BharatNotes What is Cooperative Federalism (GST Council)?
Cooperative federalism describes a relationship in which the Union and the States function as partners — consulting, coordinating and jointly deciding on matters of common concern — rather than as rivals in separate jurisdictions. The GST Council, created under Article 279A by the 101st Constitutional Amendment Act, 2016, is the most concrete institutional expression of this idea. Through it, both tiers surrendered a slice of their individual taxation powers and agreed to exercise them jointly, pooling fiscal sovereignty into a single national market for goods and services from 1 July 2017.
Constitutional and Structural Basis
GST rests on three linked articles. Article 246A grants Parliament and State Legislatures concurrent power to levy GST. Article 269A governs taxation of inter-State supply (IGST). Article 279A establishes the Council itself.
| Feature | Detail |
|---|---|
| Chairperson | Union Finance Minister |
| Members | Union MoS (Revenue/Finance) + one Minister from each State/UT with legislature |
| Total members | 33 (2 Centre + 31 States/UTs), as of June 2026 |
| Quorum | One-half of total members [Art. 279A(7)] |
| Voting weightage | Centre one-third; all States together two-thirds |
| Decision threshold | Three-fourths majority of weighted votes present and voting |
This formula is deliberately designed so that neither the Centre alone nor the States alone can carry a decision — both sides must cooperate, embedding consensus into the structure.
Why It Embodies Cooperative Federalism
The Council pools sovereignty: the Centre cannot unilaterally fix rates, and no single State can either. Decisions on rates, exemptions, threshold limits and model laws emerge from collective bargaining. Article 279A(11) even directs the Council to set up a mechanism to resolve disputes between governments.
A crucial clarification came in Union of India v. Mohit Minerals (Supreme Court, 19 May 2022): the Court held that GST Council recommendations are persuasive, not binding on Parliament or State Legislatures. The bench reasoned that Article 246A confers equal legislative power on both tiers and that treating recommendations as binding would undermine fiscal federalism. This reframed the Council as a deliberative, consultative forum rather than a supra-legislative authority.
Current Status
GST governance continues to evolve. At its 56th meeting (New Delhi, 3 September 2025), the Council approved a major rate rationalisation — "GST 2.0" — moving towards a two-slab structure of 5% and 18% (removing the 12% and 28% slabs) with a separate higher rate for select sin and luxury goods. Most revised rates took effect from 22 September 2025. The reform was a notable test of consensus-building among States with differing revenue concerns.
UPSC Angle
Treat the GST Council as the model answer whenever a question asks for a working example of cooperative federalism. Master the exact voting arithmetic for Prelims. For Mains, argue both sides: GST shows pooled-sovereignty cooperation, yet critics cite the Centre's structural one-third weight, the lapse of compensation transfers, and Mohit Minerals to argue the reality is closer to bargaining or competitive federalism. Foundation concept — underpins recurring questions on federalism, finance commission, and Centre-State relations.
