Overview
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Context
The Supreme Court, emphasising on the importance of “cooperative federalism” for the well-being of democracy, held that Union and State legislatures have “equal, simultaneous and unique powers” to make laws on Goods and Services Tax (GST) and the recommendations of the GST Council are not binding on them.
Background
Analysis
The apex court ruling
The GST Council makes recommendations on:
Taxes Subsumed Under GST At the Central level, the following taxes are subsumed:
At the State level, the following taxes are subsumed:
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Achievements of GST Regime
Challenges that remains
Reforms needed
What is cooperative federalism?
Cooperative federalism (marble-cake federalism), is defined as a flexible relationship between the federal and state governments in which both work together on a variety of issues and programs for larger public interest.
Cooperative Federalism in India
Fault lines in the Indian model of Federalism
How to strengthen federalism in India?
Conclusion
The implementation of GST in a large and diverse federal country ruled by different political parties is a remarkable achievement. The need of the hour is for centre and state to work together to raise revenue productivity. In the backdrop of economic slowdown and state’s tight fiscal space, centre can consider extending GST compensation to the states.
Q1. Despite the impressive milestones achieved by the GST regime, certain issues remain. Examine Q2.Cooperative federalism is the only democratic way for the smooth functioning of Centre-State interactions. Illustrate. Or A fundamental problem in the GST is the erosion of ‘trust’ between the States and the Centre. Critically evaluate. |
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