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GST Council recommendations not binding on Centre and states: Supreme Court ruling may impact GST provisions

GST Council recommendations not binding on Centre and states: Supreme Court ruling may impact GST provisions

The Supreme Court has ruled that the GST Council recommendations are not binding on the Centre and the states, and are only ‘persuasive, in a landmark judgement that may impact the landscape of GST provisions under judicial review. The Parliament and state legislatures possess equal powers to legislate on GST, the Supreme Court said, upholding the judgement of the Gujarat High Court in Ocean Freight matter in the case of Mohit Minerals. It is for the GST Council to suitably advise the Central government and the state governments, the Supreme Court bench led by Justice DY Chandrachud said.

“As the court has gone ahead to categorically hold that the GST Council recommendations have only persuasive value, there will be a pragmatic approach to the provisions which are subject to judicial review by way of challenge to the constitutionality of such provisions based on GST Council recommendations, Abhishek A Rastogi, Partner at Khaitan & Co, added. Rastogi argued for the companies in the Ocean Freight matter in the Mohit Minerals case.

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