Which Constitutional amendment introduced the Goods and Services Tax (GST) and significantly impacted the financial relations between the Centre and States?

A100th Amendment

B101st Amendment

C122nd Amendment

D124th Amendment

Answer:

Purpose: The 101st Amendment Act paved the way for the introduction of the Goods and Services Tax (GST) in India, completely transforming the country's indirect tax structure.
Effective Date: Though the amendment was enacted in 2016, GST was officially launched nationwide on July 1, 2017.
Legislative Background: It was introduced in Parliament as the 122nd Constitution Amendment Bill, 2014 before receiving the President's assent on September 8, 2016.

Article 246A (Concurrent Powers): Grants simultaneous power to both the Parliament and State Legislatures to make laws regarding GST. However, the Parliament retains exclusive power to legislate on inter-State trade and commerce.
Article 269A (Inter-State Trade): Governs the levy and collection of GST on inter-state trade or commerce (Integrated GST or IGST). This tax is collected by the Union and apportioned between the Union and the States based on the recommendations of the GST Council.
Article 279A (GST Council): Empowered the President of India to constitute a joint forum of the Centre and the States known as the GST Council.

Composition:
- Chairperson: The Union Finance Minister.
- Members: The Union Minister of State in charge of Revenue/Finance, and the Finance or Taxation Ministers of all State Governments.
Voting Mechanism: Decisions in the GST Council require a three-fourths (75%) majority of the weighted votes of the members present and voting. The Central Government has a weightage of one-third (33.33%), while all State Governments combined hold a weightage of two-thirds (66.67%).

Central Taxes Subsumed: Central Excise Duty, Service Tax, Additional Duties of Excise & Customs, and Central Surcharges and Cesses.
State Taxes Subsumed: State VAT/Sales Tax, Central Sales Tax, Luxury Tax, Entertainment Tax (except those levied by local bodies), Entry Tax, and Octroi.

Alcoholic Liquor for Human Consumption: Kept completely outside the purview of GST; states continue to levy State Excise Duty and VAT on it.
Petroleum Products: Five petroleum products (crude oil, high-speed diesel, motor spirit/petrol, natural gas, and aviation turbine fuel) are temporarily excluded and will be taxed under GST only from a date recommended by the GST Council.

Destination-Based Tax: GST is a destination-based consumption tax. This means the tax revenue goes to the consuming state rather than the manufacturing (origin) state.
Compensation to States: To address potential revenue shortfalls for manufacturing states, the GST (Compensation to States) Act, 2017 was enacted, promising financial compensation to states for five years.

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