SC upholds GST (Compensation to States) Act as constitutionally valid

NEW DELHI: The Supreme Court on Wednesday upheld the constitutional validity of Goods and Services Tax (Compensation to States) Act saying it was not beyond the legislative competence of the Parliament.

The top court said the Compensation to States Act, enacted by the Parliament in 2017, is not a “colourable legislation”.

A bench of Justices A K Sikri and Ashok Bhushan said the Act does not violate the Constitution (One hundred and first amendment) Act, 2016 nor is against the objective of Constitution (One Hundred and First Amendment) Act, 2016.

It held that the levy of ‘Compensation to States’ Cess is an increment to goods and services tax which is permissible under the law.

The bench while dealing with constitutional validity of the (Compensation to States) Act said that the expression ‘cess’ means a tax levied for some special purpose, which may be levied as an increment to an existing tax. (AGENCIES)

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