Tax Laws and Practice · Basics of Goods and Services Tax

GST Model and Constitutional Framework Explained

Updated 11 October 2026 · Fact-checked

India follows a dual GST model: the Centre and the States both levy GST on the same supply. The Constitution (101st Amendment) Act, 2016 inserted Article 246A, which gives both powers to make GST laws, and Article 279A, which created the GST Council. CGST and SGST apply within a State; IGST applies to inter-State supplies.

Understand GST Model and Constitutional Framework

Before GST, the Constitution kept the taxing fields separate. The Centre could tax manufacture, services and inter-State sale (under the Central Sales Tax). The States could tax intra-State sale of goods. So one transaction faced several taxes, with tax on tax. GST replaced them with one tax on supply of goods or services.

India has a federal structure, so neither the Centre nor the States could, on their own, tax the whole chain of goods and services. The dual GST model solves this. Both levy GST on the same taxable supply, under their own laws, at the same time. That needed a constitutional amendment giving both concurrent powers.

The Constitution (101st Amendment) Act, 2016 did this. It inserted Article 246A, giving Parliament and State Legislatures concurrent power to make laws on GST. Under Article 246A(2), Parliament has exclusive power to make laws on GST where the supply of goods or services or both takes place in the course of inter-State trade or commerce. This is a constitutional provision, not a provision of the CGST Act. The amendment also inserted Article 279A, which provides for the GST Council, a joint forum of the Centre and the States, to recommend on GST matters such as rates, exemptions, model laws and thresholds.

The levies work like this. On an intra-State supply, the Centre charges CGST under the CGST Act and the State charges SGST under its own State GST Act. In a Union territory without a legislature, UTGST is charged in place of SGST. On an inter-State supply, the Centre charges IGST, and the tax is then shared with the destination State. This keeps tax credit flowing across State borders.

The CGST Act itself also shows the federal flavour in its machinery. For example, section 22 sets the registration threshold by turnover: ₹20 lakh for most States and ₹10 lakh for special category States, with a higher limit up to ₹40 lakh possible for suppliers exclusively of goods if notified. Section 101A provides the National Appellate Authority for Advance Ruling, which the Government constitutes by notification with effect from the date specified in it. Its President is a person who has been a Judge of the Supreme Court, or is or has been the Chief Justice of a High Court, or is or has been a Judge of a High Court for a period of not less than five years.

Key rules to remember

Intra-State supply: GST = CGST + SGST (or UTGST in a Union territory); Both are normally charged at equal rates. The Centre collects CGST and the State or UT collects SGST/UTGST.
Inter-State supply: GST = IGST; Levied by the Centre. Under Article 246A(2), Parliament has exclusive power to make laws on GST where the supply takes place in the course of inter-State trade or commerce.
Article 246A: Parliament and State Legislatures have power to make laws on GST; Inserted by the 101st Amendment. Under Article 246A(2), Parliament alone makes law on GST for supplies in the course of inter-State trade or commerce.
Article 279A: GST Council = Union Finance Minister (Chairperson) + Union Minister of State in charge of Revenue or Finance + State Ministers in charge of Finance or Taxation; Council recommends on rates, exemptions, thresholds, model laws, special provisions for some States. Its recommendations are the basis for notifications.
Registration threshold (section 22(1)): Aggregate turnover above ₹20 lakh in a financial year; ₹10 lakh for special category States; Government may enhance on Council recommendation: special category States up to ₹20 lakh; goods-only suppliers up to ₹40 lakh, as notified.
National Appellate Authority (section 101A): President + Technical Member (Centre) + Technical Member (State); Constituted by the Government, on the Council's recommendation, by notification with effect from the date specified in it, to hear appeals under section 101B. The President is a person who has been a Supreme Court Judge, or is or has been a High Court Chief Justice, or is or has been a High Court Judge for not less than five years. President's term: three years or till age 70, whichever is earlier. Technical Members: five years or till age 65, whichever is earlier.

How to solve GST Model and Constitutional Framework questions

Use this method for any question on the GST model, constitutional provisions or the types of GST.

1Read the question and mark what is asked: the model, an Article, the Council, or which tax applies.
2State the constitutional basis first: the 101st Amendment, Article 246A or Article 279A as relevant.
3Explain the dual model in one or two lines: the Centre and the States both levy GST on the same supply.
4If a transaction is given, decide whether the supply is intra-State or inter-State, using the location of supplier and place of supply.
5Name the tax: CGST + SGST (or UTGST) for intra-State; IGST for inter-State.
6Add the supporting provision, such as section 22 or section 101A, only if it is in the question's scope.
7Close with a one-line conclusion that answers the question directly.

Quickest way: Three-line answer for tax type questions

When to use it: Short questions asking which GST applies or why India has dual GST.

Write: India follows a dual GST model under Article 246A.
Decide location: same State or UT means CGST + SGST/UTGST; different State means IGST.
Add the Council line: rates and exemptions follow GST Council recommendations under Article 279A.

