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June 14, 2026
The Dispatch

Definition

GST Council

The GST Council is the constitutional body that decides the rates, exemptions and rules of GST through consensus between the Centre and the states.

Created under Article 279A, the GST Council is chaired by the Union Finance Minister with state finance ministers as members. It recommends tax rates, slab changes, exemptions, thresholds and administrative procedures, making it the central forum for cooperative federalism in indirect taxation.

Decisions require a weighted majority, with the Centre and states each holding defined voting shares, though the Council has historically worked largely by consensus. Its periodic meetings are closely tracked by businesses because they can reshuffle GST slabs, tweak the compensation cess and clarify contentious provisions.

Related terms

  • GST Compensation CessThe GST compensation cess is a levy on certain luxury and sin goods used to fund compensation to states for revenue losses arising from the move to GST.
  • GST SlabsGST slabs are the multiple tax-rate categories under GST into which goods and services are classified, ranging from nil-rated essentials to higher rates on luxury and sin goods.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.