Direct and Indirect Taxation · Introduction to GST Law

Overview and Constitutional Framework of GST for CMA Inter

Updated 10 October 2026 · Fact-checked

GST is a destination-based tax on supply of goods and services, levied at every stage with credit for tax paid earlier. The 101st Constitutional Amendment created a dual model: Centre and States both levy it, on a common base, under the CGST, SGST/UTGST and IGST Acts, guided by the GST Council.

Understand Overview and Constitutional Framework of GST

Goods and Services Tax (GST) is an indirect tax on the supply of goods or services. It replaced many separate taxes such as central excise duty, service tax and State VAT. Tax is charged at each stage of the supply chain, but a registered business can take credit for tax paid on its inputs. So the burden finally falls on the end consumer.

Before GST, the Constitution kept the powers separate. The Centre could tax manufacture and services. States could tax sale of goods. This caused tax on tax (cascading) and overlap. The 101st Constitutional Amendment Act, 2016 removed this split. It gave Parliament and State Legislatures concurrent power to make laws on GST. It inserted Article 246A for this, and Article 279A for the GST Council.

India follows a dual GST model. The Centre and the States both levy GST on the same transaction, on a common base. For an intra-State supply, the Centre levies CGST and the State levies SGST (a Union territory with legislature or without legislature levies UTGST). For an inter-State supply, including imports, the Centre levies IGST, and the tax is shared with the destination State.

The GST Council is a constitutional body under Article 279A. It is chaired by the Union Finance Minister. Its members are the Union Minister of State in charge of Revenue or Finance, and the Minister in charge of Finance or Taxation (or any other Minister nominated) of each State. It recommends on rates, exemptions, thresholds, model laws and special provisions for certain States. Its decisions are taken by a three-fourths majority of the weighted votes present and voting. The Centre has one-third of the weight and all States together have two-thirds.

The CGST Act, 2017 also tidies up the old law. Section 174 repeals the Central Excise Act, 1944 and the other listed excise Acts (except for goods in entry 84 of the Union List). It saves proceedings, liabilities and rights under the repealed Acts, so earlier cases continue as if the Acts were not repealed. Section 101A provides for a National Appellate Authority for Advance Ruling, with a President, a Technical Member (Centre) and a Technical Member (State), to hear appeals under section 101B.

Key rules to remember

Intra-State supply: GST = CGST + SGST (or UTGST); Both are normally levied at equal rates on the same value. The Centre collects CGST, the State or Union territory collects SGST/UTGST.
Inter-State supply and imports: GST = IGST; Levied and collected by the Centre under the IGST Act. The tax is apportioned to the destination State.
GST Council voting: Decision needs ≥ 3/4 of weighted votes of members present and voting; Centre = 1/3 weight, all States together = 2/3; The Centre alone cannot pass a decision, and the States alone cannot either.
Key constitutional provisions: 101st Amendment (2016): Article 246A (power to make GST laws), Article 279A (GST Council); Learn these article numbers with the amendment name.
Section 174, CGST Act: Repeal of listed excise Acts, with savings of past rights, liabilities and proceedings; The repeal does not revive anything not in force, and does not affect pending proceedings, which continue under the old Acts.
Section 101A, CGST Act: National Appellate Authority for Advance Ruling = President + Technical Member (Centre) + Technical Member (State); Constituted by the Government on the recommendation of the Council, for hearing appeals under section 101B.

How to solve Overview and Constitutional Framework of GST questions

Use this method for any theory question on the GST framework, from short notes to a 14-mark descriptive answer.

1Read the verb in the question: explain, discuss, distinguish or state. It decides the depth and layout.
2Open with a one-line definition of GST: destination-based tax on supply of goods and services with input credit.
3Link to the Constitution. Name the 101st Amendment and Articles 246A and 279A where relevant.
4Identify the supply type: intra-State means CGST plus SGST or UTGST; inter-State or import means IGST.
5For Council questions, cover composition, chair, voting and functions in that order.
6For Act-based questions, name the correct Act and, only if you are sure, the section number.
7Close with a short conclusion, such as the benefit of removing cascading or one common market.
8Use sub-headings or bullet points so the examiner can award marks for each point.

Quickest way: Four-line framework recall

When to use it: Use it for MCQs and short notes when you have only a few minutes.

Concept: one tax on supply, with credit at each stage.
Law: 101st Amendment, Article 246A (power) and Article 279A (Council).
Model: CGST + SGST/UTGST within a State; IGST between States.
Council: chaired by Union Finance Minister; three-fourths majority; Centre one-third, States two-thirds.

