Observing that the recommendations of the GST council are a product of collaborative discussions and as such are imperative that one of the federal units must always possess a higher share, the Supreme Court ordered that the states and Centre can equally legislate on matters of GST and all recommendations of the council are not binding upon the state legislature. The apex court’s ruling came in a case involving the Centre imposing unjust IGST ( Integrated GST) on ocean freight. The bench went so far as to term the tax unconstitutional and ordered a refund of all such monies collected. Further, the court made it amply clear that all decisions by the GST council are recommendatory in nature and to regard them as mandatory edicts would disrupt fiscal federalism. Ever since the GST was notified the Centre has been gobbling the lion’s share of the collections, leaving little or no margin for the states, justifying this daylight robbery as necessary to implement government schemes. The Centre has been stingy in devolving even the meagre share of taxes to the states, especially those not ruled by the BJP. In fact, GST has been weaponised by the Sanghis to browbeat states into submission on political, budgetary and fiscal matters, as it is the GST statistics are super opaque and no one other than the sarkar is privy to the actual figures. It is also a point to ponder that the government has collected Rs 802,000 crores as taxes on petrol and diesel over the past three years but little of that has been passed on to the states. For years now, states have been getting the short end of the stick as regards proportionate share in central taxes. Hopefully, this judgement will provide greater autonomy to states and alleviate fiscal imperialism resorted to by the union government.
