Goods and Services Tax Council (GST Council): Role, Structure & Functions

The GST Council was created by the 101st Amendment Act of 2016 in accordance with Article 279-A of the Indian Constitution to promote cooperation between the federal and state governments on GST-related issues. This article provides a comprehensive breakdown about GST Council, changes in 2025, procedural reforms and the long term impact on Indian Industries.

In line with Article 279-A of the Indian Constitution, the 101st Amendment Act of 2016 established the GST Council to foster collaboration between the federal and state governments on matters pertaining to the GST. These are some of its primary responsibilities.

Setting Tax Rates :Determining the GST rates for different product and services.
Policy Formulation: Suggestions for threshold limits place of supply and levy.
Compliance Oversight :Establishing procedural rules and compliance requirements.
Special Provisions :Meeting the particular requirements of certain states or industries

The Council Comprises the following:

The Finance Minister of the Government of India, who serves as the Chairperson.
The Minister of State in charge of Union Revenue or Finance.
The Minister in charge of Finance, Taxation, or any other Minister appointed by each state as a council member

Functions of the GST Council

In India the GST Council is the highest decision-making body in charge of creating and overseeing the framework for the Goods and Services Tax (GST). By suggesting rates exemptions taxation policies and state-specific clauses it guarantees a uniform tax system nationwide.

Function	Description
Determining Taxable & Exempt Goods/Services	Identifies goods and services subject to GST and those eligible for exemptions to support industries and consumers.
Formulating GST Laws & Tax Principles	Develops the Model GST Law, taxation principles, and rules for IGST levy and distribution, including the Place of Supply.
Setting & Revising GST Rates	Defines GST tax slabs and revises them as needed. Introduces higher tax rates during emergencies or natural calamities.
Addressing Special Provisions for Certain States	Provides special tax relief or exemptions to specific states based on their economic and financial conditions.

Working of the GST Council

The GST Council uses formal meetings to decide on important tax-related matters. At least half of the members must be present for a meeting to have the necessary quorum. It takes a three-fourths majority of the weighted votes of the members who are present and voting to pass any resolution or decision.

Voting Structure in the GST Council

The vote cast by the central government accounts for one-third of all votes.
The combined weight of the state governments votes is two-thirds.

Validity of GST Council Decisions

The following situations do not affect the legality of a GST Council decision or action:

If the Council is not yet fully formed or has a vacancy. if there is a procedural flaw in a members appointment.
If there are any procedural irregularities that don't affect the decision's merits.

Power Dynamics, Consensus Building, and Decision Making in the GST Council

As a federal decision-making body the GST Council adopts resolutions by a simple majority vote. A minimum of three-fourths of the members in attendance must vote in favor of a decision. To maintain a balanced federal structure the states collectively control two-thirds of the votes with the federal government holding one-third of the vote.

Key Decision Making and Actions of the GST Council

The GST Councils main decisions and actions. The GST Council has met frequently since its establishment to discuss important matters pertaining to the implementation of the GST in India. Among its main projects are:

Introducing the e-way bill system for effective transportation of goods.
Putting the electronic invoicing system into place to improve compliance and lower tax evasion.
Green mobility is being promoted by lowering the GST rates on electric vehicles.

List of GST Council Members

Member Name	Designation	State/Centre
Smt. Nirmala Sitharaman	Finance Minister of India (Chairperson)	Central
Shri Pankaj Chaudhary	Union Minister of State (Finance)	Central
Shri Buggana Rajendranath	Finance Minister	Andhra Pradesh
Shri Chowna Mein	Deputy Chief Minister	Arunachal Pradesh
Smt. Ajanta Neog	Finance & Women and Child Development Minister	Assam
Shree Vijay Kumar Chaudhary	Finance Minister and Commercial Taxes Minister	Bihar
Shri T.S. Singh Deo	Minister for Commercial Tax	Chhattisgarh
Shri Kailash Gahlot	Cabinet Minister	Delhi
Shri Mauvin Godinho	Transport & Legislative Affairs Minister	Goa
Shri Kanubhai Desai	Finance Minister	Gujarat
Shri Dushyant Chautala	Deputy Chief Minister	Haryana
Shri Jai Ram Thakur	Chief Minister	Himachal Pradesh
Shri Jai Ram Thakur
Shri Rajeev Rai Bhatnagar	Advisor to Lieutenant Governor	Jammu & Kashmir
Dr. Rameshwar Oraon	Planning, Finance & Tax Minister	Jharkhand
Shri Krishna Byre Gowda	Minister for Revenue	Karnataka
Shri K N Balagopal	Finance Minister	Kerala
Shri Jagdish Devda	Finance Minister	Madhya Pradesh
Shri Ajit Pawar	Deputy Chief Minister	Maharashtra
Dr. Sapam Ranjan Singh	Medical & Health Minister	Manipur
Shri Abu Taher Mondal	Taxation Minister	Meghalaya
Shri Lalchamliana	Minister of Home & Taxation	Mizoram
Shri K.G Kenye	Minister for Power & Parliament Affairs	Nagaland
Shri Bikram Keshari Arukha	Finance Minister	Odisha
Shri K. Lakshminarayanan	Public Works Minister	Puducherry
Shri Pramod Sawant	Chief Minister	Goa
Shri Raghubar Das	Former Chief Minister	Jharkhand
Shri N. Biren Singh	Chief Minister	Manipur
Shri Neiphiu Rio	Chief Minister	Nagaland
Shri Prem Singh Chandumajra	Finance Minister	Punjab
Shri Sukhjinder Singh Randhawa	Rural Development Minister	Punjab
Shri Uddhav Thackeray	Former Chief Minister	Maharashtra
Smt. Mamata Banerjee	Chief Minister	West Bengal

