Why in News?
Recently, the Supreme Court ruled that the recommendations of the Goods and Services Tax (GST) moreover Council Decisions.
The Decisions are not binding on either the Union government or the states.
- The Supreme Court has held that GST on ocean freight paid in case of import of goods is unconstitutional.
SC JUDGEMENT ON GST FRAMEWORK
- Parliament and the state legislatures had equal and simultaneous powers to legislate on GST Council Decisions.
- The GST Council Decisions must work in a harmonious manner to achieve workable solutions between the Centre and the states.
- Under Article 279A of the Constitution, the recommendations of the Goods and Services Tax (GST) Council Decisions are not binding on either the Union government or the states.
- To regard them as binding edicts would disrupt fiscal federalism.
- Where both the Union and the States are conferred equal powers to legislate on GST Council Decisions.
- Article 246A (which gives the States power to make laws with respect to GST) of the Constitution treats the Union and the States as “equal units”.
- It confers simultaneous power (on Union and States) for enacting laws on GST Council Decisions.
Significance of the Judgement:
- This judgment might change the landscape of those GST provisions which are subject to judicial review.
- It defines the roles of the GST CouncilDecisions, the Centre and the states.
- And moreover their interplay in the GST regime.
GST COUNCIL VOTING RULES
- According to, the Constitution (One Hundred and First Amendment) Act, 2016, every decision of the GST Council has to be taken by a majority of not less than three-fourths of the weighted votes of the members present.
- In case of any disagreements, the Centre may bring its support below the three-fourths majority that is needed for the passage of a decision.
SOME OTHER VOTING RULES FOR GST COUNCIL
- The votes of the central government have a weightage of one-third of the total votes cast.
- The votes of all the state governments taken together have a weightage of two-thirds of the total votes cast in that meeting.
· Under Article 279A (1), the GST council had been notified and brought into existence as a Constitutional body to decide issues relating to GST.
· The GST Council is a joint forum of the Centre and the States, and shall consist of the following members: –
Ø Union Finance Minister – Chairperson.
Ø The Union Minister of State, in-charge of
Ø Revenue of finance – Member.
Ø The Minister In-charge of finance or taxation
Ø or any other Minister nominated by each State
Ø Government – Member
What is GST?
Ø GST is the comprehensive, multi-stage, destination-based tax that is levied on every value addition.
Ø GST is one indirect tax for the entire country.
Ø GST is proposed to be a dual levy where the Central Government will levy and collect Central GST (CGST).
Ø The State will levy and collect State GST (SGST) on the intra-state supply of goods or services.
o The Centre will also levy and collect Integrated GST (IGST) on inter-state supply of goods or services.
Read more: UPSC CURRENT AFFAIRS