Article 279A (GST Council)

Background and evolution

Before GST, India had a tangle of indirect taxes: central excise and service tax levied by the Centre, and VAT, entry tax, octroi and others levied by states. Taxes on taxes raised costs, and differing state rates fragmented the national market. After more than a decade of debate, Parliament passed the 101st Amendment in 2016, which gave both the Centre and states concurrent power to tax goods and services (Article 246A) and created the GST Council under Article 279A to coordinate the system.

The President constituted the Council in September 2016, and GST came into force on 1 July 2017. The Council has since met more than fifty times and is often described as the most successful example of cooperative federalism in India, as it brings the Union and states together to make joint decisions on a shared tax.

Key features and provisions

• Members: the Union Finance Minister (chair), the Union Minister of State for Finance or Revenue, and the finance or taxation minister of each state (and UTs with legislatures); one state minister is chosen as vice-chairperson.
• Quorum: one-half of the total members.
• Voting: decisions require at least three-fourths of the weighted votes of members present and voting; the Centre's vote counts for one-third, and all states together count for two-thirds. Neither side can pass a proposal alone.
• Functions: recommends taxes to be subsumed, goods and services to be taxed or exempted, model GST laws, rates including floor rates, threshold limits, special rates during disasters, and special provisions for North-Eastern and hill states.
• Dispute settlement: may set up a mechanism to settle disputes between the Centre and states or among states.
• Petroleum: the Council must recommend the date from which petroleum products and natural gas will come under GST.