No legal requirement for any further clarification in GST notifications: Finance Ministry

Clearing the uncertainty over levy of excise duty, the Finance Ministry has said that there is no "legal infirmity" in the notifications issued by the government with regard to the GST Constitution Amendment Act. Revenue Secretary Hasmukh Adhia has stated that there is no legal requirement for any further clarification or notification issued for the Constitution (One Hundred and First Amendment) Act, 2016. He further said that the law department has confirmed that there appears to be no authorised requirement to issue any further clarification or notification in this regard.

There was some confusion following the notification with regard to amendment of Entry 84 of the Union List following which the Centre can levy excise only on petroleum crude, high-speed diesel, petrol and natural gas. Doubts were being raised on legality of levying excise duty by the Centre on various commodities till implementation of the goods and services tax (GST) from April 1, 2017.

Entry 84 of the Union List of the Constitution allowed the Centre to levy excise duty on tobacco and other goods with the exception of potable alcohol, opium and narcotic drugs, but after the government on September 16 notified certain provisions of the Act it t was speculated whether the government could legally collect excise duty till the day GST, which will subsume excise duty in addition to service tax and other levies, is implemented. However some other views  are that the notifications are legally correct as the Centre has the power under Entry 97 of the Union List to levy taxes on goods which are not mentioned in any List under the Seventh Schedule of the Constitution. Entry 97 says the Centre will have powers on any other matter not enumerated in List II or List III, including any tax not mentioned in either of those lists. List II under the Seventh Schedule of the Constitution deals in subjects on which states have legislative powers while List III is the concurrent list wherein both the Centre and states can make laws.