GST Council (Art. 279A) — Structure, Powers & Functions — Law of Taxation Notes

GST Council (Art. 279A) — Structure, Powers & Functions

Who decides that a biscuit is taxed at 18% and not 12%, and that the same rate applies in every State? Not the Centre alone, and not each State separately — a single joint forum where the Union and all the States sit together and vote: the GST Council, the constitutional engine of “one nation, one tax”.

Structure, powers and functions

The GST Council is a constitutional body created by Article 279A, constituted by the President within 60 days of the 101st Amendment. It is the institutional face of cooperative federalism in GST.

Structure (composition):

Chairperson — the Union Finance Minister;
the Union Minister of State for Finance/Revenue;
the Finance/Taxation Minister (or any nominated Minister) of each State — one per State, and they choose a Vice-Chairperson from among themselves.

Voting formula (Art. 279A(9)): decisions need a majority of not less than three-fourths of the weighted votes of members present and voting, where — the Centre has one-third of the total votes, and all the States together have two-thirds. Quorum is one-half of the members. This means neither the Centre alone nor the States alone can force a decision — both must agree.

Article 279A(4): “The Goods and Services Tax Council shall make recommendations to the Union and the States on— (a) the taxes … that may be subsumed …; (c) model Goods and Services Tax Laws, principles of levy …; (d) the threshold limit of turnover …; (e) the rates including floor rates with bands …; …”

Functions (what it recommends, Art. 279A(4)):

the taxes, cesses and surcharges to be subsumed into GST;
the goods and services that may be subjected to, or exempted from, GST;
model GST laws, principles of levy, and place-of-supply rules;
the threshold turnover limit for exemption;
the rates (including floor rates with bands) and special rates during calamities;
special provisions for certain States (North-East, hill States);
a mechanism to resolve disputes between the Centre and States (Art. 279A(11)).

Nature of its recommendations. In Union of India v Mohit Minerals (2022) the Supreme Court held that the Council’s recommendations are persuasive, not binding on Parliament or the State legislatures — they carry great weight (both governments legislate accordingly) but do not override legislative sovereignty.

In Simple Terms: The GST Council (Art. 279A) is the joint Centre-State forum, chaired by the Union Finance Minister with every State’s Finance Minister, that recommends GST rates, exemptions, thresholds and model laws. Its voting is weighted so neither the Centre nor the States can act alone — a three-fourths majority is needed. Its recommendations guide, but do not bind, the legislatures.

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Case Laws

Union of India v Mohit Minerals (P) Ltd. (2022) — GST Council recommendations are recommendatory, not binding; both Union and States have simultaneous legislative power.

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