Implementation of Goods and Services Tax (GST) has led to a paradigm shift in the Centre-State relations both financially and politically. Critically examine its impact on states fiscal capacity and inter-state inequality.

  • December 16, 2021
  • Posted by: OptimizeIAS Team
  • Category: DPS Topics
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Hint: Here, you need to discuss how GST has impacted the centre-state relations financially and politically (Don’t get diverted by focussing on features of GST as major part).

Introduction (I): One line GST introduction and changes in Constitution it makes has huge impact on the centre-state relations.

Body (B): 1) Either you can discuss impact in two parts separately or at one place i.e., Political and financial impact.

In political impact: Positives like Cooperative federalism through platform like GST council and negatives like politicization of matter like compensation issues.

Financial impact: Discuss both positive and negative. With GST states are suppose to have better share from earlier, but their power of taxation compromised. A major tax reform in place which can in future better financial relations.

Conclusion (C): GST, though in initial stage has brought paradigm shift and going ahead it has to learn from early setbacks and serve as an effective platform.

CSE Mains Implementation of Goods and Services Tax (GST) has led to a paradigm shift in the Centre-State relations both financially and politically.