Question

Consider the following statements regarding the 101st Constitutional Amendment (GST):

1. The 101st Amendment introduced Article 246A, empowering both Parliament and State Legislatures to levy GST.

2. Article 268A was repealed to facilitate the introduction of integrated GST on inter-state transactions.

3. The GST Council was established under Article 279A by a Presidential Order.

4. The 101st Amendment was passed by the Lok Sabha before the Rajya Sabha.

• A. 1, 2, and 3 are correct
• B. 1, 2, and 4 are correct
• C. 2, 3, and 4 are correct
• D. 1, 3, and 4 are correct

Answer 1

Answer:

A. 1, 2, and 3 are correct

101st Constitutional Amendment Act, 2016 (Goods and Services Tax - GST)

• Introduction of Article 246A: This article grants concurrent powers to the Parliament and State Legislatures to make laws with respect to Goods and Services Tax (GST). This was a significant shift from the previous indirect tax regime where states had limited powers to tax services and the Centre had limited powers to tax certain goods.
• Repeal of Article 268A: Article 268A, which dealt with taxes levied and collected by the Union but distributed between the Union and the States, was repealed. This was necessary to pave the way for a unified GST system, particularly the Integrated Goods and Services Tax (IGST) on inter-state supply of goods and services.
• Establishment of the GST Council: Article 279A was inserted to establish the GST Council. This council is a constitutional body responsible for making recommendations on GST rates, exemptions, and other related issues. It is chaired by the Union Finance Minister and includes State Finance Ministers as members.
• Presidential Order vs. Parliamentary Act: The GST Council was established by a Presidential Order as per Article 279A. This is a crucial detail for competitive exams, as it's not directly established by the amendment act itself, but through an executive order based on the constitutional provision.
• Parliamentary Procedure: The 101st Amendment Bill was first passed by the Rajya Sabha (Upper House) on August 3, 2016, and then by the Lok Sabha (Lower House) on August 8, 2016. This order of passage is important for understanding the legislative process.
• Key Objective of GST: The primary aim of GST is to create a single, unified market by subsuming various indirect taxes like excise duty, service tax, VAT, etc., thereby reducing cascading effects of taxes and improving ease of doing business.
• Impact on Federal Structure: The GST regime signifies a cooperative federalism approach, where both the Union and the States share fiscal powers, with the GST Council acting as a forum for consensus building.