Who is the Chairperson of GST Council ?

Question

UnlockIAS · Accepted Answer

Correct — B, Union Finance Minister. This is not a matter of practice or convention; the Constitution says it in as many words. Article 279A, inserted by the Constitution (One Hundred and First Amendment) Act, 2016 with effect from 12 September 2016, provides in clause (2): 'The Goods and Services Tax Council shall consist of the following members, namely:— (a) the Union Finance Minister — Chairperson; (b) the Union Minister of State in charge of Revenue or Finance — Member; (c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government — Members.' The Chairperson is therefore fixed by the Constitution and changes only when the finance portfolio changes hands. Clause (3) adds the balancing provision: the State ministers choose one from among themselves as Vice-Chairperson, so the Union holds the chair and the States hold the deputy chair. The design continues into how the Council votes, which is where its real character lies. Under clause (9) every decision needs not less than three-fourths of the weighted votes of the members present and voting, with the Central Government's vote weighted at one-third of the total cast and the votes of all State Governments together at two-thirds. The Centre alone cannot carry a decision and the States alone cannot carry one either — each side needs the other. Clause (7) fixes the quorum at one-half of the total members. This is why the GST Council is described as the working model of cooperative fiscal federalism in India.

Why the other options are wrong — (a) A different constitutional body doing a different job. Under Article 280 the President constitutes a Finance Commission within two years of the commencement of the Constitution and thereafter every fifth year, consisting of a Chairman and four other members, and its duty is to recommend how the net proceeds of divisible taxes are shared between the Union and the States and what principles should govern grants-in-aid. It advises on distributing revenue after it is collected; it has no role in deciding what is taxed or at what rate, and no seat on the GST Council.  (c) Not a member of the Council at all. Article 279A(2) names exactly three categories — the Union Finance Minister, the Union Minister of State for Revenue or Finance, and one minister from each State — and Corporate Affairs is none of them. The portfolio administers company law through the Ministry of Corporate Affairs and the National Company Law Tribunal, which is regulatory work, not tax policy.  (d) The Governor of the Reserve Bank chairs a different committee altogether — the Monetary Policy Committee, which sets the policy interest rate — and has no seat on the GST Council. The confusion is worth naming: monetary policy is the RBI's, fiscal and tax policy is the government's, and GST rates are decided by ministers accountable to legislatures, not by a central banker.

Concept: Before 1 July 2017 the power to tax goods and services in India was split. The Union levied central excise on manufacture and service tax on services; the States levied VAT or sales tax on sale, plus entry tax, octroi, luxury tax and entertainment tax. The Goods and Services Tax merged most of that into a single destination-based tax on supply, which required both the Union and every State to surrender part of their taxing power simultaneously. No ordinary body could manage that, so the 101st Amendment created a constitutional forum in which the two levels sit together and take joint decisions — the GST Council under Article 279A. Its recommendations cover which taxes are subsumed, which goods and services are exempt, the model GST laws and place-of-supply principles, the threshold turnover for exemption, the rates including floor rates with bands, special rates during a natural calamity, and special provisions for eleven named hill and north-eastern States. Article 279A(5) leaves one large question open: the Council must recommend the date from which GST will be levied on petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel — the five products that remain outside the tax in practice.

State PCS 2025 Q59 — Economy PYQ with Answer

State PCS 2025 Q59 — Economy PYQ with Answer