Common mistakes in Overview and Constitutional Framework of GST

Saying the Centre levies only IGST and States levy only SGST, so both never tax the same sale.
Students memorise the three names without linking them to the supply type.
Fix: On an intra-State supply, the Centre levies CGST and the State levies SGST on the same value. IGST applies only to inter-State supplies and imports.
Mixing up Article 246A and Article 279A.
Both numbers look alike and are introduced by the same Amendment.
Fix: Remember: 246A = power to legislate; 279A = Council (A for Authority to decide).
Stating the Council's voting as a simple majority or giving the Centre half the weight.
Students guess the usual majority rule.
Fix: Write three-fourths of weighted votes of members present and voting. Centre has one-third and the States together two-thirds.
Treating GST as a tax on the manufacturer or seller instead of on supply.
Old excise and VAT ideas carry over.
Fix: Write that the taxable event is supply. The burden is meant to fall on the final consumer through the credit chain.
Saying section 174 cancels all old liabilities and pending cases.
The word repeal suggests everything ends.
Fix: Say that section 174 repeals the Acts but saves rights, liabilities, duties due and pending proceedings, which continue as if the Acts were not repealed.

Worked examples

Example 1

Explain the dual GST model in India. State which taxes apply when a dealer in Pune sells goods to a buyer in Nashik, and when to a buyer in Chennai.

Show the solution

Define the dual model: the Centre and the States both levy GST on the same supply, on a common base, under the power given by the 101st Amendment (Article 246A).
Pune to Nashik: both are in Maharashtra, so it is an intra-State supply.
Taxes: CGST goes to the Centre and SGST goes to Maharashtra, normally at equal rates on the same value.
Pune to Chennai: the supply moves from Maharashtra to Tamil Nadu, so it is an inter-State supply.
Tax: IGST is levied and collected by the Centre, and the share goes to the destination State, Tamil Nadu.
Conclude that the buyer pays one combined GST in either case, but the components differ.

Answer: Pune to Nashik attracts CGST + SGST. Pune to Chennai attracts IGST.

Example 2

Discuss the composition of the GST Council and how it takes decisions. What are its main functions?

Show the solution

State that the Council is a constitutional body under Article 279A, inserted by the 101st Amendment.
Composition: Union Finance Minister as Chairperson; Union Minister of State in charge of Revenue or Finance; the Minister in charge of Finance or Taxation, or any other Minister nominated, of each State.
Voting: every decision needs at least three-fourths of the weighted votes of members present and voting.
Weight: the Centre has one-third of the votes and all States together have two-thirds.
Functions: it recommends on taxes to be subsumed, goods and services to be exempted, model GST laws, rates including floor rates, threshold limits and special provisions for certain States.
Conclude that this makes GST a cooperative federal decision, since neither side can decide alone.

Answer: The Council is chaired by the Union Finance Minister, includes the Union MoS and State Ministers, decides by three-fourths weighted majority (Centre 1/3, States 2/3), and recommends on rates, exemptions, thresholds and model laws.

Exam tips

MCQs often test article numbers, voting weights and which tax applies to which supply. Learn these as a fixed list.
In descriptive answers, write the 101st Amendment, Article 246A and Article 279A explicitly. Examiners look for these keywords.
Use a small two-column layout of CGST/SGST versus IGST in answers to distinguish the models. It earns clear step marks.
Quote section numbers only when sure. For Section 174 and Section 101A, focus on the content: repeal with savings, and the three-member appellate authority.
Attempt Section A first. There is no negative marking, so answer every MCQ.

Practice questions from Introduction to GST Law

Overview and Constitutional Framework of GST in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Overview and Constitutional Framework of GST: frequently asked questions

What is the 101st Constitutional Amendment in GST?

It is the 2016 amendment that enabled GST. It gave Parliament and State Legislatures concurrent power to make GST laws through Article 246A and created the GST Council under Article 279A.

What is the dual GST model in India?

Both the Centre and the States levy GST on the same supply. Within a State, CGST and SGST (or UTGST) apply. For inter-State supplies and imports, IGST applies.

Who is in the GST Council and how does it decide?

The Union Finance Minister chairs it. Members are the Union Minister of State for Revenue or Finance and each State's Minister in charge of Finance or Taxation. Decisions need three-fourths of the weighted votes present and voting.

What does section 174 of the CGST Act do?

It repeals the Central Excise Act, 1944 (except for goods in entry 84 of the Union List) and certain other excise Acts. It saves past rights, liabilities, dues and pending proceedings, which continue as if the Acts were not repealed.