GST Council

Notes

Art. 279A, inserted by the 101st Amendment Act, 2016, creates the Goods and Services Tax (GST) Council, a constitutional body for cooperative fiscal federalism. GST was launched on 1 July 2017 ("One Nation, One Tax"). It is a dual GST: CGST and SGST on intra-State supplies, and IGST on inter-State supplies.

Composition

Union Finance Minister (Chairperson).
Union Minister of State in charge of Revenue or Finance.
Minister in charge of Finance or Taxation (or another nominee) of each State; the Vice-Chairperson is chosen by the State members. Delhi, Puducherry and Jammu and Kashmir are also represented.

Voting

Quorum: one-half of total members.
A decision requires a three-fourths majority of the weighted votes of members present and voting. The Centre has one-third weightage and all States together two-thirds. The Centre can block any decision, and the States collectively can too.

Functions

Recommend taxes, cesses and surcharges to be subsumed; goods and services exempted; rates, floor rates and thresholds; model GST laws; special rates during natural disasters; special provisions for certain States; the date for GST on petroleum crude, high-speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel. Alcohol for human consumption is outside GST.
Dispute resolution between the Union and States.
Compensation to States: the GST (Compensation to States) Act, 2017 guaranteed 14% annual growth in revenue for five years, funded by a compensation cess.

Judicial position: Mohit Minerals v Union of India (2022) held that the GST Council's recommendations are not binding on Parliament or State legislatures; they are persuasive, as both have concurrent power under Art. 246A.

Rate structure: originally 0, 5, 12, 18 and 28% slabs; recent reforms (2025) simplified the structure mainly to 5% and 18%, with a higher rate on sin and luxury goods.

Key Points

Art. 279A; 101st Amendment (2016); launched 1 July 2017.
Chair: Union Finance Minister; members: State finance ministers.
Decisions: three-fourths of weighted votes (Centre one-third, States two-thirds).
Recommendations are not binding (Mohit Minerals, 2022).
Petroleum products and alcohol: special position.

MCQs

Q1. The GST Council is a: (a) Statutory body (b) Constitutional body (c) Executive committee (d) Advisory body of the Finance Commission Ans: (b). Art. 279A.

Q2. In the GST Council, the Centre's vote carries a weightage of: (a) 25% (b) One-third (c) 50% (d) Two-thirds Ans: (b). States collectively have two-thirds.

Q3. The Chairperson of the GST Council is: (a) Prime Minister (b) Union Finance Minister (c) Chief Minister (d) Finance Secretary Ans: (b).