Why in News

• The GST Council, in its 56th meeting, approved a rationalised two-slab GST structure

  • 5% rate

  • 18% rate

  • Special 40% rate for sin and luxury goods

About GST Council

• Constitutional Body

• • Established under Article 279A of the 101st Constitutional Amendment Act, 2016

• Role

• • Recommends GST rates, exemptions, laws, and levy principles

• Composition

• • Union Finance Minister → Chairperson

  • Union MoS for Finance/Revenue

  • Finance/Taxation Ministers of all States/UTs

  • Governor-nominated representative (in case of President’s Rule)

• Quorum

• • At least 50% of total members must be present

• Voting Procedure

• • Union Govt. → 1/3rd weightage

  • States/UTs → 2/3rd weightage

  • Decision passes if ≥75% weighted votes are in favour

• Functions

• • Recommend GST rates, exemptions, and threshold limits

  • Address inverted duty structure

  • Suggest model GST laws and amendments

  • Decide special rates during natural disasters

  • Ensure uniform GST across Centre & States

About Two-Slab GST Structure

• What is it?

• • Rationalisation of GST into two main slabs

    • 5% slab

    • 18% slab

    • Special 40% rate for sin and luxury goods

• Objectives

• • Simplify GST for ease of business and compliance

  • Reduce cost burden on consumers

  • Maintain equity

    • Essentials taxed lower

    • Luxury and sin goods taxed higher

  • Improve revenue buoyancy and reduce leakages