SC says Centre, States have equal powers to make GST-related laws
The Supreme Court on
Thursday, in a judgment
championing the impor-
tance of “cooperative feder-
alism” for the wellbeing of
democracy, held that Union
and State legislatures have
“equal, simultaneous and
unique powers” to make
laws on Goods and Services
Tax (GST) and the recom-
mendations of the GST
Council are not binding on
them.
The apex court’s decision
came while confirming a
Gujarat High Court ruling
that the Centre cannot levy
Integrated Goods and Servic-
es Tax (IGST) on ocean
freight from Indian
importers.
“The recommendations
of the GST Council are the
product of a collaborative
dialogue involving the Union
and the States. They are re-
commendatory in nature…
The recommendations only
have a persuasive value. To
regard them as binding
would disrupt fiscal federal-
ism when both the Union
and the States are conferred
equal power to legislate on
GST,” a Bench led by Justice
D.Y. Chandrachud held.
The court emphasised
that Article 246A (which
gives the States power to
make laws with respect to
GST) of the Constitution
treat the Union and the
States as “equal units”. “It
confers a simultaneous pow-
er (on Union and States) for
enacting laws on GST... Arti-
cle 279A, in constituting the
GST Council, envisions that
neither the Centre nor the
States are actually depen-
dent on the other,” Justice
Chandrachud interpreted.
