Bombay HC Admits PIL challenging GST Cess: Issues Notice to Govt, CAG [Read Petition]

While admitting a Public Interest Litigation (PIL) challenging the constitutional validity of the GST Compensation Cess, the Bombay High Court last day issued notices to (1) Union of India, (2) Comptroller and Auditor General of India, (3) 14th Finance Commission of India, (4) Goods and Service Tax Council, (5) Niti Ayog, (6) State of Maharashtra and (7) the Attorney General of India.

The petitioner, a law teacher, challenged the validity of the Goods and Services Tax (Compensation to States) Act, 2017, and 15 other laws related to the compensation cess contending that the Act was introduced to levy additional cess on certain goods such as luxury cars, coal and schemes such as the Swachh Bharat to make good the losses to states in the first five years.

As per the Rules prescribed by the Central Government, a cess can be levied only for a specific purpose and its proceeds cannot be shared with the states.

It was argued that at the time of the passage of the GST Act, the government never proposed to introduce new cess, hence the compensation act and related acts should be examined for their validity.

A bench comprising Justices Shantanu Kemkar and Rajesh Ketkar has not allotted a specific date for this case, hence, it will come up for hearing as per the CMIS date.

Senior Advocate S B Talekar appeared for the petitioners.

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