GK Question

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Disagreements between the Union and States in the GST Council often relate to tax rates, compensation for revenue loss, and the ______ of certain items under GST slabs.

  1. classification
  2. exemption
  3. valuation
  4. all of the above

Answer: all of the above

GST Council functioning challenges: (a) Tax rates: States vs Centre disagreements on optimal rates for revenue vs growth, (b) Compensation: States demanded continuation of revenue guarantee post-2022; Centre cited fiscal constraints, (c) Classification: Whether items fall under 5%, 12%, 18%, 28% slabs affects revenue distribution, (d) Exemptions: Pressure to exempt essential items vs broaden tax base. Council decisions require 3/4 majority (Union 1/3 vote weight, States 2/3); consensus-building essential but challenging. Exemplifies cooperative federalism in practice with inherent tensions.

Topic Federalism - GST Council Disputes
Exam Relevance Fiscal federalism operational challenges question for UPSC Mains and Economics-Polity overlap exams
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