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SSC CGL Polity · Indian Constitution — Making, Foundation and Amendments

Centre-State Finance and GST

Who may make GST laws, how the GST Council votes, and the Articles that decide who levies, collects and keeps each tax, plus the Finance Commission and State borrowing.

All Indian Constitution — Making, Foundation and Amendments notes

Why this matters

Eleven questions in the bank, and ten of them come from the 2025 shifts; ten are MODERATE or HARD. They are Article-number questions with statements that swap the Union and the States, so learn each Article as who levies, who collects and who keeps.

Concept 1 of 2: GST and the GST Council

GST is the one tax both Parliament and the States make laws on, so it needed a shared council. Learn who may legislate and how the Council's votes are weighted: the Centre holds one-third, the States two-thirds.

Definition

The 101st Amendment (2016) brought in GST:

  • Article 246A: both Parliament and the State legislatures may make laws on GST. The States legislate on supply within the State; inter-State supply is for Parliament alone.
  • Article 279A: the GST Council, a constitutional body of the Union Finance Minister and the States' finance ministers.
  • Voting (279A(9)): a decision needs three-fourths of the weighted votes of members present and voting. The Centre's vote weighs one-third and all the States together two-thirds, so the States together weigh twice the Centre.
  • The Council's recommendations are persuasive, not binding (Supreme Court, 2022).
RuleAnswer
Who may make GST lawsParliament and the State legislatures (Art 246A)Q
GST Council created byArticle 279AQ
Majority for a decisionThree-fourths of weighted votes
Weight of votesCentre one-third, States two-thirdsQ
Are its recommendations binding?No, persuasiveQ
Practice this conceptself-check · 4 quick reps

The same idea in a real exam question:

SSC CGL · 2025 · Tier I, 13 Sep 2025, Shift 2 · Q39Moderate

Example 1 · Indian Constitution — Making, Foundation and Amendments · Centre-State Finance and GST

As per Article 279A of the Indian Constitution, the GST Council's decisions require what kind of majority of the weighted votes of the members present and voting?

Article 246A is shared, not exclusive

A statement that Article 246A gives Parliament exclusive power over GST is false. The States legislate on supply within the State.
Drill 4 more on gst and the gst council

Concept 2 of 2: Who levies, collects and keeps each tax

Each tax Article answers three questions: who imposes the tax, who collects it, and who keeps the money. Learn the few Articles SSC asks about by those three answers.

Definition

The Articles:

  • Article 268: duties levied by the Union but collected and kept by the States: the stamp duties in the Union List.
  • Article 270: taxes levied and collected by the Union and shared with the States. Since the 101st Amendment it covers GST collected by the Union too. Cesses and surcharges for a special purpose, such as the GST compensation cess, are not shared under it.
  • Taxes on railway fares and freights go to the Union.
  • Article 286: limits a State's power to tax sales that happen outside the State or in the course of import or export.
  • Article 293: a State may borrow only within India, and needs the Centre's consent while it still owes the Centre money. Foreign loans for States come only through or with the Union's approval.

Finance Commission: a chairman and four members. Article 280 sets it up; Article 281 lays its recommendations before Parliament. Its advice is not binding.

ArticleSubject
268Union levies, States collect and keep (stamp duties)
270Union taxes shared with States, including GSTQ
280Finance Commission set upQ
286Limits on State taxes on inter-State tradeQ
293State borrowingQ
Practice this conceptself-check · 4 quick reps

The same idea in a real exam question:

SSC CGL · 2025 · Tier I, 16 Sep 2025, Shift 3 · Q42Moderate

Example 2 · Indian Constitution — Making, Foundation and Amendments · Centre-State Finance and GST

What does Article 268 of the Indian Constitution primarily deal with?

Article 280 sets up, 281 reports

Article 280 constitutes the Finance Commission; its recommendations are dealt with in Article 281. A statement that 280 is about the recommendations is false.
Drill 5 more on who levies, collects and keeps each tax

Summary — formulas & gotchas at a glance

A revision cheat-sheet for the formulas and gotchas above. Click any concept name to jump back to its full explanation.

Reference tables (2)

GST and the GST Council5 rows
RuleAnswer
Who may make GST lawsParliament and the State legislatures (Art 246A)Q
GST Council created byArticle 279AQ
Majority for a decisionThree-fourths of weighted votes
Weight of votesCentre one-third, States two-thirdsQ
Are its recommendations binding?No, persuasiveQ
Who levies, collects and keeps each tax5 rows
ArticleSubject
268Union levies, States collect and keep (stamp duties)
270Union taxes shared with States, including GSTQ
280Finance Commission set upQ
286Limits on State taxes on inter-State tradeQ
293State borrowingQ

Watch out for (2)

Test yourself on Indian Constitution — Making, Foundation and Amendments

20 past SSC CGL questions from this chapter, timed at 12 minutes and marked the way the exam marks it. You see your score and every answer the moment you finish. Free to start.

Take the Indian Constitution — Making, Foundation and Amendments chapter testDrill all 11 questions