State and Centre are not bound by GST Council recommendations: Supreme Court

The Supreme Court has ruled that recommendations made by the Goods and Services Tax Council are not binding on states or the Centre as they hold persuasive value.

As long as both parliaments and state legislatures possess equal powers to legislate on GST, the council can advise accordingly, the court said. According to the court, Articles 246A and 279 stipulate that states and centers have equal authority to legislate on taxation matters and cannot act independently of each other. According to the bench, these provisions emphasize competitive federalism.

Judge DY Chandrachud of the Supreme Court said that the Council’s recommendations are the result of a collaborative process and discussions.

A detailed written judgment passed by the court is still pending. The court’s ruling highlights the principles of cooperative federalism. (Please check back for an update.)