SC decision on GST

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GST was the ideological child of Congress and BJP opposed to it vigorously. Later, when BJP came to power, it proposed the idea of GST and now it was Congress turn to oppose it. In  all the process, supreme court latest decision is a landmark decision is that GST council recommendations are not mandatory on state as well as centre. The real intention of GST is noble to avoid impose tax at each step and only at the destination point, the one time tax will be paid. There will not be many taxes us it used to be in the past which is for customers’s facility. Of course, the Supreme Court’s decision will cause a great chaos in financial world as many states especially non BJP governments will thwart GST recommendation. But the decision is in the interest of states and that was needed. Because, states had become bankrupt due to GST as they have  lost all sources of income which has caused lack of funds to carry out development works. Apart from this operational reality, the observation that has been recorded by SC is important and landmark. The Supreme Court’s assertion that the Goods and Services Tax (GST) Council is not only an avenue for the exercise of cooperative federalism but also for contestation across Centre-state lines is a timely reiteration of the provisions in Articles 246A and 279A of the Constitution. According to Article 246A, Parliament and the state legislature possess equal powers to legislate on aspects of GST; Article 279A envisions that the Centre and the states can’t act independently of each other. The council’s voting system gives two-third weightage to the states’ collective votes and one-third to the Centre’s vote in a bid to provide a level playing field. It’s unfortunate that despite such clear-cut provisions, the BJP-led Union Government and Opposition-ruled states have often been at loggerheads over the functioning of the council during the past five years. The one-nation-one-tax regime was rolled out in 2017 with the primary objectives of creating a unified national market and giving a boost to the ‘Make in India’ campaign; harmonization of laws, procedures and rates of tax between the Centre and the states and among the states; and establishing an environment that would facilitate compliance and reduce corruption. The new regime has been partially successful, hampered at times by Centre-state disagreements. The all-time high monthly GST collection of Rs one point sixty eight lakh crore last month augurs well for the future, but most states may find it hard to fend for themselves once the five-year compensation plan for GST rollout ends next month. Punjab, for instance, stands to lose over Rs fifteen thousand crore annually if the Centre stops recompensing it. For instance, Maharashtra is going to loose thirty thousand crores rupees as centre has said that GST compensation package will not be continued after June. This is the real harm to states as they have lost source of income through octroi due to GST. The GST Council is the ideal forum for the states to voice their apprehensions and prepare an action plan depending on whether the Centre accepts their demand to extend compensation beyond June. Empowering the states to generate revenue on their own in the long run should form the basis of a workable fiscal model. With GST being a key driver of Indian economy, it is imperative to create a win-win situation for both the Centre and the states in the true spirit of federalism. GST is no doubt needed for India. Some thinkers do not want it to be implemented at all. But they knowingly taking such position as without GST, there will be many taxes and a super chaos will take place. in any case, GST should be firmly cement its place in India.