GST Council recommendations not binding on Centre, state govts: SC (Lead)

A bench, headed Justice D.Y. Chandrachud was the head of the bench, which also included Justices Surya Kant (and Vikram Nath): “The deletions of Article 279B as well as the inclusion of Article 279(1) in the Constitution Amendment Act 2016 indicate that the Parliament intended to the…” recommendationsThe GST CouncilTo only have persuasive value, especially when interpreted in conjunction with the objective of GST”Regime to foster cooperative federalism, harmony among the constituent units.”

The bench said that the Parliament and the stateLegislative power can be shared by both the legislature and the executive. onmatters of Goods & Service Tax

“The ‘recommendations’ of the GST CouncilThey are the result of a collaborative dialogue between the Union and the states. They are a source of inspiration. To consider them as bindingFiscal federalism is a system where the Union and the States have equal power to legislate. These edicts would cause disruption. on GST”, it said in its 153-page judgment.

The bench observed that the government is bound by the IGST Act and CGST Act while exercising its rulemaking power under the IGST Act and CGST Act. recommendationsThe GST Council. “But, that doesn’t mean it.” notThis means that all of the recommendationsThe GST CouncilMade by virtue of the power Article 279A(4) binding onThe legislature’s power of enacting primary legislations,” it said.

It was held that it is notIt is essential that one federal unit always has a greater share of the power to make federal units’ decisions. It said that Indian federalism is a dialogue of cooperative and uncooperative federalism, where federal units can use different methods of persuasion from collaboration to contestation.

“We are in agreement, with the High Court, to the extent that a Tax onThe supply of a service, already included in the legislation as a tax onThe composite supply of goods cannot be allowed.”

The bench said that Article 279A does not begin with a clause non-obstante, nor does Article 246A. stateIt is subject to Article 279A. “The Parliament, the stateLegislative power is simultaneously available to both the legislature and the executive. on GST. Article 246A applies. notA repugnancy provision could be considered to resolve inconsistencies between State and Central laws on GSTIt said:

“If the GST Councilwas meant to be a decision-making body whose recommendationsTo transform into legislation, such a qualification would be included in Articles 246A and 279A. Article 279A doesn’t contain a nonobstante clause. Article 246A also does not say that the legislative power can be’subject’ to Article 279.”

The bench stated that Article 246A would have contained an explicit provision if the GST Councilwere to be a constitutional body. recommendationsTransform into legislation without any intervening acts

The highest court verdict was reached onCentre appealed against the Gujarat High Court division bench verdict. onJanuary 23, 2020, which annulled 2017 notifications to levie service tax onThe importer.

The high court granted permission to the respondents to file a petition under Article 226 challenging the constitutionality two Centre notifications.

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