Examine the impact of the 101st Amendment on the federal fiscal architecture of India.

Q. Examine the impact of the 101st Amendment on the federal fiscal architecture of India. (15 marks, 250-350 words)

The Constitution (101st Amendment) Act, 2016 introduced the Goods and Services Tax by inserting Articles 246A, 269A and 279A [1][2]. By replacing watertight Union–State tax lists with concurrent taxing power and a joint council, it marked the deepest restructuring of India's fiscal federalism since 1950 — though its gains in integration came with real costs to State autonomy.

Restructuring of taxing powers - Article 246A gives the Union and States concurrent power to tax supply of goods and services, dissolving the earlier goods (State) versus services (Centre) divide [2]. - Article 269A vests inter-State supply (IGST) with the Centre, with apportionment to States — creating a new category of shared tax. - States surrendered VAT, entry tax and octroi; the Centre gave up excise duties on most goods — a pooling of sovereignty rather than a one-way transfer.

Institutionalised cooperative federalism - The GST Council (Art. 279A) decides rates, exemptions and thresholds; the Centre holds one-third and all States together two-thirds of votes, with a three-fourths threshold to carry a proposal [3]. - In practice the Council works largely by consensus [3], and the Supreme Court in Union of India v. Mohit Minerals (2022) held its recommendations to be persuasive, not binding, restoring legislative space to States [4].

Frictions and unresolved gaps - The Centre's one-third weight functions as an effective veto, since no measure can pass against it. - Compensation for revenue loss was guaranteed only for five years, ending June 2022, exposing States to fiscal uncertainty [5]. - Petroleum, alcohol and electricity remain outside GST, narrowing the base and preserving fiscal fragmentation.

The 101st Amendment thus created a genuine "one nation, one tax" market while shifting Centre–State relations from competitive to bargained federalism. Its promise now depends on institutional maturity — transparent Council deliberation, timely dispute resolution as envisaged under Article 279A(11), and gradual inclusion of excluded goods. Guided by the Sixteenth Finance Commission's devolution framework [6], deepening trust within the Council can make GST a durable model of cooperative federalism.

(~330 words)

Sources: 1. Eight Constitution Amendments Enacted in the Last Twelve Years — Ministry of Law and Justice, PIB (25 July 2026) — 101st Amendment (2016) enacted for GST 2. The Constitution (122nd Amendment) (GST) Bill, 2014 — PRS Legislative Research — concurrent CGST/SGST power, IGST on inter-State supply, taxes subsumed 3. The GST Council — Goods and Services Tax Council (Article 279A) — composition, one-third/two-thirds weightage, three-fourths majority, consensus practice 4. Union of India v. M/s Mohit Minerals Pvt. Ltd., Supreme Court of India (19 May 2022) — GST Council recommendations are recommendatory, not binding 5. Centre Clears Entire GST Compensation Due Till Date — PIB, Ministry of Finance (2022) — five-year compensation guarantee and its expiry 6. Sixteenth Finance Commission, Volume I — Main Report (2026-31) — devolution framework for Centre-State fiscal transfers