The draft constitutional amendments, vital for the introduction of the proposed Goods and Services Tax (GST), have proposed the setting up of a tribunal to resolve the disputes arising between the Centre and states in the proposed GST council.
The GST council, a body comprising the finance ministers of states to be headed by the union finance minister, would be responsible for the proposed indirect tax regime’s structure. Any deviation from the agreed structure would require approval of two-third majority of states. However, the decisions would be taken with the approval of the finance minister.
However, in the event of a dispute within the council, the members would be able to appeal in the proposed tribunal, sources told The Indian Express.
The tribunal, which is based on the model of WTO Dispute Resolution Mechanism, would be empowered by the constitution to penalise the party not complying with the agreed norms. The sources said that the tribunal may penalise the states in form of lower compensation. However, the penalty for both the centre and states has not been worked out yet.