GST Council

The GST Council is a constitutional body established under Article 279A, inserted by the Constitution (One Hundred and First Amendment) Act, 2016, which simultaneously created Articles 246A (concurrent taxing power) and 269A (inter-state supply). It is the apex policy-making and recommendatory institution for the Goods and Services Tax regime that came into force on 1 July 2017, replacing a fragmented architecture of central excise, service tax, VAT, octroi and entry tax. The Council embodies "pooled" or "shared" sovereignty in fiscal matters: both the Union and the States surrendered their independent taxing autonomy over indirect taxes and agreed to legislate in accordance with its recommendations.

Under Article 279A(2), the Council is chaired by the Union Finance Minister, with the Union Minister of State for Finance and one minister nominated by each State (usually the State Finance Minister) as members; the State members choose a Vice-Chairperson among themselves. Decisions require a majority of not less than three-fourths of the weighted votes of members present and voting, where the Centre commands one-third of the total votes and all States together command two-thirds (Article 279A(9)). The quorum is one-half of total members (Article 279A(7)). This weighting means neither the Centre nor any bloc of States can act unilaterally—the Centre alone can veto, but cannot impose. The Council's remit (Article 279A(4)) covers taxes to be subsumed, model GST laws, rates including floor rates with bands, threshold limits, special provisions for special-category states, and dispute resolution mechanisms (Article 279A(11)).

A pivotal development came in Union of India v. Mohit Minerals (2022), where the Supreme Court held that the GST Council's recommendations are persuasive and not binding on Parliament and State legislatures, reasoning that both wield simultaneous legislative power under Article 246A and that Indian federalism requires "cooperative dialogue." By early 2026 the Council had held over fifty meetings, navigating contentious issues including the compensation cess (guaranteed to States for five years until June 2022 under the GST (Compensation to States) Act, 2017, later extended to repay back-to-back loans), rate rationalisation, and the inclusion of petroleum, electricity and alcohol—the last of which remains constitutionally outside GST. A landmark rationalisation effective 22 September 2025 collapsed the structure largely into 5% and 18% slabs with a 40% rate on sin and luxury goods.

For the UPSC aspirant, the GST Council is examined across both General Studies Paper II (Polity)—as an instance of cooperative and "bargaining" federalism, constitutional bodies, and the federal balance of power—and Paper III (Economy), on indirect tax reform and Centre-State fiscal relations. Prelims frequently tests precise facts: the enabling article (279A), the voting weights (Centre one-third, States two-thirds, three-fourths to pass), the chairperson, and which goods remain outside GST. Mains answers should engage the Mohit Minerals ruling and debate whether the Council strengthens or strains the federal structure—a recurring analytical angle.