The proposed structure will comprise the GST Secretariat, the implementation committee and a single standing committee of officers. Several existing committees and sectoral groups are likely to be wound up, including the Fitment Committee, which has been handling rate-related proposals since the launch of GST in 2017.
The GST Fitment Committee is essentially the technical working arm that examines and prepares the groundwork for GST rate and classification decisions before they go to the GST Council.
When GST was introduced in 2017, the Council had created a three-tier structure comprising the Secretariat, an implementation committee, eight standing committees and 18 sectoral groups. The arrangement was needed as GST replaced about a dozen central and state-level taxes, while officials had to work on the implementation of a new tax system across sectors.
With the tax system having stabilised and the rate structure having been settled last year, the technical work is now proposed to be handled through a leaner structure, sources said.
The implementation committee is proposed to continue as the top decision-making body among the officers’ committees. It will take up matters referred to it by the Secretariat and decide issues that have been authorised by the Council. Matters requiring a higher-level decision will be referred to the Secretary, the Union finance minister or the Council, as applicable.
The committee will also continue to handle technology-related grievances, a responsibility it has held since the Council’s 26th meeting.
The proposed standing committee will undertake the technical work currently spread across multiple committees and sectoral groups. It will examine proposals to amend laws, rules, notifications and forms, besides looking at ways to simplify procedures.
It will also consider representations from trade and industry and prepare proposals for consideration by the Council. In effect, the new committee will bring together the technical work currently being undertaken by eight standing committees and 18 sectoral groups.
The membership of the new committee is proposed to be based on each state’s relative size in the GST system and will rotate every two years. No state will have a permanent seat, while no state will be permanently excluded from the committee.
The agenda will be circulated to all states, irrespective of whether they are represented on the committee, and states will be able to submit their views on any item.
The restructuring is also aimed at ensuring that proposals are politically owned from the outset rather than being developed entirely at the officials’ level and subsequently placed before the Council for endorsement. The process is also proposed to be more transparent, with agendas circulated and views invited.
For industry, the proposed arrangement could provide a shorter and more direct route for representations. Instead of being examined sequentially by multiple committees, representations would be considered by the standing committee, which would examine the issue and prepare it for consideration by the Council.
Prashanth Agarwal, partner at PwC India, said the restructuring should help industry get faster hearings and resolution of its representations by reducing overlaps.
“GST has been one of the best examples of the federal structure, where the states and the Centre contribute equally to decision-making. The Council has continuously worked on matters concerning industry at large and has been supportive in addressing them,” he said.
Agarwal said it would be important to institutionalise the advocacy process and ensure transparency, to the extent possible, through the new committee, including on the status of representations filed and decisions taken on them.
“This would go a long way in further strengthening collaboration between taxpayers and policymakers and in ensuring that all necessary steps are taken to support ease of doing business,” he said.
“For trade and industry and chambers of commerce, this is a welcome move. The consolidation of multiple GST Council officer-level committees into just three bodies reflects the maturity and stabilisation of the GST framework,” said Vivek Jalan, partner at Tax Connect Advisory Services.
From an industry perspective, representations will now follow a more streamlined and transparent route, he said. The reform is expected to reduce procedural layers, bring greater consistency in decision-making and enable faster consideration of genuine trade concerns, Jalan said.
