The federal system is a means to accomodate the needs of a pluralistic society to function in a democratic manner.

The Supreme Court on 19 May 2022 ruled that the recommendations of GST council cannot be binding on the center and the states, the federal units. SC observed that “It is not imperative that one of the federal units must always possess a higher share of power over the other units”.

The Consitution 101st amendment act inserted Article 246A which empowers the legislature of the state to make laws with respect to Goods and Service tax imposed by the Union or by such state.

An appeal was filed against the Gujarath High Court ruling that the Centre cannot levy
Integrated Goods and Services Tax (IGST) on ocean freight from Indian importers. The ruling will provide relief to the importers of goods, they need not pay GST on ocean frieght charges. Also, they can seek refund of the past payments made.

The court held that, with respect to making GST laws the Union Government and the State Governments were “autonomous, independent and even competing units”. Fiscal federalism is a major feature of Indian federalism, GST council is an avenue for the exercise of coorperative fedarlism.

Palanivel Thiagarajan, Tamil Nadu Minister for Finance has welcomed the ruling. He stated that this would ensure the state’s rights.

Leave a Reply

Your email address will not be published.

error: Content is protected !!