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

With reference to the constitutional architecture of the Goods and Services Tax (GST) Council in Indian Public Finance, examine the following statements:

1. The GST Council is a joint constitutional forum established under Article 279A of the Constitution of India.
2. Decisions of the Council must be taken by a majority of not less than three-fourths (75%75\%) of the weighted votes of the members present and voting.
3. The vote of the Central Government carries a weightage of one-third (13\frac{1}{3}) of the total votes cast, while the combined votes of all State Governments carry a weightage of two-thirds (23\frac{2}{3}).

Which of the statements given above are correct?

  1. A
    1 and 2 only
  2. B
    2 and 3 only
  3. C
    1 and 3 only
  4. 1, 2 and 3Answer

Answer

All three statements (1, 2, and 3) are correct.
The choice stating '1, 2 and 3' is correct because all three statements accurately reflect the provisions of Article 279A of the Constitution of India. The GST Council is a constitutional body (Article 279A(1)), requires a three-fourths (75%) weighted majority for decisions (Article 279A(9)), and splits vote weightage as one-third for the Centre and two-thirds for all States combined.

Step-by-Step Solution

1
Evaluate Statement 1 regarding the constitutional basis of the GST Council.
Statement 1 is correct. The GST Council was inserted into the Indian Constitution via the 101st Constitutional Amendment Act, 2016 under Article 279A.
Article 279A empowers the President to constitute the Goods and Services Tax Council as a joint forum of the Centre and the States.
2
Evaluate Statement 2 regarding the decision-making voting threshold.
Statement 2 is correct. Article 279A(9) stipulates that every decision of the Council shall be taken at a meeting by a majority of not less than three-fourths (75%75\%) of the weighted votes of the members present and voting.
This high threshold promotes cooperative federalism, ensuring neither the Centre nor a small group of states can unilaterally impose decisions.
3
Evaluate Statement 3 regarding vote weightage allocation.
Statement 3 is correct. Under Article 279A(9), the vote of the Central Government has a weightage of one-third (13\frac{1}{3}) of the total votes cast, and the votes of all State Governments combined have a weightage of two-thirds (23\frac{2}{3}) of the total votes cast.
This distribution ensures that neither the Centre nor the States alone can pass a decision without substantial consensus from both tiers of government.

Key Concept

Constitutional Mechanism and Voting Architecture of the GST Council (Article 279A)
Estimated Time:1m 0s
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Topics

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