GST Council's recommendations are not binding on Centre and states: SC verdict
- In Current Affairs
- 09:17 PM, May 19, 2022
- Myind Staff
The Supreme Court on Thursday said the recommendations of the GST Council are not binding on the Central and state governments.
A bench led by Justice DY Chandrachud held that the Central government and States have simultaneous powers to legislate on Goods and Service Tax (GST). Emphasizing the importance of cooperative federalism, the apex court held that the Centre and State always engage in a dialogue.
"Recommendations of GST council are product of collaborative discussion. It is not imperative that one of the federal units must always possess a higher share", Justice Chandrachud said.
“As the court has gone ahead to categorically hold that the GST Council recommendations have only persuasive value, there will be a pragmatic approach to the provisions which are subject to judicial review by way of challenge to the constitutionality of such provisions based on GST Council recommendations," said Abhishek A Rastogi, Partner at Khaitan & Co.
"If some are re-evaluated now, it is going to become challenging for businesses which are just recovering from a pandemic and demand reduction. This is a stage where the tax policies and tax laws should be supporting businesses to grow back to their earlier double digit growth figures," said MS Mani, Partner, Deloitte India (Indirect Tax).
The GST council is the supreme decision making body chaired by the union finance minister and represented by all states/UTs by their respective finance ministers.
“Indian federalism is a dialogue between cooperative and un-cooperative federalism where the federal units are at liberty to use different means of persuasion, ranging from collaboration to contestation," the top court said.
Image courtesy: Business Standard
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