GST council recommendations not binding on centre, states, says Supreme Court
India Today
The bench stated that Article 279A of the Constitution does not begin with a non-obstante clause and Article 246A does not envisage a repugnancy provision.
The Supreme Court on Thursday held that the recommendations of the Goods and Services Tax (GST) Council are not binding on the Union and state governments, saying the Parliament intended that the recommendations of the body would have persuasive value.
A bench headed by Justice D Y chandrachud said, "The Union and states have simultaneous powers to legislate on GST and the constitution does not envisage a repugnancy provision and GST council must work in a harmonious manner to achieve a workable solution."
The bench stated that Article 279A of the Constitution does not begin with a non-obstante clause and Article 246A does not envisage a repugnancy provision.
Making crucial observations on cooperative federalism, the court said, "Democracy and federalism is interdependent on each other. The Indian Constitution though necessarily federal provides union higher share of power to avoid chaos but relation between two constitutional units may not always be collaborative."
"Indian federalism is a dialogue in which state and centre always engages in a dialogue," the court added.
The top court's ruling came while upholding a 2020 decision of the Gujarat High Court to quash the levy of Integrated Goods and Services Tax (IGST) on the importers on ocean freight under reverse charge, Hindustan Times reported.
In Mohit Minerals Pvt Ltd Vs Union of India, the Gujarat High Court held that no tax is leviable under the IGST Act, 2007, on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India.
