GST Council an avenue for ‘political contestation’ across party lines: SC

It says the ripples in GST Council impact both federalism and democracy

May 20, 2022 02:02 am | Updated 03:26 pm IST - NEW DELHI

The Supreme Court on Thursday, in its judgment, took note of the bitter tug-of-war between the Centre and the Opposition-ruled States over various issues, from constitutionally mandated Goods and Services Tax (GST) compensation for State governments to interest rates, when it said the GST Council was an “avenue” for “political contestation” across party lines.

The court said political slugfest in the Council is a given for two reasons.

Firstly, the unequal voting structure — the Union’s vote counts as one-third, while the States’ votes have a weightage of two-thirds of the total votes cast. The decisions of the Council are not “unanimous”, but based on a three-fourth majority of the members present and voting. The court pointed out that the voting pattern was deliberately made unequal so that neither the Union nor the States enjoy dominant power over the other.

‘Both enjoy a veto’

“The structure of GST Council represents the federal nature of governance in this country... In other words both [Union and States] would enjoy a veto,” the court observed.

Secondly, the multi-party system in India where the party ruling in the Centre may not be governing several States. The ripples in the GST Council impact both federalism and democracy, the court noted.

“Therefore, the GST Council is not only an avenue for the exercise of cooperative federalism but also for political contestation across party lines,” Justice Chandrachud noted.

The court, however, said political contestation also nourishes federalism and democracy. Federal units need not always collaborate, they can contest and do what is best for fiscal security in a democracy.

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