The Goods and Services Tax seems to be a fairly recent concept and this has been the start of a new chapter along the lines of taxation. The complex structure of taxation was replaced by the comprehensive indirect taxes levied on the supply of goods and services which has enhanced the control of taxes and streamlined various levels of taxation into a single system.

Taxation has seen various landmark cases however the confusion as to settlement of taxes and implementation of new principles of GST in a federal system was clarified in the infamous case Union of India V M/S Mohit Minerals Pvt. Ltd.

The Supreme Court in this case has adjudged has far-reaching implications, extending beyond the specific issue of Integrated Goods and Services Tax (IGST) on ocean freight under the Reverse Charge Mechanism (RCM) for CIF imports but also has dealt with the underlying principle of federal system with respect to GST and the impact of GST Council's recommendations.

This case commentary aims to dissect and analyze the key aspects of the judgment, focusing on the constitutional framework of the Goods and Services Tax (GST) law, the concept of composite supply, and its impact on the GST Council's recommendations narrowed down to the federal system structure.

Case Summary
The Hon'ble Supreme Court, in its decision dated May 19, 2022, upheld the Gujarat High Court's ruling, asserting that no IGST is payable on ocean freight under RCM for CIF imports. The judgment emphasizes that such transactions constitute a composite supply of goods, invoking Section 2(30) of the Central Goods and Services Tax (CGST) Act.

The section 2(30)[1] states as follows:
"Composite Supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply."

Furthermore, the case was held by the Hon'ble Supreme Court on the matters of IGST freight and acceptability of the recommendations of the GST Council. As a brief, in the adjudication of Union of India vs. M/s Mohit Minerals Pvt. Ltd., the crux of the matter lies in the intricate realm of the Goods and Services Tax (GST) and its constitutional underpinnings. The contention at hand is intricately woven into the legislative annals and the character of recommendations proffered by the Goods and Services Tax Council. The case entails a meticulous examination of statutory provisions which includes Article 246A[2], 269A[3] and 279A and the architecture of the Integrated Goods and Services Tax (IGST) Act, with a particular emphasis on the matter of purported excessive delegation.

The Goods and Services Tax Council, as ordained by Article 279A[4] of the Constitution, shoulders the responsibility of tendering recommendations to both the Union and the States on diverse facets of the GST. The authority to legislate on GST rests with the Parliament and State legislatures, albeit within defined parameters. The IGST Act and the Central Goods and Services Tax (CGST) Act meticulously articulate the concept of reverse charge and identify the entity subject to taxation for these specified purposes. Moreover, the IGST Act duly recognizes the place of supply of services, deeming it as the destination of goods when the supplier is positioned outside India.

The recommendations of the GST Council, characterized by their recommendatory nature, refrain from constituting binding edicts. The case meticulously probes into the constitutional ramifications of these recommendations and their consequential impact on the legislative machinery. Additionally, it necessitates a scrutinizing gaze at the principles of federalism and the nuanced distribution of legislative authority between the Union and the States, particularly within the realm of taxation.

In essence, the case provocatively raises pivotal inquiries concerning the constitutional soundness of the GST framework, the advisory nature of recommendations emanating from the GST Council, and the extent of authority delegated to the Council. It also engages with the intricate interplay between federal and state jurisdictions in the domain of taxation laws, providing profound insights into the labyrinthine complexities of the GST regime and its attendant legal ramifications.

CONTENTIONS
APPELLANT COUNSEL
The appellant, the Union of India, asserts that the recommendations put forth by the Goods and Services Tax (GST) Council bear a recommendatory character and do not possess the status of binding edicts. Their argument underscores that the authority to legislate on matters related to the GST is explicitly entrusted to the Parliament and State legislatures, subject to well-defined conditions.

The appellant accentuates the constitutional framework underpinning the GST, underscoring the pivotal role of the Council in formulating recommendations for both the Union and the States. Furthermore, the appellant expresses reservations regarding the perceived excessive delegation of powers to the Council and endeavors to scrutinize the constitutional ramifications emanating from the Council's recommendations.

With a special emphasis on the case K.P. Varghese V ITO[5], the arguments of the appellant counsel were to enunciate that the bill can be referred for the purpose of ascertaining the mischief that is sought to be remedied by the legislation and enacted. The other cases which enunciated that the recommendation has persuasive effect is Naraindas Indurkhya V State of Madhya Pradesh[6].

Moreover, the contention of the Union is that the recommendations of the GST Council are binding since Parliament and the State legislatures have agreed to align themselves with the recommendations as is evident from the provisions of the IGST Act and CGST Act. Certain provisions of the IGST Act, CGST Act and SGST Acts expressly provide that the rule-making power delegated to the Government shall be exercised on the recommendations of the GST Council. For instance, Section 5[7] of the IGST Act provides that the taxable event, taxable rate and taxable value shall be notified by the government on the "recommendations of the Council"

In essence, the appellant's assertions pivot around the constitutional soundness of the GST framework, the advisory nature of the GST Council's recommendations, and the nuanced distribution of legislative authority between the Union and the States within the sphere of taxation laws.

