Article 279A of CoI : Article 279A: Goods and Services Tax Council.

Explanation using Example

Example 1:

Scenario: Introduction of a new tax rate for luxury goods.

Details: The Goods and Services Tax Council (GST Council) is convened to discuss the introduction of a new tax rate for luxury goods such as high-end cars, yachts, and private jets. The Union Finance Minister, the Union Minister of State in charge of Revenue, and the Finance Ministers from all the States are present.

Process:

1. The Union Finance Minister chairs the meeting.
2. The Council discusses the need for a higher tax rate on luxury goods to increase revenue.
3. The Council recommends a new GST rate of 28% for luxury goods.
4. The recommendation is put to a vote. The Central Government's vote has a weightage of one-third, and the State Governments' votes together have a weightage of two-thirds.
5. The recommendation passes with a three-fourths majority.

Outcome: The new GST rate for luxury goods is implemented, and businesses dealing in luxury goods must now charge 28% GST on their sales.

Example 2:

Scenario: Exemption of essential goods from GST.

Details: The GST Council meets to discuss exempting essential goods such as rice, wheat, and pulses from GST to make them more affordable for the common people.

Process:

1. The Union Finance Minister chairs the meeting.
2. The Council reviews the impact of GST on the prices of essential goods.
3. The Council recommends exempting rice, wheat, and pulses from GST.
4. The recommendation is put to a vote. The Central Government's vote has a weightage of one-third, and the State Governments' votes together have a weightage of two-thirds.
5. The recommendation passes with a three-fourths majority.

Outcome: Rice, wheat, and pulses are exempted from GST, reducing their prices and making them more affordable for consumers.

Example 3:

Scenario: Special GST rate for a natural disaster relief fund.

Details: A severe flood affects several states, and the GST Council is convened to discuss raising additional resources for disaster relief.

Process:

1. The Union Finance Minister chairs the meeting.
2. The Council discusses the need for additional funds to support flood relief efforts.
3. The Council recommends a special GST rate of 1% on all goods and services for a period of six months to raise funds for disaster relief.
4. The recommendation is put to a vote. The Central Government's vote has a weightage of one-third, and the State Governments' votes together have a weightage of two-thirds.
5. The recommendation passes with a three-fourths majority.

Outcome: A special GST rate of 1% is implemented for six months, and the additional revenue generated is used for flood relief efforts in the affected states.

Example 4:

Scenario: Dispute resolution between states on GST revenue sharing.

Details: Two states, State A and State B, have a dispute over the sharing of GST revenue from inter-state trade.

Process:

1. The GST Council establishes a mechanism to adjudicate the dispute.
2. Representatives from the Government of India and the two states present their cases to the adjudication panel.
3. The panel reviews the principles of levy and apportionment of GST as per Article 269A.
4. The panel makes a recommendation on how the GST revenue should be shared between State A and State B.

Outcome: The dispute is resolved based on the panel's recommendation, ensuring a fair distribution of GST revenue between the two states.