Abstract

This article critically examines the impact of the Goods and Services Tax (GST) on the principles of federalism within the context of the Indian taxation system. GST, introduced in 2017, aimed to simplify the tax structure by unifying various indirect taxes levied by the central and state governments. While the GST promised economic efficiency and uniformity, this study delves into its repercussions on the federal structure of India. The analysis begins by exploring the historical evolution of federalism in India and the constitutional framework that delineates the powers and responsibilities of the central and state governments. Subsequently, it scrutinizes the redistributive implications of GST, questioning whether the uniform tax rates and centralized administration erode the autonomy of states. The article also examines the decision-making process within the GST Council and its potential impact on the federal character of governance. Furthermore, the article investigates the challenges faced by states in adapting to the GST regime, especially considering the diverse economic landscapes and fiscal capacities across different regions. It explores how the one-size-fits-all approach of GST may exacerbate existing economic disparities among states, thereby challenging the principles of cooperative federalism. Through a comparative analysis with international models of federal taxation, the article aims to provide insights into whether the Indian GST model aligns with or deviates from global practices in maintaining a balance between centralized revenue generation and regional autonomy. The findings of this study contribute to the ongoing discourse on the effectiveness and fairness of the GST in upholding the principles of federalism, shedding light on the potential need for reforms in the Indian tax structure.

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