How India replaced a patchwork of indirect taxes with a single, unified tax — and who decides its rates.
The Goods and Services Tax, rolled out on 1 July 2017 via the 101st Constitutional Amendment Act (2016), subsumed a host of indirect taxes previously levied separately by the Union and States — Central Excise Duty, Service Tax, VAT, Octroi, Entry Tax, and others — into a single, destination-based tax on the supply of goods and services.
Article 279A (inserted by the 101st Amendment) established the GST Council, chaired by the Union Finance Minister, with State Finance Ministers as members. It decides GST rates, exemptions, and administrative rules — widely cited as India's leading example of cooperative federalism in fiscal policy.
GST is levied as CGST (Central) and SGST (State) on intra-state supply, and as IGST (Integrated GST, collected by the Centre and apportioned) on inter-state supply. Most goods and services fall into rate slabs (commonly 5%, 12%, 18%, 28%, with some items outside GST entirely, like petroleum and alcohol for human consumption).
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