The Finance Commission is a constitutional body that determines revenue sharing between the central and state governments in India. It is appointed by the President every five years. The Commission consists of a chairman and four members who are qualified in finance, administration or economics. The Commission makes recommendations on distributing tax proceeds, principles for grants to states, and other financial matters. State governments also have Finance Commissions that determine resource allocation to local governments. The GST Council is the apex policymaking body for goods and services tax. It is chaired by the Union Finance Minister and includes state government ministers. The Council makes decisions to ensure a uniform tax system across India.

1. CONSTITUTIONAL LAW
FINANCIAL COMMISSION AND GST COUNCIL

2. FINANCIAL COMMISSION
• The Finance Commission is a constitutional body, that determines the method and formula for
distributing the tax proceeds between the Centre and states, and among the states as per the
constitutional arrangement and present requirements.
• Under Article 280 of the Constitution, the President of India is required to constitute a Finance
Commission at an interval of five years or earlier.
• The Finance Commission has a chairman and four members appointed by the President. The
government of India provides necessary support and manpower including a secretary to the
commission to facilitate its work.
• President after two years of the commencement of Indian Constitution and thereafter every 5
years, has to constitute a Finance Commission of India.

3. DUTIES
• It shall be the duty of the Commission to make recommendations to the
President in relation to the:
• The distribution between the Union and the States of the net proceeds of taxes which are
to be, or maybe, divided between them and the allocation between the States of the
respective shares of such proceeds;
• The principles which should govern the grants in aid of the revenues of the States out of
the Consolidated Fund of India;
• Any other matter referred to the Commission by the President in the interests of sound
finance
• The Commission shall determine their procedure and shall have such powers in the
performance of their functions as Parliament may by law confer on them.
President can also constitute Finance Commission before the expiry of five
years as he considers necessary.

4. COMPOSITION OF FINANCE COMMISSION
• Chairman: Heads the Commission and presides over the activities. He should have had public
affairs experience.
• Four Members: Appointed by President.
• The Parliament determines legally the qualifications of the members of the Commission and their
selection methods.
• QUALIFICATIONS
• Should be or have been qualified as High Court judges, or be knowledgeable in finance or
experienced in financial matters and are in administration, or possess knowledge in economics.
• The tenure of the office of the Member of the Finance Commission is specified by the President of
India and in some cases, the members are also re-appointed.
• The members shall give part-time or service to the Commission as scheduled by the President.

5. FUNCTIONS OF FINANCE COMMISSION
1) Tax proceeds distribution to be divided between the centre and the states, and the allocation of
the same between states.
2) The principles governing the grants-in-aid to the states by the Centre out of the consolidated
fund of India.
3) Extend the consolidated fund of a state to boost the resources of the panchayats and the
municipalities of the state on the basis of the recommendations made by the state finance
commission.
4) The FC evaluates the rise in the Consolidated Fund of a state in order to affix the resources of
the state Panchayats and Municipalities.
5) As per the Code of Civil Procedure 1908, the FC has all the powers of a Civil Court. It can call
witnesses, ask for the production of a public document or record from any office or court.
6) Any other matter referred to it by the president in the interests of sound finance.

6. STATE FINANCE COMMISSIONS
• The 73rd Constitutional Amendment Act of 1992 created the Panchayati Raj
institutions as the third level of a three-tier democratic governance system at the village
level, intermediate level and district level. It also mandated the constitution of a
Finance Commission every five years by state governments to decide the division of
resources (tax proceeds) between a state government and Panchayati Raj institutions at
all levels.
Advisory Role of Finance Commission of India
• The recommendations made by the Finance Commission are of an advisory nature only
and therefore, not binding upon the government. It is up to the Government to
implement its recommendations on granting money to the states.

7. Article 279A: GST Council
• This Article gives power to the President to constitute a joint forum of the Centre
and States called the GST Council. The GST Council is an apex member
committee to modify, reconcile or to procure any law or regulation based on the
context of Goods and Services Tax in India.
• The GST council is the key decision-making body that will take all important
decisions regarding the GST. The GST Council dictates tax rate, tax exemption,
the due date of forms, tax laws, and tax deadlines, keeping in mind special rates
and provisions for some states. The predominant responsibility of the GST
Council is to ensure to have one uniform tax rate for goods and services across the
nation

8. Members
• The GST Council consists of the following members:
• The Union Finance Minister (as Chairman).
• The Union Minister of State in-charge of Revenue or Finance.
• The Minister in charge of Finance or Taxation or any other Minister, nominated by each State Government.
• In the Union Cabinet meeting held on 12th September 2016, it was also decided to appoint:
• The Secretary (Revenue) as the Ex-officio Secretary.
• The Chairperson, Central Board of Excise and Custom (CBEC), as a permanent invitee (non-voting) to all
proceedings of the Council.
• One post of Additional Secretary to the Council in the Secretariat (at the level of Additional Secretary to the
Government of India).
• Four posts of Commissioner in the GST Secretariat (at the level of Joint Secretary to the Government of India).

9. Recommendations
• GST shall include taxes, cesses, and surcharges;
• Goods and services which possibly will be subject to, or exempt from GST;
• The threshold maximum value of turnover for the function of GST;
• Rates of GST;
• GST laws, principles of levy, apportionment of IGST and principles associated with place of
supply;
• Special provisions with respect to the eight north-eastern states, Himachal Pradesh, Jammu and
Kashmir, and Uttarakhand; and other associated matters.
• Other matters pertaining to the implementation and regulation of GST in India.

10. Quorum
For a valid meeting of the members of GST Council, at least 50 percent of the total number of the
member should be present at the meeting.
Every Decision made during the meeting should be supported by at least 75 percent majority of the
weighted votes of the members who are present and voting at the meeting. In “article 279A” a
principle is there which divides the total weighted vote cast between Central Government and State
Government:-
• The vote of Central Government shall have the weighted of one-third of the total votes
• The votes of State Government shall have the weighted of two third of the total votes, cast in the meeting

11. Thanks & Regards
• RAHUL YADAV
• ASSISTANT PROFESSOR
• FACULTY OF LAW
• MDU, ROHTAK
• EMAIL: rahul.gf.law@mdurohtak.ac.in