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LATEST NEWS UPDATES | GST’s ‘give-and-take’ attitude has dried up. India needs a system overhaul -TM Thomas Isaac

GST’s ‘give-and-take’ attitude has dried up. India needs a system overhaul -TM Thomas Isaac

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published Published on Aug 27, 2022   modified Modified on Aug 28, 2022

-ThePrint.in

In 'The Working of the Indian Constitution', T.M. Thomas Isaac examines the functioning of GST to assess if its high expectations have been realised.

The Goods and Service Tax (GST) Council has been hailed as a model federal institution, where both states and the centre are represented, and consensus is arrived through a detailed deliberative process. Until the 38th GST Council meeting in December 2019, there had not been a single instance of voting, despite strong differences of opinion voiced on many issues. They were settled in a spirit of give and take. That acrimonious meeting on the modification of the existing rate structure of lotteries was indeed a sign of changing times. By the end of the next year, the Council was on the brink of a serious disruption with the centre and states sharply diverging in their stand regarding the payment of GST compensation.

The emergence of GST has been the most important event in the history of centre–state relations since the adoption of the Indian Constitution. According to the Constitution, powers to levy personal income tax, corporation tax, excise (other than on alcohol for human consumption), customs duties and service tax were the domain of the centre. The responsibility for taxes on intra-state purchase and sale of goods lay with the respective states. The tax on intra-state trade took the form of sales tax, turnover tax, surcharges, luxury tax and various types of entry taxes. Sales tax, which was imposed at the first point of sale, and for some commodities at multiple points of sale, was replaced by value added tax (VAT).

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* originally published in IIC Quarterly.


ThePrint.in, 27 August, 2022, https://theprint.in/pageturner/excerpt/gsts-give-and-take-attitude-has-dried-up-india-needs-a-system-overhaul/1101525/?fbclid=IwAR2By6dnHZ3ohC3JQHgPeP8b_KkTjNuk__yXpnTFGRLzCgroJOY_XTsnxXI


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