In the case of Parle Agro, the Council scheduled ‘Flavored Milk’ at a lower GST tariff of 5% despite recommending a higher rate of 12% in its meeting held on December 22, 2018. This decision will only support taxpayers against GST based demands. On Council discussions or even just clarification circulars. However, the government may bring changes including GST rates through legal amendments or notifications.
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“The GST Council in its meeting had stated that a higher rate of GST would be applicable on flavored milk. However, no amendment was made through notification which led the High Court to hold that the ‘minutes of the meeting’ did not represent “A similar situation may also arise where a clarification is issued by the GST Council through a circular instead of a proper amendment or notification to the law,” it said. Sunil GabhawalaFounder of a CA firm specializing in indirect taxation.
HC relied on a Supreme Court While delivering the judgment in the Mohit Mineral case, it was emphasized that the recommendations of the GST Council are not binding on the Union and the States. It said that accepting the Council’s recommendations as binding would hamper fiscal federalism.
“The GST Council is not a law making body, but its purpose is to provide recommendations to the legislature to make changes in the law (either through amendments or by issuing notifications). The HC decision only re-emphasizes this principle. Is,” said. Pratik JainPartner at Price Waterhouse & Company.
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