ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Where Are Panchayats in GST?

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One should not forget that in India, the government exists at three tiers: centre, state, and local, that is, at the panchayat and municipality level as well. This spirit of cooperative federalism is not reflected in the GST, as panchayats, which number at 2,56,252 and which consist of more than 3 million elected representatives, are excluded from a share in the same.

Cooperative federalism must travel down to the third tier of government because of the effects that the implementation of GST is likely to have on panchayats: (i) Drying up of finances, in the absence of a provision for revenue sharing between the states and panchayats in GST, (ii) while states derive their power to levy taxes from the Constitution, panchayats derive the same from the state legislatures, resulting in an absence of bargaining power, (iii) a further dilution of the autonomy of panchayats, (iv) a further weakening of rural governance, and (v) greater obstacles in the delivery of basic services.

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Published On : 20th Jan, 2024

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