The delegated authority, i.e. GST Council, must act precisely within the confines of the authority given to it says, S R Patnaik, Partner & Head - Taxation, Cyril Amarchand Mangaldas
“This is a welcome decision since it clarifies the relative powers and authority of the Parliament and the state legislative assemblies vis~a~vis the GST Council. It clarifies that GST Council is an informal body whose inputs should be taken into account, but it does not have a legislative power and laws have to be legislated by the bodies who are empowered to do so i.e. the Parliament and the state legislative assemblies.
“The Apex court has observed that the GST Council recommendations have only persuasive value. The Courts would now have to be more proactive in the judicial review of GST legislation with the Apex Court clarifying that that decisions of the GST Council are not law and they are mere recommendations. This may also lead to flooding of litigations challenging any discrepancy or unfavourable GST Council decisions.”
“The Apex Court has reminded the Government that GST law concerns both State and Centre. It would defeat the principles of "cooperative federalism" if all the decision are made by centre. The decision of GST council are recommendatory and would not become law unless passed by both Parliament and the State legislatures. The delegated authority, i.e. GST Council, must act precisely within the confines of the authority given to it under the Act, and the notion of implied intent or the idea of incidental and ancillary power will not be appropriate in the exercise of fiscal power as it affects several taxpayers.”