Consider the following statements: 1. The GST Council makes binding recommendations on GST rates. 2. Article 246A allows States to legislate on intra-state supply of goods and services. Which of the above is/are correct?

Correct — B. Statement 1 is false. Under Article 279A(4) the GST Council makes recommendations to the Union and the States, including on GST rates.

In Union of India v. Mohit Minerals (19 May 2022), the Supreme Court held that these recommendations are not binding and have persuasive value.

Statement 2 is true. Article 246A(1) lets Parliament and every State Legislature make GST laws. Clause (2) reserves only inter-State supply for Parliament, so States legislate on intra-state supply → option (b).

Why the others are wrong

• (a)
  Only 1 — Statement 1 is the false one. The Council's recommendations on rates do not bind the Union or the States, as the Supreme Court held in Mohit Minerals (2022).
• (c)
  Both 1 and 2 — Both cannot stand, because statement 1 is false. The Council recommends, and Parliament and the State Legislatures legislate. The Supreme Court called its recommendations persuasive, not binding.
• (d)
  Neither 1 nor 2 — Statement 2 is true. Article 246A gives the States power to make GST laws, subject only to Parliament's exclusive power over inter-State supply.

GST works through shared taxing power. Article 246A, inserted by the 101st Amendment Act, 2016, lets Parliament and the States both levy GST, with inter-State supply reserved to Parliament.

The GST Council under Article 279A brings the Union Finance Minister and the States' finance or taxation ministers together to recommend rates, exemptions and model laws.

Because 246A gives the power to the legislatures, the Council's recommendations guide them but do not bind them. That was the Supreme Court's reading in Mohit Minerals.

Key facts

• Article 246A(2): Parliament has exclusive power to make GST laws where the supply takes place in the course of inter-State trade or commerce.
• Article 279A(4): the GST Council makes recommendations to the Union and the States, including on GST rates.
• Union of India v. Mohit Minerals, decided on 19 May 2022, held that GST Council recommendations are persuasive, not binding.
• Article 246A was inserted by the Constitution (101st Amendment) Act, 2016.

Common traps

• Assuming that because every GST rate change passes through the Council, its word is binding. The Constitution calls it a recommendation.
• Reading 246A as giving States power over inter-State supply, which clause (2) reserves for Parliament.

No directly related past PYQ was found.