Why this matters now
The 101st Amendment is the most tested amendment in UPSC GS-2 and GS-3 (both indirect-tax policy and federalism). Its key innovations: (1) creating the concurrent power to tax goods AND services for both Centre and States via Article 246A; (2) the GST Council (Article 279A) — the first true cooperative-federal body in tax policy.
Context: 13 years in the making (2003-16)
The Kelkar Task Force first recommended GST in 2003. The Empowered Committee of State Finance Ministers under Asim Dasgupta (West Bengal) developed the design from 2007. The first Constitutional Amendment Bill was introduced in 2011 by Pranab Mukherjee but lapsed. PM Modi’s government reintroduced it in 2014; after extensive negotiation with states (and the Congress-led opposition’s consent), the 122nd CAB passed both Houses in Aug 2016. 16 states ratified it within 23 days — the fastest ever for a CAB requiring state ratification.
Key changes
| Article | Change |
|---|---|
| Article 246A | NEW — concurrent power to levy GST on intra-state supplies (Centre + State each); Centre has exclusive power on inter-state supplies (IGST). Petroleum products, tobacco, alcohol initially excluded. |
| Article 269A | NEW — IGST on inter-state trade levied by Centre; apportioned to Centre + States as per GST Council recommendation. |
| Article 279A | NEW — GST Council: PM-nominated Union FM as Chairperson, Union MoS Finance, all state FMs/Ministers nominated by states. Decision by 3/4 majority (Centre 1/3, States 2/3 weight). |
| Article 366(12A) | Definition of GST. |
| Schedule VII | Many State entries (excise on services, octroi, entertainment tax, luxury tax, VAT on goods except petroleum/alcohol, etc.) replaced. |
| Compensation | 5-year compensation to states for revenue loss (initially Compensation Cess till 2022; extended to repay borrowing till 31 March 2026). |
GST in practice (since 1 July 2017)
Dual GST structure: CGST (Centre) + SGST (State) on intra-state, IGST on inter-state. Tax slabs: 0%, 5%, 12%, 18%, 28% (+ cess on luxury & sin goods). Subsumed: Central Excise, Service Tax, VAT, Octroi, Entry Tax, Entertainment Tax (most states), Luxury Tax, CST, etc. Petroleum products (crude/petrol/diesel/ATF/natural gas), alcohol for human consumption, and electricity remain outside GST as of 2026 — states’ main revenue cushion.
UPSC angle
Know 101st Amendment 2016 — Goods & Services Tax, came into force 16 Sept 2016 (GST rolled out 1 July 2017); Article 246A concurrent GST power (Centre & State, intra-state) & Centre exclusive on inter-state (IGST); Article 269A IGST apportionment; Article 279A GST Council (Union FM Chair, 3/4 majority decision, Centre 1/3 + States 2/3 weight); 16 states ratified in 23 days; dual GST (CGST + SGST + IGST); 5 slabs 0/5/12/18/28% + cess; petroleum, alcohol, electricity outside GST.
Frequently asked questions
What did the 101st Amendment enable?
It enabled the Goods and Services Tax (GST) by giving both Centre and States concurrent power to tax goods and services under Article 246A.
What is the GST Council?
A constitutional body under Article 279A — Chair: Union FM; members: Union MoS Finance + state FMs nominated by states; decisions by 3/4 majority (Centre 1/3 weight, States 2/3).
Which goods are outside GST?
Petroleum products (crude, petrol, diesel, ATF, natural gas), alcohol for human consumption, and electricity.
When did GST come into effect?
The constitutional amendment effective 16 September 2016; GST rolled out on 1 July 2017.