After 9 years of implementation of the Goods and Services Tax (GST), the GST Council may consider reconstituting its committees of tax officers. Sources gave this information. The objective of this exercise is to make the indirect tax system more streamlined and effective as it matures. It is proposed to reorganize the structure of the committees supporting the functioning of the Council into three unified bodies – the Secretariat, the Implementation Committee and the Standing Committee of Officers. Currently the system of GST tax authorities consists of eight standing committees and 18 regional groups including the Secretariat, Implementation Committee, Fitment and Law Committee.

Why does the council want change?

Sources said that it was felt that after 9 years the GST Council system has stabilized and the tax rate structure was also fully decided last year. Therefore, more work can be carried out through a simpler and more streamlined system. According to the new structure under consideration by the Committee of Officers, the GST Implementation Committee (GIC) will be the top level decision-making body. It will consider cases referred by the Secretariat and decide on matters referred by the Council. The GIC will refer important matters to the Secretary, Union Finance Minister or the Council as required. It will also continue to address technology related complaints.

What will the new standing committee do?

A new standing committee will handle the technical work. It will scrutinize proposals for amendments to laws, rules, instructions and forms besides simplifying procedures and consider submissions from trade and industry. The membership of the Standing Committee shall be determined on the basis of the proportional size of each State and shall change every two years on a rotational basis. No state will have a permanent meeting, and the agenda to be placed before the committee will be shared with all states to seek their views.

Sources said the proposed institutional reforms are based on two principles – first, there should be political consensus and accountability on proposals from the outset, and not just be decided among officials and approved later. Besides, ensuring transparency in the management of proposals is its second premise. GST has created a unified system of ‘One Nation, One Tax’ by combining several local taxes and cesses like excise duty, service tax and VAT.