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Difficulty: HardFiscal Policy, Union/State Budgeting, Public Finance, and Taxation Structure

With reference to the Goods and Services Tax (GST) and the Goods and Services Tax Council under the Indian taxation framework, consider the following statements:

1. Under Article 269A of the Constitution of India, Goods and Services Tax on supplies in the course of inter-State trade or commerce is levied and collected by the Government of India and apportioned between the Union and the States.
2. Decisions of the Goods and Services Tax Council are taken by a majority of not less than two-thirds of the weighted votes of the members present and voting.
3. The vote of the Central Government has a weightage of one-third of the total votes cast, while the votes of all State Governments combined have a weightage of two-thirds of the total votes cast in the GST Council.

Which of the statements given above is/are correct?

  1. 1 and 3 onlyAnswer
  2. B
    1 and 2 only
  3. C
    2 and 3 only
  4. D
    1, 2 and 3

Answer

1 and 3 only
Statement 1 accurately describes Article 269A, which governs the levy, collection, and apportionment of Inter-State GST (IGST) by the Union. Statement 3 correctly identifies the constitutional weightage assigned to votes cast in the GST Council (Central Government = 1/3rd weightage, all State Governments combined = 2/3rd weightage). Statement 2 is false because Article 279A(9) mandates a three-fourths (75%) majority of weighted votes present and voting, rather than a two-thirds majority.

Step-by-Step Solution

1
Analyze Statement 1 regarding Article 269A of the Constitution of India.
Article 269A provides that GST on supplies in the course of inter-State trade or commerce (IGST) shall be levied and collected by the Government of India and apportioned between the Union and the States in the manner as provided by Parliament by law.
Statement 1 is factually and constitutionally correct.
2
Analyze Statement 2 regarding the voting threshold for decisions in the GST Council.
Under Article 279A(9), every decision of the Goods and Services Tax Council shall be taken at a meeting by a majority of not less than three-fourths (75%) of the weighted votes of the members present and voting, not two-thirds.
Statement 2 is incorrect due to the wrong majority ratio.
3
Analyze Statement 3 regarding vote weightage distribution in the GST Council.
Article 279A(9) specifies that the vote of the Central Government shall have a weightage of one-third of the total votes cast, and the votes of all State Governments taken together shall have a weightage of two-thirds of the total votes cast.
Statement 3 is factually and constitutionally correct.

Key Concept

Constitutional Provisions of GST and GST Council Architecture (Articles 269A and 279A)
Estimated Time:1m 30s
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Topics

Fiscal Policy, Union/State Budgeting, Public Finance, and Taxation Structure