Goods And Services Tax vis-à-vis cooperative Federalism: Article

GST is a path breaking Indirect Tax reform which will create a common market by dismantling inter-state trade barrier. It was the GST who subsumed multiple Indirect Taxes like excise duty, service Tax, VAT, CST, etc. It was the France in 1954 that became the first country to implement GST. Within 62 years of its advent, about 160 countries adopted GST because this Tax has capacity to raise revenue in the most transparent and neutral manner. The idea of national Goods and Services Tax in India was mooted by Kelkar Task Force in 2004. The task force strongly recommended fully integrated ‘GST’ on national basic. Union Finance Minister Shri. P. Chidambaram, while presenting the central budget(2007-08), announced that GST would be introduced in India. In 2014, NDA government tabled the GST as the Constitution Bill. In 2006 this Constitution Bill received the assent of the president on 8th September, 2016 and became Constitution`s 101st Amendment, this paved the way for introduction of GST in India. Lok sabha passes the bill on 29th march, 2017 and with the receipt of the president`s assent on 12th April, 2017, the bill was enacted. Government is endeavoring to roll out
GST by 1st July 2017, by achieving consensus on all the issues relating thereto. It is geared to attain July as the deadline for implementation of GST across India. India had adopted a dual GST which had imposed concurrently by the centre and state i.e. centre and state will simultaneously Tax goods and services. GST is destination based Tax applicable on all transaction involving supply of goods and services for a consideration subject to exceptions thereof. GST in India will comprise of central Goods and Services Tax(CGST) which is levied and collected by central Government, State Goods and Services Tax(SGST) which is levied and collected by state government/union territories with state
legislature and Union Territory Goods and Services Tax(UTGST) which is levied and collected by Union Government without state legislature, on intra-state supplies of Taxable goods and/or services. Resultantly, Goods and Services Tax Network(GSTN) a special purpose vehicle has been set to provide shared IT infrastructure and services to central and state government, Taxpayer and other stakeholders for implementation of GST.

Cooperative federalism also called quasi federalism which means that a sate share the power between the union/centre and the state while inclining toward the strong centre. Cooperative federalism create a  relationship in which the national government strongly influence the
policies and behavior of state government, often through the use of funding for program.
The spirit of cooperative federalism has thus helped remove compartmentalisation of power to Tax.

The constitution of India has also been amended accordingly. This fundamental reordering of federal fiscal relations for the cause of common Goods shows the strength and resolve
of the federal structure. This convergence for the cause of larger public good has been made
possible, initially due to the mechanism of the Empowered committee of minister(EC) and the later the GST council. Under the GST regime, the central and state will act on the recommendation of GST council. GST council comprise of union finance minister union finance minister of states. 2/3 voting power is with state and 1/3 with centre which reflect the accommodative spirit of federalism. Consensus amongst member has been the guiding principle for taking decision leading up to GST’s launch on 1st July, 2017, through the constitution provides for decision being taken by a 3/4th majority of member present and voting. The very fact that there has been no need to resort to voting to take any decision taken till now there were so many meeting held so far to reflect the spirit of “one
nation, one Aspiration, one Determination”. There is harmonization of GST laws across the country as even through centre and each state legislature have passed GST Act, they are all based  on GST model which is jointly drafted by both state and centre. Consequently all the laws have virtually identical provisions. All the state have common definition of GST as well as common procedures, format in all laws, even the section and subsection in CGST and SGST act are same and also common compliance mechanism. Joint capacity building efforts by centre as well as state are being organized wherein the first time the training of officers of centre and state is being conducted under the auspices of National Academy of Customs, Indirect 8 and Narcotics(NACIN).NACIN has formed joint coordination committee in each state comprising of centre, state and NACIN officer for overseeing capacity building effort. Centre along with the state government official has been organizing joint trade awareness and outreach programs wherein for the first time the officer came together to create GST awareness amongst trade and other stakeholders.

Though GST will be Jointly administered by centre and state, for ensuring ease of  doing business, but the individual Taxpayer will have a single interface with only one Tax authority either centre or state. In order to encourage
cooperation and harmonise the decision under the both Acts, the officers appointed under the SGST Act or the UGST Act shall be authorized to be the proper officer for the purpose of CSGT Act and vice versa. GST intents to transform India into a true economic union, with the aim of
“one Nation, One Tax, One Market”. The free movement of goods and services will give fillip to employment opportunities and give consumer a wide choice and better prices. The economic integration will not only boost economics growth, but also bind the nation better. It is an idea whose time has come and would not have materialized but for the spirit of cooperation displayed by the centre and the state. Indeed, GST in India in its conception, enactment and implementation is an example of real ‘cooperative federalism’ at work, in tune with the unique character of India- ‘unity in diversity’.

By:  Shiva Tiwari, AMU

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