Important Highlights 2025

Leading significant reforms that affect consumers businesses and the economy the Goods and Services Tax (GST) Council continues to be at the vanguard of India's changing tax structure. Tax rates were revised by the GST Council in 2025 to increase equity clarity and consistency across industries. Certain industries including food processing, fast-moving consumer goods and electric vehicles are impacted by these changes ensuring that tax arrangements take changing economic priorities into account. focusing on streamlining taxes and reducing classification disputes.

GST Tax Rate Adjustments (2025)

Tax rates were revised by the GST Council in 2025 to increase equity clarity and consistency across industries. Certain industries including food processing fast-moving consumer goods and electric vehicles are impacted by these changes ensuring that tax arrangements take changing economic priorities into account. focusing on streamlining taxes and reducing classification disputes.

Item/Service	Previous GST Rate	Revised GST Rate	Remarks
Used Electric Vehicles (EVs)	Exempt	18%	Applicable only to sales by registered sellers. Private transactions remain exempt.
Fortified Rice Kernels (FRK)	Varied	5%	Standardized to promote nutritional initiatives.
Popcorn (Non-branded, mixed with salt and spices)	Varied	5%	Uniform tax rate applied nationwide.
Popcorn (Pre-packaged, branded)	Varied	12%	Clarification of applicable GST slab.
Caramel Popcorn	Varied	18%	Classified as sugar confectionery.

GST Compliance Measure (2025)

In order to enhance digital security rate structures and tax compliance the GST framework was significantly updated in 2025. These modifications are intended to streamline business procedures lower tax disputes and encourage economic expansion in a number of industries.

Compliance Measure	Implementation Date	Applicability	Purpose
Multi-Factor Authentication (MFA) for GST Portal	January 1, 2025	Taxpayers with AATO exceeding ₹200 million	Enhances security and prevents unauthorized access.


Multi-Factor Authentication (MFA) Expansion	February 1, 2025	Taxpayers with AATO exceeding ₹50 million	Strengthens login security for medium-scale businesses.


Invoice Management System (IMS)	2025 (Exact date TBA)	All registered taxpayers filing GSTR-3B	Links GSTR-3B filing to GSTR-2B availability, reducing tax credit discrepancies.

55th GST Council Meeting: Key Tax Rate Changes and Compliance Updates

To improve the ease of doing business the 55th GST Council Meeting introduced important tax reforms exemptions and compliance changes. A comprehensive table outlining the main suggestions for the GST including changes to the tax rate and clarifications to the policy is provided below:

Category	Recommendation	Details
GST Rate Changes (Goods)	Fortified Rice Kernel (FRK) – Reduced GST	GST rate on FRK (HSN 1904) reduced to 5%
	Exemption on Gene Therapy	GST fully exempted on gene therapy treatments
	IGST Exemption – LRSAM System	IGST exemption extended for systems, sub-systems, tools, and software used in the manufacturing of LRSAM
	Compensation Cess Reduction for Merchant Exporters	Compensation cess reduced to 0.1% to align with GST rates
	Exemption for International Atomic Energy Agency (IAEA)	IGST exemption for imports of equipment & consumable samples by IAEA Inspection Team
	Concessional 5% GST for Food Preparations	Concessional 5% GST on inputs for food preparations supplied under government programs for the economically weaker sections
GST Rate Changes (Services)	Sponsorship Services – Forward Charge Mechanism	Sponsorship services by body corporates now under Forward Charge Mechanism
	Exemption for Motor Vehicle Accident Fund	No GST on contributions by general insurance companies from third-party motor vehicle premiums
	Declared Tariff Definition Amendment	Declared tariff definition linked to actual value of supply in hotels
	Restaurant Services GST Linked to Previous Year Revenue	- 18% GST with ITC for hotels with room rates exceeding ₹7,500 in the previous year - 5% GST without ITC for others - Hotels can opt for 18% GST with ITC if declared at the start of the financial year
	Composition Levy Scheme – Reverse Charge Exemption	Taxpayers under Composition Scheme exempt from Reverse Charge Mechanism on commercial property renting

