BharatNotes What is GST Council and Slabs?
The GST Council is a constitutional body created under Article 279A, which was inserted by the 101st Constitutional Amendment Act, 2016 (in force from September 2016). It is the apex decision-making forum that recommends GST rates, exemptions, threshold limits, model laws, and special provisions to both the Union and the States. GST itself was launched on 1 July 2017, subsuming a large number of central and state indirect taxes into one tax.
"Slabs" refer to the tiered rate structure under which goods and services are taxed. The original regime used four principal rates (5%, 12%, 18%, 28%), alongside a 0% category for essentials/exempt items and a compensation cess on demerit goods.
Composition and Voting
The Council is designed to embody cooperative federalism — neither the Centre nor the States can act alone.
| Feature | Provision (Article 279A) |
|---|---|
| Chairperson | Union Finance Minister |
| Members | Union Minister of State (Revenue/Finance) + one Minister from each State |
| Quorum | Half of total members |
| Voting majority | At least three-fourths of weighted votes present and voting |
| Centre's weightage | One-third of total votes cast |
| States' weightage | Two-thirds of total votes cast (jointly) |
This weighting ensures the Centre cannot push decisions through without substantial state support, and States cannot override the Centre.
GST 2.0: The New Slab Structure (2025)
At its 56th meeting on 3 September 2025, the Council approved a sweeping rate rationalisation popularly called GST 2.0, effective 22 September 2025. The earlier 12% and 28% slabs were largely removed, with items reassigned to a simplified structure:
- 5% — merit/essential goods and services
- 18% — standard rate (most goods and services)
- 40% — a special demerit rate for select sin and luxury goods (e.g., tobacco products, aerated/carbonated beverages, high-end vehicles)
- 0%/exempt — essentials such as milk, paneer and certain food items
Many everyday goods — small cars, motorcycles up to 350cc, several appliances, processed foods and dairy — moved to lower brackets to ease the consumer burden.
Significance and the Federalism Angle
A landmark constitutional point came in Union of India v. Mohit Minerals (Supreme Court, 19 May 2022): the Court held that the recommendations of the GST Council are not binding on the Union or State legislatures — they have only persuasive value, since both Parliament and State legislatures hold concurrent power to legislate on GST. This reinforced fiscal federalism, treating the Council as a forum for collaborative dialogue rather than a body issuing binding mandates.
UPSC Angle
For Prelims, lock in the precise factual anchors: Article 279A, the 101st Amendment, the Finance Minister as chair, the half-member quorum, and the one-third/two-thirds weighted voting with a three-fourths majority. For Mains, the richer material lies in evaluating the Council as an instrument of cooperative versus competitive federalism, the implications of the Mohit Minerals ruling, and the rationale and equity effects of the 2025 two-slab rationalisation on revenue and consumers.