Common mistakes in GST Model and Constitutional Framework

Saying only the Centre or only the States levy GST.
Students think of GST as a single national tax.
Fix: Write that both levy GST concurrently on the same supply under the dual model, with IGST on inter-State supply levied by the Centre.
Mixing up Article 246A and Article 279A.
Both were inserted by the same Amendment and both relate to GST.
Fix: Remember 246A = power to legislate; 279A = GST Council.
Charging UTGST in every Union territory.
Students treat UTGST as applying to all UTs.
Fix: UTGST applies to Union territories without a legislature. Do not state it as applying to all UTs without that condition.
Applying CGST and SGST to an inter-State supply.
Students look at the supplier's State and ignore the place of supply.
Fix: Check both locations. If supplier and place of supply are in different States, charge IGST only.
Treating section 22 threshold as ₹20 lakh everywhere.
The base limit is remembered, the provisos are forgotten.
Fix: State ₹20 lakh generally, ₹10 lakh for special category States, and mention the enhancement power in the provisos.
Stating that GST Council decisions are made by simple majority.
Voting rules are half-remembered.
Fix: Describe the Council's functions confidently and mention voting only if you are sure of the exact weightage and quorum rules.

Worked examples

Example 1

Explain the dual GST model in India and the role of Article 246A and the GST Council. (Answer in ICSI style.)

Show the solution

Provision: The Constitution (101st Amendment) Act, 2016 introduced GST. Article 246A gives Parliament and State Legislatures concurrent power to make laws on GST. Under Article 246A(2), Parliament has exclusive power to make laws on GST where the supply of goods or services or both takes place in the course of inter-State trade or commerce.
Analysis: This is the dual model. The Centre levies CGST and the States levy SGST on intra-State supplies. Union territories without a legislature levy UTGST. Inter-State supplies attract IGST, levied by the Centre.
Institution: Article 279A provides for the GST Council, a joint forum of the Centre and the States. It is chaired by the Union Finance Minister and includes the Union Minister of State in charge of Revenue or Finance and State Ministers in charge of Finance or Taxation. It makes recommendations on rates, exemptions, thresholds and model laws.
Conclusion: Article 246A gives the legal power to tax and Article 279A gives a cooperative forum to keep the tax uniform across States.

Answer: India has a dual GST model under Article 246A, with CGST and SGST/UTGST on intra-State supplies and IGST on inter-State supplies. The GST Council under Article 279A recommends on rates, exemptions and related matters.

Example 2

Sharma Traders of Jaipur (Rajasthan) sells goods worth ₹1,00,000 to a buyer in Jaipur and goods worth ₹2,00,000 to a buyer in Surat (Gujarat), with delivery in Surat. Which GST applies to each sale?

Show the solution

Sale 1: Supplier in Rajasthan, place of supply in Rajasthan. The supply is intra-State.
Tax on sale 1: CGST (levied by the Centre) and SGST (levied by Rajasthan).
Sale 2: Supplier in Rajasthan, place of supply in Gujarat. The supply is inter-State.
Tax on sale 2: IGST, levied by the Centre. It is then apportioned to Gujarat as the destination State.
Conclusion: Different taxes apply because the location of the supplier and the place of supply differ.

Answer: Sale to the Jaipur buyer attracts CGST + SGST. Sale to the Surat buyer attracts IGST.

Exam tips

In theory answers, begin with the constitutional source: 101st Amendment, then Article 246A, then Article 279A.
Learn the Council's composition as a short list. Examiners often ask for it in a few lines.
Use a short table-like list in your answer sheet: tax, who levies, when it applies.
If a question quotes section 22 or section 101A, use the exact figures and terms from the Act, such as ₹20 lakh, ₹10 lakh and ₹40 lakh.
End every answer with a clear one-line conclusion.

Practice questions from Basics of Goods and Services Tax

GST Model and Constitutional Framework in other exams

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

GST Model and Constitutional Framework: frequently asked questions

What is the dual GST model?

Under the dual model, both the Centre and the States levy GST on the same supply. On intra-State supplies, CGST and SGST (or UTGST) apply. On inter-State supplies, the Centre levies IGST.

What did the 101st Constitutional Amendment do?

The Constitution (101st Amendment) Act, 2016 introduced GST. It inserted Article 246A for the power to make GST laws and Article 279A for the GST Council, among other changes.

What is the difference between CGST, SGST and IGST?

CGST is the Centre's tax on intra-State supply, and SGST is the State's tax on the same supply. IGST is levied by the Centre on inter-State supply and is shared with the destination State.

What does the GST Council do?

The GST Council is a joint forum of the Centre and the States under Article 279A. It makes recommendations on matters such as rates, exemptions, thresholds and model laws. The Government acts on its recommendations, for example under section 22 and section 101A of the CGST Act.