SC order on GST Council evokes mixed reactions

Mumbai: Are we heading back to multiple tax rates and interpretations? Will it lead to the end of One-Nation-One-Tax formula? Experts and political leaders have a mixed view on the Supreme Court’s ruling, which has held that a recommendation of the GST Council isn’t binding on the Centre and states and only holds persuasive value.

If states legislate different GST rates for different goods and services, the purpose of having One-Nation-One-Tax 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.

Former Chief Economic Advisor Arvind Virmani

The Supreme Court judgment clarifies all confusions regarding the GST Council recommendations. I have been saying this since CM MK Stalin nominated me to the GST Council in May 2021. I am glad this judgment clarifies the matter.

Tamil Nadu Minister of Finance and Human Resources Dr P Thiaga Rajan

The apex court’s judgement on the powers of GST Council on taxation and the state government’s rights is a landmark one. I am yet to see the full verdict. But it is clear from the reports that it is a verdict that upholds the federal rights of the states and the people. My party CPI(M) has always been sceptical about the role of the GST Council.

Kerala Finance Minister KN Balagopal

The court’s order will have far-reaching implications on various other matters where the states are not in agreement with the decisions of the GST Council, especially in light of the compensation period coming to an end in June. This area would need to be closely looked out for.

Deloitte India Partner Mahesh Jaising

Technically, one may say that the possibility of a scenario of the Centre or states not abiding by GST Council decision making may arise. However, such a possibility, as has been proven through the last almost five years, should be remote and slightly far-fetched. The ideal scenario, of course, would be to make the GST Council’s decision legally binding as well but that may require changes in the Constitution. It needs to be re-emphasised that the industry would definitely not want a situation that the current status in any manner is disturbed by states or Centre, making unilateral changes to any of the GST law.

PwC India Partner Prashant Agarwal

The SC order defines the roles of the GST Council, Centre and states and their interplay in the GST regime. The council is a constitutional body whose role is to advise and recommend on GST issues. To accept such an advice and pass appropriate amendments in law is purely in the domain of the Centre and state legislatures.

Shardul Amarchand Mangaldas & Co Partner Rajat Bose

Further, Shardul Amarchand Mangaldas & Co Partner Rajat Bose said the SC order defines the roles of GST Council, Centre and State and their interplay in the GST regime. ‘’GST Council is a constitutional body whose role is to advise and recommend on GST issues. To accept such advice and pass appropriate amendments in law is purely in the domain of the Centre and State legislatures,’’ he noted.