RESPONDENT COUNSEL
The respondent, M/s Mohit Minerals Pvt. Ltd., posits that importers engaged in a CIF contract lack direct privity of contract with the provider of transportation services, as their payments are not remitted directly to the transporter.

They assert that the determination of taxable value should strictly adhere to the explicit provisions articulated in the Central Goods and Services Tax (CGST) Act and its corresponding rules, raising objections to certain notifications prescribing valuation methodologies, deeming them in contravention of the Integrated Goods and Services Tax (IGST) Act.

The respondent, expressing reservations about the identification of the Indian importer as the primary recipient of services, challenges the Union Government's approach to categorizing the two transactional phases as either distinct or interconnected, highlighting concerns about the basis of convenience.

The cases of the apex court which reiterates that the recommendations could not create binding or enforceable rights on the Union or the States with respect to any of the recommendations which are in contradiction to a 'direction' or a 'mandate'[8].

Furthermore, the respondent meticulously addresses the intricacies of the reverse charge mechanism under the IGST Act, accentuating the limitations on the government's authority to stipulate the party responsible for discharging service tax obligations.

JUDGMENT
In rendering its judgment, the Supreme Court of India meticulously scrutinized the constitutional underpinnings of the Goods and Services Tax (GST) and dissected the character of recommendations proffered by the Goods and Services Tax Council. The Court conducted a comprehensive examination of the legislative lineage of the GST framework, placing particular emphasis on the statutory tenets embedded in the Integrated Goods and Services Tax (IGST) Act. This scrutiny primarily honed in on the nuanced issue of whether there existed an impermissible level of delegation of authority.

The apex court, in its pronouncement, affirmed that the recommendations tendered by the GST Council are marked with a recommendatory character and do not bear the hallmarks of binding edicts. It underscored that the constitutional prerogative to legislate on matters pertaining to the GST resides with the Parliament and State legislatures, albeit subject to delineated conditions. Further accentuating the constitutional tapestry of the GST, the Court shed light on the pivotal role played by the Council in formulating recommendations, underscoring its consultative nature with both the Union and the States.

On the matter of excessive delegation, the Court engaged in a meticulous examination of the provisions enshrined in the IGST Act and the Central Goods and Services Tax (CGST) Act. The objective was to gauge the extent of authority delegated to the GST Council. The Court judiciously concluded that the recommendations, characterized by their recommendatory essence, did not transgress the bounds of excessive delegation. It held that these recommendations, far from encroaching upon the legislative domain of the Parliament and State legislatures, served a supplementary and advisory role.

Furthermore, the judicial pronouncement delved into the intricate tapestry of the GST regime, unraveling its legal ramifications within the broader framework of federalism and the demarcation of legislative authority between the Union and the States. The Court's elucidation provided profound insights into the constitutional validity of the GST framework, elucidating the nature of recommendations propagated by the GST Council, and delineating the delicate equilibrium between federal and state powers, especially in the realm of taxation laws.

In conclusion the judgement rendered by the Hon'ble Supreme Court affirms that the recommendations of the GST council stand as a recommendation and does not have any binding effect on the Union or the States. Moreover, the constitutional validity of GST framework was upheld and that the distribution of powers between the Union and the States with respect to taxation laws are affirmed.

CONCLUSION
The case commentary has been curated to show emphasis on the regulations based on the recommendations of the GST Council and the impact and binding effect on the Union and the States. This helps in understanding the constitutional framework with respect to the GST regime and has enhanced the significance of the guidelines for the implementation of the GST framework.

The landmark judgment of Union of India V Mohit Minerals Pvt. Ltd. carries profound implications for the GST domain and the authority embedded with the GST Council recommendations The judgment, marked by meticulous analysis, emerges as a benchmark for future interpretations and applications of GST laws, providing stakeholders and legal practitioners with a comprehensive guide to navigate the dynamic terrain of indirect taxation in the country. The case not only addresses specific concerns but also establishes a broader precedent, molding the contours of GST jurisprudence and refining the comprehension of legal principles that underlie the GST framework.

In conclusion, the Supreme Court's judgment in Union of India v. M/s Mohit Minerals Pvt. Ltd. holds significant implications for the GST regime in India with respect to future needs on GST guidelines and serves as a precedent for all the issues which rise in the forte of GST Council recommendations.

End-Notes:

1. Central Goods and Services Tax (CGST) Act, 2017, § 2, sub § 30
2. India Const. art. 246, amended by The Constitution (One Hundred and First Amendment) Act, 2016
3. India Const. art. 269, amended by The Constitution (Eightieth Amendment) Act, 2000
4. India Const. art. 279, amended by The Constitution (One Hundred and First Amendment) Act, 2016
5. (1981) 4 SCC 173
6. (1974) 4 SCC 788
7. Integrated Goods and Services Tax Act, 2017, § 5
8. Union of India v. Pradip Kumar Dey, (2000) 8 SCC 580; Kesoram Industries and Cotton Mills Ltd. v. CWT, (1966) 2 SCR 688; Som Mittal v. Government of Karnataka, (2008) 3 SCC 753; State of AP v. T. Gopalakrishnan Murthi, (1976) 2 SCC 883