What the GST Council Is and Why It Matters

If you run a business or just file taxes in India, you’ve heard the term “GST Council”. It’s the group that decides the tax rates, thresholds and rules for the Goods and Services Tax (GST). Knowing who sits on the council and how they make decisions can save you time and money.

Who sits on the GST Council?

The council has two types of members: the Union Finance Minister (who leads it) and the Finance Ministers of all states and union territories. Each state gets one seat, so the council reflects both central and regional interests. When a new tax rate is proposed, each member votes – a simple majority decides, but the Union Minister has a tie‑breaker.

Key powers of the council

The council can:

• Change GST rates for goods and services.
• Adjust the threshold for mandatory registration.
• Decide on special exemptions or exemptions for certain sectors.
• Approve changes to the tax‑invoice format and compliance timelines.

Because these changes affect every invoice you issue, staying ahead of council meetings is a must.

Recent decisions you should know

In the last meeting (June 2024), the council:

• Reduced the GST rate on electric vehicles from 12% to 5% to boost green mobility.
• Kept the 18% rate for most services unchanged, confirming stability for IT and consulting firms.
• Raised the registration threshold for small traders to ₹40 lakhs, giving many micro‑businesses a break.

These moves directly impact pricing, cash flow and compliance costs for many sectors.

How to prepare for council changes

1. Watch the agenda. The council publishes its meeting agenda a week in advance. Sign up for alerts on the GST portal.

2. Review your product classification. If a rate changes, check whether your goods shift to a new HSN code.

3. Update your accounting software. Most tools let you set automatic rate updates – turn that on.

4. Talk to your tax advisor. A quick call after a major decision can clarify how to apply exemptions.

Common questions

Will the GST Council ever meet more than once a year? Yes. While the calendar aims for quarterly meetings, urgent matters (like pandemic relief) can trigger extra sessions.

Can a state set its own GST rate? No. The council’s decision is uniform across India, but states can suggest special rates for local goods within the council’s framework.

What if I miss a rate change? You’ll need to file a revised return for the affected period, which may involve penalties. That’s why staying updated matters.

Understanding the GST Council isn’t just for tax geeks. It’s about keeping your business agile, avoiding surprise costs, and making smarter pricing decisions. Keep an eye on the council’s releases, and you’ll stay ahead of the tax curve.