GST Council in India

GST Council

• Established by the President under Article 279A of the Indian Constitution
• A joint forum of the center and states

Composition of GST Council

• Chairperson: Union Finance Minister
• Members:
  • Union Minister of State in charge of Revenue
  • Minister in charge of Finance or Taxation
  • Any Minister nominated by the State Government

Decision Making Process

• Decisions are made through voting
• Requires 3/4th majority of present and voting members
• Center's share in voting is 33% of votes cast

Role of GST Council

• Decision maker in various aspects of GST, including:
  • Tax rates
  • Revenue sharing
  • Exemptions

Dated Securities

Bonds

• Represent a loan from the investor to the borrower (issuer)
• Issued with a face value (principal) and a coupon rate (interest rate)
• Investor receives regular interest payments (coupon payments) and the face value at maturity

Key Features of Bonds

• Face value (principal) is the amount borrowed
• Coupon rate (interest rate) is the percentage of the face value paid periodically
• Maturity date is the date when the bond expires and the issuer repays the face value

Coupon Rates

• Expressed as a percentage of the face value
• Can be fixed or floating
• Affects the bond's attractiveness to investors

Maturity Dates

• Can range from a few months to several years
• Short-term bonds (less than 1 year) are referred to as short-term paper
• Long-term bonds (over 1 year) are referred to as long-term paper

Yield Curves

• Graphical representation of the relationship between yield and maturity
• Shows the expected return on investment for bonds with different maturities
• Used to estimate the cost of borrowing for issuers and return on investment for investors

Credit Risk

• Risk that the issuer may default on loan obligations
• Can lead to a reduction in the bond's value and a higher yield
• Measured by credit rating agencies such as Moody's and Standard & Poor's

Government Securities

G-Secs (Government Securities)

• Bonds issued by the government to finance its activities
• Considered very low-risk and liquid investments
• Used by central banks to implement monetary policy

T-Bills (Treasury Bills)

• Short-term government securities with maturities ranging from a few weeks to a year
• Issued at a discount to their face value and pay the full face value at maturity
• Used to manage the government's short-term cash requirements

Cash Management Bills

• Short-term government securities with maturities less than 1 year
• Used to manage the government's daily cash requirements
• Similar to T-Bills but with shorter maturities

Learn about the formation, composition, and decision-making process of the GST Council in India, as established by the Indian Constitution.