Will 28% GST on casinos pose a unique constitutional crises in post GST era?

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Last year, the Supreme Court held that the recommendations of the GST Council are not binding on the Parliament and State Legislatures. The apex court opined that had the Parliament intended to make recommendations of the GST Council mandatory the concerned article 279A of the Constitution would have said so explicitly. The recommendations pertaining to rate revisions that do not require amendments to GST Acts are binding only in certain cases.

This decision also means states can refuse to implement the decisions of the GST Council and fix their own different rates of tax, grant exemptions and relaxations.

On Tuesday, the GST Council recommended 28% GST on full face value of online gaming, casinos, and horse racing. This is a major decision considering the fact that all states require to amend the state GST enactments while the central government needs to amend CGST and IGST Acts for implementation.

So this means, the 28% tax rate for real money gaming won’t come into force until and unless all states amend their existing law on GST.

Here comes Goa, that is adamant about the increased tax rate for casinos in the tourist state. Goa is the reason that the decision took so long or in other words delayed by close to one year. It is on Goa’s demand the GST Council referred the matter last year to GoM for the second time.

Now can Goa refuse to pass amendments to the state GST Act? Can this indefinitely delay the implementation of the Tuesday’s decision of the Council? Answer seems to be yes. It is all within the powers of Goa state assembly. If this becomes true, this will result in a unique scenario that has not been witnessed since the implementation of the GST.

Until now, all decisions of the GST Council were taken with consensus of union and state governments agreeing on tax rates irrespective of the fact that some states are staunch opponents of ruling BJP. Even the Tuesday’s decision was taken without voting while even one state could have pushed for a vote. Goa didn’t do so.

For now, we have to wait and watch.

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