GST Council’s suggestions are not binding: SC
Parliament intended for the recommendations of the Goods and Services (GST) Tax Council to only have a persuasive value.
Utkarsh Anand and Rajeev Jayaswal
NEW DELHI : The recommendations of the Goods and Services Tax (GST) Council are not binding on either the Union government or the states, the Supreme Court ruled on Thursday, rejecting the Centre’s argument that the entire structure of GST would crumble if the Council’s mandates are not treated as enforceable.
A bench, headed by justice Dhananjaya Y Chandrachud, held that “Parliament intended for the recommendations of the GST Council to only have a persuasive value, particularly when interpreted along with the objective of the GST regime, to foster cooperative federalism and harmony between the constituent units”.
The ruling was interpreted differently by various stakeholders, with the Centre saying it meant no change in how the GST regime functions while some states hailed it for protecting the rights of states.
“This judgment does not in any way lay down anything new in so far as the GST institutional mechanism is concerned, it does not have any bearing on the way GST has been functioning in India, nor lays down anything fundamentally different to the existing framework of GST,” a government official aware of the development said, requesting anonymity.
The official also added that the GST Council’s recommendations are binding on “subordinate legislation” which includes such aspects as the actual rates.
But the states saw the ruling differently: the finance minis