each state boundary. Certain essential items such as unprocessed food grains, basic eggs, and newspapers remain exempted from GST to protect consumers.
The Council's 56th meeting focused on rate rationalisation. It cut and restructured GST slabs. The 57th meeting shifted focus to process reforms. It covered registration, returns, refunds, cancellation, adjudication, and clarifications on GST applicability to specific goods and services. This marked a broader shift from fixing tax rates to fixing how the tax is actually administered day to day.
Registration is the entry point into the GST system. A taxpayer must register before collecting or paying GST. The Council approved reforms to make registration more certain and more automated. The new approach gives clearer guidance on which documents are required. This reduces ambiguity for applicants. Most low-risk applicants already move through a largely portal-driven process. The reforms build on this by reducing discretionary document demands from officers. Rule 14A provides for automatic registration in certain conditions, and the Council's decisions reinforce the move toward a rules-based, portal-driven system.
Input Tax Credit, or ITC, is credit for tax already paid on inputs. A registered taxpayer uses ITC to reduce the tax owed on final output. …
What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'?
1.It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2.It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves.
3.It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
Which of the following is/are among the noticeable features of the recommendations of the Thirteenth Finance Commission?
1.A design for the Goods and Services Tax, and a compensation package linked to adherence to the proposed design
2.A design for the creation of lakhs of jobs in the next ten years in consonance with India's demographic dividend
3.Devolution of a specified share of central taxes to local bodies as grants
Select the correct answer using the codes given below:
Enumerate the indirect taxes which have been subsumed in the Goods and Services Tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.
The GST Council was constituted under which Article of the Constitution of India?
Consider the following statements regarding the GST Council: 1. Its decisions require a three-fourths majority of the members present and voting. 2. States collectively hold two-thirds of the voting weight while the Centre holds one-third. 3. The Chairperson of the Central Board of Indirect Taxes and Customs (CBIC) has voting rights in the Council. How many of the above statements are correct?
Which of the following changes were recently recommended by the GST Council regarding enforcement and penalties? 1. Raising the prosecution threshold from ₹1 crore to ₹5 crore. 2. Removing arrest powers of GST officers. 3. Increasing the general penalty from ₹10,000 to ₹25,000. Select the correct answer using the code below.
Match List-I (GST process reform) with List-II (associated figure/date) and select the correct answer using the code given below.
List-I:
A.Refund acknowledgment period,
B.Automatic registration clearance for low-risk applicants,
C.GST prosecution threshold,
D.Inverted duty refund for input services
List-II:
1.10 days,
2.3 working days,
3.₹5 crore,
4.November 1, 2026
Consider the following statements regarding GST treatment of service exports: 1. An Indian firm providing services to a foreign client through its own overseas branch can avail of GST export benefits. 2. Testing, repair, certification and research done in India for a foreign client is proposed to be classified as export of services even if goods remain within the country. 3. The date of receipt of export payment is to be determined solely at the discretion of GST field officers. Which of the statements given above is/are correct?
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