Clarifications on GST Applicability	Old & Used Vehicle GST Increased	GST on sale of old & used vehicles (including EVs) increased from 12% to 18%
	Classification of Autoclaved Aerated Concrete (AAC) Blocks	ACC blocks with >50% fly ash fall under HS 6815 with 12% GST
	No GST on Agriculturist Supply of Certain Goods	Pepper (green/dried) and raisins supplied by farmers are not liable for GST
	Pre-Packaged & Labeled Goods Definition Revised	Covers retail goods ≤25 kg/liters requiring declarations under Legal Metrology Act
	Clarification on Popcorn GST Rates	- Salted/Spiced Popcorn: 5% (loose), 12% (pre-packaged) - Caramel Popcorn: 18% GST (classified under HS 1704 90 90)
	Exemption for Payment Aggregators (RBI Regulated)	Payment Aggregators (regulated by RBI) exempt from GST; however, Payment Gateways (PGs) & Fintech Services are still taxable
	No GST on Penal Charges by Banks/NBFCs	Penal charges on loan defaults are not taxable under GST
Taxability of Vouchers	Vouchers Not Considered Supply	GST Council clarifies that vouchers are neither goods nor services
	No GST on Principal-to-Principal Voucher Transfers	Direct sale of vouchers not subject to GST; only agent commissions taxable
	No GST on Expired (Unredeemed) Vouchers	Breakage revenue (unredeemed vouchers) not taxable under GST
Trade Facilitation & Compliance Measures	SEZ & FTWZ Goods Supply Exemption	Goods warehoused in SEZ/FTWZ before clearance for export or Domestic Tariff Area (DTA) are not considered supply
	Clarification on ITC for Ex-Works Contracts	Recipients in Ex-Works contracts can claim ITC even when goods are delivered at supplier’s place
	Late Fee Waiver for GSTR-9C (FY 2017-18 to 2022-23)	Late fee waived for delayed filing of GSTR-9C if submitted before 31st March 2025
Appeal & Litigation Relief	Pre-Deposit for Penalty-Only Appeals Reduced	- Before Appellate Authority: Pre-deposit reduced from 25% to 10% - Before Appellate Tribunal: New 10% pre-deposit rule added
New Compliance & Digital Enhancements	Track & Trace Mechanism for High-Risk Goods	Govt. to introduce unique ID tracking system for evasion-prone commodities
	Invoice Management System (IMS) Implementation	- GSTR-2B generation based on IMS data - ITC reversal linked to credit notes - GSTR-3B filing allowed only after GSTR-2B availability
	Temporary GST Identification for Non-Registered Persons	New rule allows tax officers to issue temporary GST IDs for one-time payments

Key Policies & Decisions Structural Reforms from the 55th GST Council Meeting

The 55th GST Council meeting Introduced the important policy measures to address state concerns, improve regulatory, clarity, and expedite tax administration w The following are the main decisions made at the meeting:

Reforms to IGST Settlement: The Council accepted the officers committees recommendations on IGST settlement concerns brought up by the states with a finalization deadline of March 2025. The Council examined the procedural rules for the internal operation of the GST Appellate Tribunal (GSTAT) which will be announced following a legal review. This will facilitate the GSTATs quick operationalization.
GST Compensation Restructuring: The Council gave the Group of Ministers (GoM) until June 30 2025 to complete the GST compensation restructuring framework.
Natural Disaster Levy Policy: In response to the request by Andhra Pradesh, the Council suggested establishing a Group of Ministers (GoM) to examine the structural and legal ramifications of levying money to fund relief efforts for natural disasters and create a standardized policy.
Municipal Fees and GST on Floor Space Index (FSI): The Council deliberated on whether or not municipalities ought to impose GST on fees associated with FSI including extra FSI using the reverse charge method. At the request of the Central Government the decision was postponed for additional analysis.

FAQs on GST Council

Q. What is the GST Council ?

A. In India, the GST Council is the regulatory body in charge of monitoring and offering suggestions regarding matters pertaining to the Goods and Services Tax (GST). Finance ministers from every state and union territory with a legislature are included along with the Union Minister of State for Finance and the Union Finance Minister who serves as its chair.

Q. How often does the GST Council meet ?

A. The GST Council meets on a regular basis to deliberate and make decisions on a range of GST implementation issues such as tax rates exemptions and procedural modifications. The Council met for the 55th time on December 21 2024 having met 55 times as of March 2025.

Q. What are the latest GST Tax rate Changes Approved by the GST Council ?

A. The Primary Functions of the GST Council Include:

Making recommendations regarding model GST legislation levy principles.
GST revenue allocation.
Addressing concerns pertaining to particular states special provisions.

Q. How does the GST Council decision Impact Business and Taxpayers ?

A. The Central Government receives one-third of the votes cast in the GST Councils decision-making process while the State Governments as a whole receive two-thirds. To be adopted a decision must receive a minimum of 75% of the weighted votes.

Q. Where can I find the official GST Council notification and updates ?

A. The official website of the GST Council provides news releases, announcements and updates. Comprehensive details about meetings decisions and other GST-related resources are available on this website.