GST Council will work like it has for 5 years: Tarun Bajaj on SC verdict

Reacting to the Supreme Court verdict that GST Council’s recommendations are not binding on the Centre and states, revenue secretary Tarun Bajaj on Thursday said the top court had only “reiterated” the scheme of things in the Goods and Services Tax regime under the Constitution.

Pointing out that the court had stated the “obvious”, Bajaj said in a media briefing that GST Council would function the way it had in the last five years.

Bajaj clarified that Article 279A of the Constitution allows the Council to make recommendations but nowhere has it said that Council will “mandate”.

“It is an executive body created by the Constitution… It consists of both the Centre and states which recommend and based on that we act and make changes in the legislations,” Bajaj said.

Whether the apex court judgement implies that it will give the power to states to not accept or agree to recommendations, Bajaj said: “We can’t give legal interpretation as we need to go through the verdict…I am giving the ethos and the spirit on which the law was introduced and how it has functioned over the last five years.”

The senior bureaucrat also said that the SC judgement was in the context of taxability on ocean freight. “So any review will be only in the taxation context. A decision will be taken only after reviewing the apex court order in detail,” he added.

On Opposition states’ reaction welcoming the judgement, Bajaj refused to comment. “If you refer to the record of the GST Council, all decisions were consensus-based barring one on levy on lotteries. The spirit was that we will come together to implement the GST laws… So I would say that whatever the court said in the judgement is something which had been mentioned by former finance minister Arun Jaitley. It is nothing new and it was always there,” he added.

According to finance ministry officials, this issue was raised earlier by Congress leader Veerappa Moily during a Parliament debate on GST legislation.