"The GST Council is an experiment in cooperative federalism." Evaluate this in light of the shift to Next-Gen GST.

Set up under Article 279A in 2016, the GST Council is a joint forum of the Centre and the States. It is chaired by the Union Finance Minister and has the Finance Minister of every State as a member [1]. The move to Next-Gen GST shows that the Council's model of shared decision-making works, but it also shows where that model is limited.

Cooperative federalism at work

• Pooled sovereignty: At the 56th meeting, the Centre and the States together cut the four slabs to two rates (5% and 18%), plus a 40% demerit rate [2]. The PM noted that the Council, "comprising the Union and the States", had collectively agreed to the reform [3].
• Weighted voting: A decision needs a three-fourths majority. The Centre holds one-third of the votes and the States together hold two-thirds, so neither side can impose its will alone [4].
• Joint reform of procedures: The 48th meeting raised the prosecution threshold from ₹1 crore to ₹2 crore and decriminalised minor offences [5]. Later rounds added risk-based 90% provisional refunds [2] and, in 2026, recommended removing arrest provisions to move towards trust-based administration [6].
• Judicial endorsement: In Mohit Minerals (2022), the Supreme Court described the Council's recommendations as the result of collaborative dialogue between the Union and the States [4].

Limits of the experiment

• Uneven voting power: The Centre's one-third share works as an effective veto. The States cannot pass anything without the Centre, even acting together [4].
• Loss of fiscal autonomy: The States gave up most of their independent taxes when GST came in. Rate cuts under Next-Gen GST therefore raise revenue-loss concerns for States that have few other tax levers.
• Recommendations are not binding: Council recommendations are persuasive, not binding, on Parliament and the State legislatures [4]. Because Article 246A gives both levels the power to make GST law [7], removing arrest provisions needs CGST and SGST amendments made in step. If States do not follow, the rules could differ from State to State.
• Decision by consensus: Most decisions are reached by consensus rather than formal votes. This hides disagreements instead of settling them.

On balance, the Council is a working but unfinished experiment. It has delivered major joint reforms, but cooperation still depends on bargaining between a dominant Centre and dependent States. A permanent dispute-settlement mechanism under Article 279A(11), assured protection for State revenue and SGST amendments made in step with the Centre would strengthen it. That would make the Council a lasting example of the cooperative federalism the Supreme Court recognised in Mohit Minerals.