New GST rules coming into effect
Representative photo. Image credit - The Financial Express

New Delhi: The Supreme Court on Thursday ruled that both Centre, as well as states, has the power to legislate on Goods and Services Tax (GST) matters.

The top court further said that all recommendations of the GST Council are not binding on states but have only a persuasive value.

A bench led by Justice DY Chandrachud held that the Parliament intended that the recommendations of the GST Council will have persuasive value.

“Recommendations of GST council are product of collaborative discussion. It is not imperative that one of the federal units must always possess a higher share”, Justice Chandrachud said.

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’s judgement clarifies that GST Council is an informal body whose inputs should be taken into account, but it does not have a legislative power and laws have to be legislated by the bodies who are empowered to do so ie the Parliament and the state legislative assemblies, S R Patnaik, Partner & Head – Taxation, Cyril Amarchand Mangaldas said. 

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