Comprehension

Pronouncing its verdict on a protracted dispute over the levy of Goods and Services Tax (GST) on ocean freight charges paid by importers, the Supreme Court on Thursday held that such a tax was untenable. Its 153-page judgment has also dwelt at length on the nature of the recommendations of the GST Council, the constitutional body set up to oversee the operations of the indirect tax regime. Invoking the spirit of cooperative federalism, the Court has held that both the Union and State legislatures have ”equal, simultaneous and unique powers” to make GST laws, and the recommendations of the Council, where they have a one-third and two thirds voting share, respectively, are not binding on them. While amending the Constitution to pave way for the tax system that subsumed multiple central and State levies, Parliament had intended for the Council’s recommendations to only have ’a persuasive value’, as per the Court. This has sparked fears that individual States can start vetoing the Council’s recommendations that they do not agree with, and refuse to implement them, thus threatening the ’One Nation, One Tax’ edifice of a reform that took years to bring about. Opposition-ruled States have hailed the verdict as upholding their rights vis-`a-vis what a few termed as the ’arbitrary imposition’ of Centre’s decisions in the Council. The Finance Ministry has sought to quell anxiety by indicating that the Court has only elaborated on the Council’s existing arrangement and the status quo would continue. States can already reject the Council’s decisions but none has chosen to so far, it said. 

Question: 1

The recommendations of the GST council are...

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For questions based on legal or technical passages, look for direct quotes or specific terminology used in the text. The correct answer often uses the exact wording or a very close paraphrase of a key finding or statement.
Updated On: Oct 13, 2025
  • Strictly binding on the States
  • Having only persuasive value
  • Arbitrarily imposed on the states to comply with
  • Barred from judicial scrutiny
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The Correct Option is B

Solution and Explanation

Step 1: Understanding the Question
The question asks about the legal nature or status of the recommendations made by the GST Council, based on the Supreme Court's judgment described in the passage.

Step 2: Locating the Key Phrase in the Passage
The passage contains a very specific statement from the court on this matter. It says: "Parliament had intended for the Council's recommendations to only have 'a persuasive value', as per the Court." It also states that the recommendations "are not binding on them" (the Union and State legislatures).

Step 3: Evaluating the Options


(A) Strictly binding on the States: This is directly contradicted by the passage, which says the recommendations are "not binding."

(B) Having only persuasive value: This option uses the exact phrase from the passage to describe the court's finding. It accurately reflects that the recommendations are suggestions, not commands.

(C) Arbitrarily imposed on the states to comply with: The passage mentions that some opposition states termed the Centre's decisions as an "'arbitrary imposition'," but the court's verdict actually empowers the states by saying the recommendations are not binding, thus opposing the idea of arbitrary imposition.

(D) Barred from judicial scrutiny: The fact that the Supreme Court pronounced a verdict on the nature of the GST Council's recommendations proves that they are not barred from judicial scrutiny.


Step 4: Final Answer
The passage explicitly states that according to the Supreme Court, the recommendations of the GST Council have 'a persuasive value'. Therefore, option (B) is the correct answer.
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Question: 2

As per the Supreme Court judgement the State legislatures can...

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Pay close attention to adjectives used in legal judgments quoted in a passage. Words like "equal," "simultaneous," and "unique" are very specific and carry significant legal weight. Use them to eliminate options that suggest a hierarchical or unequal relationship.
Updated On: Oct 13, 2025
  • Legislate in all the areas in which Union Government can legislate
  • Legislate in a limited area as approved by Union Government
  • Legislate but it should be ratified by the Union Government
  • Not legislate anything related to GST implementation
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The Correct Option is A

Solution and Explanation

Step 1: Understanding the Question
The question asks about the powers of State legislatures regarding GST laws, according to the Supreme Court's judgment mentioned in the passage.

Step 2: Finding the Court's Ruling on Legislative Powers
The passage summarizes the court's holding on this issue clearly: "Invoking the spirit of cooperative federalism, the Court has held that both the Union and State legislatures have 'equal, simultaneous and unique powers' to make GST laws...".

Step 3: Interpreting the Ruling and Evaluating the Options
The phrase "equal, simultaneous and unique powers" means that the states have the same level of authority as the Union (central) government to legislate on GST. They can act at the same time, and their power is distinct and not subordinate.


(A) Legislate in all the areas in which Union Government can legislate: This aligns with the court's finding of "equal" and "simultaneous" powers. If the powers are equal, states can legislate in the same GST-related areas as the Union.

(B) Legislate in a limited area as approved by Union Government: This suggests a subordinate role for the states, which contradicts the "equal" and "unique" nature of their powers.

(C) Legislate but it should be ratified by the Union Government: This also implies subordination, which is contrary to the court's ruling.

(D) Not legislate anything related to GST implementation: This is directly opposite to the court's finding that states do have the power to make GST laws.


Step 4: Final Answer
The Supreme Court's judgment affirms that state legislatures have powers equal to the Union government in making GST laws. Therefore, they can legislate in the same areas. Option (A) is the correct answer.
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