States have equal powers to make GST-related Laws: SC Economics | GS3: Indian Economy NotedStudents | Fron UPSC perspective, the folowing things are important: Prelims level: GST Council Mains level: Read the attached story Tit What next? FOR BUSINESSES | reiterates thespiitin Goods importers get | which the GST Counclis ‘some relief as they are | functioning rolonger ableton. eos pay GST on ocean Ee Frelght charges, could seek refunds for past payments FOR THE CENTRE * The Council may be AND STATES Summoned soon to ‘= Finance Ministry discuss SC verdict’s believes SC order only | implications “The Supreme Court has held that Union and ‘State legislatures have equal, simultaneous and Unique powers to make laws on Goods and Services Tax (GST) and the recomendations (ofthe GST Council are not binding on them. ‘What isthe case? + The apex courts decison came wrile confirming a Gujarat High Court ruling that the Centre cannot levy Integrated Goods and Services Tax (IGST) on ocean fright from Indian importers Key takeaways of the Judgment += The recommendations of te GST Council are the product ofa colaborativecialogue inwoling the Union and the States. + They are ecommendatory in nature. They ‘only have a persuasive value + Torogard them as binding would disrupt fiscal federalism when both the Union ard the States are conferred equal power ta lecislate on GST. Basis of the Judgment + The court emphasised that Article 246A of the Constitution gives the States power to ake laws with respect to GST. + fetreats the Union and the States as equal units. + feconfers a simultaneous power fon Union and States) for enacting laws on GST. + Article 279A, in constituting the GST Counel, ‘envisions that nether the Centre ror the States are actualy dependent onthe other. ‘ecision ofthe ~» Counc has been reached by consensus so far" HINDU (co fume ‘created by the Constitution Pre ent ra es ‘The Centre had been Peed SSS remo td C fie Perens tte for States to protect their rights ‘What are the articles added/modified tothe Constitution by the GST Act? (1) Article 246A: Special Provision for GST + This Article was newly inserted to give power to the Parliament and the respective State! Union Legislatures to make laws on GST respectively imposed by each of them, + However, the Parliament of Inca is given the exclusive power to ake laws with respect to Inerstate supplies. + The IGST Act deals with inter-state supplies. ‘Thus, the power to makelaws under the IGST Act wil est exchsvely withthe Parlament. + Further the article excludes the following products from the scope of GST unt a cate recommenced by the GST Councit + Pavoleum Crude High-Speed Diesel + Motor Spi Natural Gas + Aviation Turbine Fuel (2) Article 269A: Levy and Collection of GST for Inter-State Supply * While Article 2464 gives the Parliament the exclusive power to make laws with respect to interstace supplies. + The manner of distribution of revenue from such supplies between the Cente and the State is covered in Article 269A, + eallows the GST Counc to frame cules in ‘his regard Import oF goods or services will alsa be called a inter-state supalies + This gives the Contal Government the ower to levy IGST on import transactions, + Import of goods was subject to Countervaling Duty (CVD) inthe eatir scheme of taxation + 1GSTlevy helps a taxpayer to aval the cei ‘oF IGST pric on import along the supply cain, which was not possiole before, (@) Article 279A: GST Council + This Article gives power to the President 1 constitute a joint forum ofthe Centre and States called the GST Cour + TheGST Counellis an apex member committe to modify, reconcile or to procure any law or regulation based on the cortex of GST in Iria, (4) Article 286: Restrictions on Tax Impostion + This was an existing article which restcted states fom passing any law that allowed ‘thee to collect tax onsale or purchase of ‘goods ether outside the sate orn the case of impor transactions. + Teas further amenced to restrict the passing ‘of any laws ease of services to. + Further the term supply replaces sale ‘or purchase (6) Article 366: Addition of Important definitions Article 366 was an existing article amended t0 include the folowing definitions: * GST means the tx on supply of goods, services or both Its important to note thatthe supply of alcoholic liquor for furan consumption is excluded from the purview of GST. + Services refer to anything other than goods, + State includes Union Terrtoy with lecisteure + The GST Councils a federal body that aims twbring together states and the Centre on a commen platform for the nationwide rllout ofthe indirect tax reform, + Itisan apex member committe to most, reconcile orto procure ay law or regulation based on the context of goods and services taxin Inia + The GST Council dictates tox rate tax ‘exemption the duc date of forms tax laws, an tax deadlines, keeping in mind special rates and provisions for sore states, + The predominant responsibilty ofthe GST CCouneilis to ensure to have one uniform tax rate for goods and services across the nation, How is the GST Couneil structured? + The GST is governed by the GST Council ‘Acticle 79 (1) of the amended Indian Constkution states thatthe GST Counc has to be constituted by the President Within 60 days of the commencement of the Acticle 279A, + According to the