PINAKI MAJUMDAR
Jamshedpur, May 21: The Confederation of All India Traders ( CAIT) welcomed the Supreme Court’s decisions of the GST Council not binding on central and state governments.
CAIT officials said though the decision favours the trading community but it will have far-reaching consequences as in the order terming GST as a merely recommendatory body has put a certain question mark on the nature and validity of the GST Council.
“The decision has thrashed the belief that GST Council having representatives of both Central and state governments is a supreme body in connection with GST taxation system. In the wake of the SC order, the CAIT has urged the Union finance minister Nirmala Sitharaman to take a call for a review afresh the GST Act and rules,” said CAIT national secretary Suresh Sonthalia.
He went on to say that the apex court’s decision that recommendations of the GST Council are not binding on the federal constituents is expected to fracture the mandate of GST.
“If every state is made free from the recommendation of GST Council, it will empower them to make laws and rules as per their choice which will surely bring disparity and anomaly in GST rules and the basic fundamental of GST “one-nation-one tax“ will be highly jeopardised, ” he pointed out.
National vice-president of CAIT Brij Mohan Agarwal said that In the wake of the SC order, how it is expected that uniformity in the taxation system in the whole country will be maintained in GST law and rules.
“If states start taking independent decisions on GST issues, a whole mess will be created across the country. Not only this it will curb the free movement of trade across the country. It may also have an adverse impact on foreign investment in India as foreign companies have always advocated a single taxation law and rules all over the country,” he explained.
Sonthalia said that the powers of state governments to make a variation in GST laws will encourage having differential tax structures in different states.
“GST is basically destination based consumption tax. Now, this decision empowers the producing state government to have different policies to suit its own advantage whereas consuming states will have to suffer, ” he added.
