Kerala Finance Minister KN Balagopal has hailed the Supreme Court’s order on the Goods and Services Tax (GST) and said it would have a far-reaching impact on the country’s tax structure and central-state relations.
On Thursday, the apex court held that the recommendations of the GST Council are not binding on the Union and state governments, adding that Parliament intended that the recommendations of the body will have persuasive value.
It also ruled that the Centre and states have simultaneous powers to legislate on GST and the council must work in a harmonious manner to achieve workable solution between Centre and states.
GST recommendations are meant for “collaborative discussion” and it is not “imperative that one of the federal units must always possess a higher share,” read the judgement which is likely to have a significant impact on the contentious issue.
“Indian federalism is a dialogue between cooperative and non-cooperative federalism. Indian federalism is a dialogue in which States and Centre always engage in a dialogue,” the court said.
In a statement, Balagopal said: “The important thing is that the federal rights of the state can be protected by this ruling that the GST Council recommendations are advisory and cannot be enforced forcefully.”
He added: “The bench, headed by Justice Chandrachud, passed the order validating the stand taken by the Left parties inside and outside Parliament since the implementation of the GST.”
The minister said the implementation of GST and subsequent unilateral imposition of decisions affected the revenue and exchequer of the states. “We hope this will enable states to protect their economic existence to some extent. With this verdict, we can expect more decisions would be taken in a transparent manner by protecting the interests of the states.”
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