Recommendation of GST Council is not binding on States
BIG NEWS: In a judgment of significant import, the Supreme Court has ruled that the Central government and States have simultaneous powers to legislate on Goods and Service Tax (GST).
Hence, the GST council must work in harmonious manner to achieve workable solution between Centre and States, the Court said.
Pertinently, the Court ruled that the recommendation of GST Council is not binding on States but has only persuasive value.
“States and Centre can equally legislate on matters of GST. All recommendations of GST council is not binding on State legislature,” the Court held.
According to Article 246A, both parliament and State legislature have equal power to legislate on matters of taxation, the Court added.
“Article 246A treats State and Centre as equal. Article 279 says state and centre cannot act independent of each other. This also points towards competitive federalism,” the judgment said.
Interestingly, the Court also made important observations on co-operative federalism.
The Court said that while the Indian Constitution necessarily federal provides Union government higher share of power to avoid chaos but relation between two constitutional units may not always be collaborative.
“Indian federalism is a dialogue between cooperative and non-cooperative federalism. Indian federalism is a dialogue in which States and Centre always engages in a dialogue,” the Court said.