GST - From Consensus to Voting - Cooperative Federalism at Work?
AS per the present constitution, decisions of the GST Council will need support of 3/4th of the weighted votes. This was not as originally proposed. In the Constitution (115th Amendment) Bill presented to Lok Sabha in 2011 provided for a consensus and not voting. Article 279A(8) proposed;
Every decision of the Goods and Services Tax Council taken at a meeting shall be with the consensus of all the members present at the meeting.
So, unanimity was constitutionally sought to be mandated. But the Select Committee, to which the Bill was referred, observed,
9. The Committee note that the decisions in the GST Council, would be taken, based on consensus which implies that all the members present would have to agree to a proposal; even if one State differs, the decision cannot be passed. The Committee feel that keeping in view the diversity in socio-economic interests of the States, achieving such a consensus is likely to be very difficult. As it would be critical in ensuring that all the valid interests are properly reflected in the recommendations of the GST Council, the Committee would therefore recommend amendments to Clause (8) of Article 279A so as to provide for voting instead of consensus for decisions of the GST Council. Accordingly, as agreed upon by the Empowered Committee, one-third weightage for central representatives and two-thirds weightage for state representatives may be provided with the decision taken by the Council being passed with more than three fourths votes of the representatives present in the meeting. Similarly, amendment to Clause (6) of Article 279A may also be made for increasing the quorum to half from the proposed one-third. In this context, the Committee would recommend that in tune with the spirit of cooperative federalism, it would be in order if the proposed GST Council functions like the present Empowered Committee, which has had a good track record of not only reforming the tax system but also resolving differences amicably in an institutional mode.
That is how the complicated looking formula got into GST!