The provision Article 279A(4)(e) is a specific provision of the Indian Constitution that defines one of the core functions of the Goods and Services Tax (GST) Council. It mandates that the GST Council shall make recommendations to the Union and the States on "the rates, including floor rates with bands of goods and services tax".
This article originated with the introduction of the GST regime, being inserted into the Constitution by the Constitution (One Hundred and First Amendment) Act, 2016. The amendment was enacted to solve the problem of a complex, fragmented indirect tax system by creating a unified national market and institutionalizing cooperative federalism in tax policy. The President was required to constitute the GST Council within 60 days of the Amendment's commencement.
The provision works by empowering the GST Council—a constitutional body chaired by the Union Finance Minister and including State Finance Ministers—to determine the actual tax rates. The phrase "floor rates with bands" allows the Council to set a minimum rate and a range for the tax, ensuring a degree of uniformity while permitting minor adjustments. Any decision under this provision requires a three-fourths majority of weighted votes, where the Centre holds one-third of the weight and the States collectively hold two-thirds.
Article 279A(4)(e) is intrinsically connected to the GST Council and the Constitution (One Hundred and First Amendment) Act, 2016. An informed reader should also know the Supreme Court's clarification in Union of India v. Mohit Minerals Pvt. Ltd. (2022), which held that the recommendations of the GST Council, including those on rates, are not legally binding on the Union and States but possess persuasive value. The core text of sub-clause (4)(e) has not been recently amended since its insertion in 2016.