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
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.