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GST Council alone has powers to approve panel recommendations: Manpreet Badal to FM - TechiLive.in

GST Council alone has powers to approve panel recommendations: Manpreet Badal to FM

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Punjab finance minister Manpreet Badal has written to Union finance minister Nirmala Sitharaman asking that the recommendations of the Goods and Services Tax implementation committee () be approved by the GST Council as the committee did not have powers to make rules.

While seeking an opinion of the law ministry or the attorney general on the matter, Badal said that bureaucrats in the committee did not have the authority to judge the observations of council members.

“On one hand, we are taking decisions of overarching significance that impact taxpayers by means of subordinate law, on the other hand, refraining from seeking even the approval of the council, as mandated by the charter of the GST laws,” he said.

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Badal was referring to several decisions taken by the GIC including cancellation of registration, tax compliance amendments and waiver of penalties, which were placed before the GST Council during the last meeting on May 28 only for information of the council rather than approval.

He had flagged the issue to Sitharaman prior to the council meeting as well, arguing that the decisions required amendment to rules and enactment of law, and therefore are not the domain of the GIC. He had cautioned that this would set a “dangerous precedent” and sought that powers of the GIC be defined and notified to prevent abuse. He added that Punjab would not incorporate substantive changes in its laws unless approved by the council.

In his letter to Sitharaman on Wednesday, Badal said that while this issue was raised by the state and others in the GST Council meeting, discussions that followed remained inconclusive.

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“By failing to obtain the approval of the council, we have subjected all the rules made on the basis of recommendations of the GIC to judicial review with the risk of being declared ultra vires,” he said.

He added that opinions of such committees were only advisory and not legally binding. He added that referring recommendations of the GIC and law committee back to the law committee for interpretation and final decision would set an inappropriate precedent, and sought that an opinion of the law ministry or the attorney general be taken in the matter.

“Recommendations of the GIC, even those endorsed by the law committee, which
comprises merely officers and not elected representatives, do not amount to recommendations of the GST Council,” he said, adding that the procedure of decision making which rests with the council cannot be circumvented.

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