Centre-States Current Affairs

GST council approves law to compensate states for revenue loss  

The GST Council has approved a law to compensate states for any loss of revenue from the implementation of the new nationwide indirect taxation regime.

The meeting was held in Udaipur, Rajasthan first time outside national capital. It was headed by Union Finance Minister and attended by representatives from all states.

Key Facts
  • GST is a consumption based indirect tax levied on sale, manufacture and consumption on goods and services at a national level. It will replace a plethora of central and state indirect taxes.
  • The Compensation Law provides compensation to states that will incur losses because of implementation of the Goods and Service Tax (GST) in the first five years.
  • This law will go to Parliament for approval in the second half of the 2017-18 Budget Session beginning March 9, 2017.
  • This meeting deferred approval for enabling laws i.e. Central GST (C-GST), Integrated GST (I-GST) and State GST (S- GST) for full fledge implementation of GST regime.
  • Besides, Council gave its suggestions to legal sub-committee which is drafting the model laws, on issues like delegation of powers, composition of appeal at tribunal to adjudicate on disputes and exemptions during transition phase.

About GST Council

GST Council has been established as per Article 279A of the Constitution. It is joint forum of the Centre and the States to make recommendations on important issues related to GST. Union Finance Minister is Chairperson of the council. Besides, Union Minister of State (MoS) in-charge of Revenue of finance and Minister In-charge of taxation or finance or any other Minister nominated by each State Government are its Members.

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27th meeting of Southern Zonal Council held at Thiruvananthapuram

The 27th meeting of the Southern Zonal Council held at Thiruvananthapuram, Kerala was chaired by Union Home Minister Rajnath Singh.

The Southern Zonal Council consists of Kerala, Karnataka, Telangana, Tamil Nadu, Puducherry (UT) and Andhra Pradesh.

Key Facts
  • Many important issues were discussed during the meeting and resolved 16 out of 22 items on agenda.
  • The Council reviewed progress of implementation of various recommendations made in last meeting relating to Extension of High Speed Rail Corridor between Thiruvananthapuram up to Mangalore and Udupi, Peninsular Region Industrial Development Corridor, issues of fishermen, introduction of peninsular tourism trains in zone and Amendments to New Road Transport & Road Safety Bill.
  • It also took up issues which relate to uniformity in allocation of funds for scholarships in proportion of population of SC/ST for all courses, revision of ceiling on profession tax by Central Government, prevention of communicable diseases, Naxalism, promotion of oilseeds and oil palm cultivation and development of Puducherry Airport.

About Zonal Councils

  • Zonal Councils were set up under the States Reorganization Act, 1956 (so it is not constitutional body) to foster Inter-State co-operation and co-ordination among the States.
  • Currently, there are total five zonal councils viz. Northern, Western, Eastern, Central and Southern.
  • They are regional fora of cooperative endeavour for States linked with each other geographically, economically and culturally.
  • Zonal Councils provide a common meeting ground for the States to promote and facilitate coordinated efforts for fostering economic and social development.
  • They are mandated to discuss and make recommendations on matters of common interest in field of economic and social planning, linguistic minorities, border disputes and inter-State transport etc.
  • Note: The north eastern states are not included in these five zonal Councils. Their special problems are looked after by North Eastern Council, set up under the North Eastern Council Act, 1972. It is also headed by Union Home Minister.

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