Netizens divided after SC says GST Council recommendations not binding upon states, Union 

The Supreme Court of India said in a landmark verdict said that the recommendations of the Goods and Services Tax (GST) Council are not binding upon the states and the Union. The top court also said that the Parliament wanted the recommendations to have persuasive value and that the Parliament and state legislatures have simultaneous powers to legislate on GST.

The SC bench helmed by Justice DY Chandrachud also said that the GST Council must ideally function in a harmonised manner and federal system needs harmonised work. The court cited Article 246A and said that the Centre and states are equal. It also cited Article 279 to suggest that states and the Centre cannot act independently towards each other.

Soon after this verdict came, netizens were divided. While some backed this verdict as fundamental to maintaining cooperative federalism, others said it nullifies the purpose of one tax one country that the Modi Government wanted to accomplish with the implementation of GST.

Economist and ex-Chief Economic Advisor Arvind Virmani said that if states legislate different GST rates for different goods and services, the purpose of having one tax one country is dead. He wrote, “If States legislate different GST rates for one tax one country is dead. Is there a flaw in the constitutional amendment or the GST law that implements it? If the latter, it can and must be corrected immediately!”

DMK MLA Dr TRB Rajaa, however, had a different take than Virmani on the issue. Hailing the current Supreme Court verdict as a win for cooperative federalism, he wrote, “More power to the States! Dravidian model catching up. “Indian federalism is a dialogue in which state and centre always engage ina dialogue.” Cooperative federalism key says SC. “Both Centre and States Can Legislate on GST: Supreme Court.””

Minister of Finance and Human Resources in the DMK-led Tamil Nadu government Dr P Thiaga Rajan said that the Supreme Court judgment clarifies all confusions regarding the GST Council recommendations. He wrote, “I’ve been saying this since HCM MK Stalin nominated me to the GST Council in May 2021. I’m glad this judgment clarifies the matter. Holding a press conference in Madurai this evening on the best way forward.”

Here are some more reactions to the Supreme Court’s GST verdict

During the Supreme Court hearing, Centre had said that the recommendations of the GST Council must be binding on the states. To this, the top court retorted and said that the role of the GST Council is significant as it does not pass resolutions unanimously.

Also read: SC order on GST Council: Are we going back to the dark ages of indirect taxes?

Also read: Supreme Court’s landmark GST judgment: Here’s what experts have to say 

Also read: Recommendations of GST Council are not binding, says Supreme Court  

Also read: EXCLUSIVE: SC ruling on GST Council a big boost for federalism, says KN Balagopal, Kerala’s finance minister