article, the GST Count ‘will be a joint forum forthe Centre and the States. I consists ofthe following members: + The Union Finance Minister willbe the Chairperson+ Asa member, the Union Minister of State Terms of reference il be in charge of Revenue of Finance + Article 2794 (4) specifies that the Counc wil + The Minister in charge of finance or taxation make recommendations tothe Union and ‘or ary other Minster nominated by each the States on the important issues related State government as members. {0 GST, sucha the goods and services will be subject or eerped from the Goods and Services Tax + They lay down GST laws, principles that ‘govern the folowing: + Place of Supply + Threshold fits + GST rates on goods and services + Special ates for raising adctonal resources suring a natual calamity or csaster + Special GST rates for certain States DEATH PENALTY ABOLITION DEBATE Supreme Court frees Perarivalan Poly | 52nd & ts Neghborhod - Rebs Nation] Rom UPSC pepe te ello higs rrp Pens oe. Vronrariesnobionedin saws Mains level: Death penaky THE*22 HINDU = \ Free at ast: AG. Perarala, one of he lfe convicts in the Ral Gandh assassination cas soon with is ‘mothe, Arputham Arnal an others, aftr the Supreme Court ordered is leas.» VENRAACHALAPATHY A long path | & brief timetine of Perarivalan’s over 30-year-long incarceration: (AUENINELECH! arrests | ERE tamit AETEEEDIEDA thvee- sees Peratvalan Nadu Cabinet decdesto "judge Bench ofthe Sc aves MA TADA court” Mimeditely release Santhan, the Centre three months to AUREREEEY§ ADA court. Murugan, Peraralan Nan, decide on his release including Prato, inthe” RODE POAS,leyaumar and MEPS he Centre Rajiv Gandhi assassination case Ravichandran, ‘rejects T.N. govt's request, Execution RRERETEEN SC sys Centre gemrAEPTITANT.N. govt ‘of Santhan, Murugan and ‘will decide whether the ‘decides to recommend to Perarivalan fixed for convicts will be released Governor the release of all Sept 9,201 ERED ome ons Isc commutes _“CBtoficermakes 9 ry the death sentence on grounds sworn statement that peaiieicy of delay mn duposnget ther the CBlomitted par of SEM ear imery pleas, Perchalan’sconfesson EMMA ate “The Supreme Court has invoked its Among the factors that sustained Perarivalans ‘exrardinary powers to do complete justice | long battle was the determination anc under Antic 142 ofthe Constitution and ‘commitment of hs mother, Arputham Ammal, ‘ordered the release of AG. Prarvalan in who emerged a the face ofan anti-death former PM assassination case, pponaty movement and the sympathy and ‘empathy that he received from poople from all walks of if. What isthe news? «A Benched by Justice L Nageswara Rao, ints udoment, took into consideration Peraivalns long jal term for over 30 years to order his release “The court held tht the TN Council of Ministers advice to pardon Perarvalan was binding on the Governor under Article 161 (Governors power of clemency) of the Constitution. + The advice of the State Cabinet i binding ‘on the Governor in matters eating to ‘commutationfemission of sentences under Anil 1 Note: ‘As per Article 6, the Governor of a State shall hhave the power to grant pardons, ropricves, respites or remissions of punishment orto suspend, remit or commute the sentence of _any person convicted of any offence against any law roating toa matter to which the executive power ofthe State extends ‘What branded Perarivalan as a murderer? + He had bought two 9 vot battery ells on behalf ofthe bomber. + These were used to make the bomb explode, + This confession statement taken under Section 15(1) of TADA to establish his ink ‘with the assassins and his knowledge and role in the assassination. ‘Why was this a case for Governor? + Perarvalan was not a death sentenced convict. + Eadie, the apex court had commuted bis death penalty to life sentence for murder in 2014, + The Govemer had no business forwarding ‘the pardon plea tothe President after sing ‘oni for years together + Had ths been a death pont, the ease would have been diferent ‘Why did the Supreme Court intervene? * Governors delay to decide Porarvalans pardon for more than two years has ‘compelle the apex court to employ ts constitutional powers under Article 142 to do justice to Perarivalar, + Afterall the court sid, 2 Governors non ‘exercise of power under Article 161 of ‘the Constitution was not immune from judicial review.What is Article 42? + Ieis usualy used in cases involving human + This would rather crete an extraordinary + Article 142 provides discretionary power to rights and environmental protection, situation whereby pardons granted by ‘the Supreme Court. Governors in murder cases forthe past 70 + testes tat the court inthe exercise of Other legal aspects ofthis pardon “years would be rendered imal. itejureticion may pas such decree or The Court mind the Centres argurent make such order ort nesesary fr doing _—-thatthePresident exclusively, and no the Back2Bases: complete justice nary cause or mater Governor had the power to grant pardon pe: comMews/oardoing pending belore it in a case unde Section 302 (murder afte powerso-the-pesiden + Such decree shal be enforceable throughout _ndian Penal Code. the tertory af ndain such manner as may __* The cour had said tha such acontenton be pesoibed by or under ary lw made by wouldrender Article 16 adead-eter, Parliament.