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

GSTSubscribe to GST

A Fatal Blow to the Goods and Services Tax

The Supreme Court’s judgment in Union of India v Mohit Minerals (P) Ltd (2022), while interpreting the 101st Amendment, has weakened the governance framework of the goods and services tax. The Court’s approach in the matter has exposed the fatal contradictions of the GST architecture in the Constitution and should prompt a rethink on how the GST framework needs to change to promote true cooperative federalism.

States’ Debt Burden Surges to a 15-year High

Strengthening the pandemic-devastated state finances will help boost both welfare and growth.

Fifteenth Finance Commission Recommendations

While trying to balance the competing demands from the union and the states, the Fifteenth Finance Commission has done a commendable job, but has also sacrificed objectivity at times.

Making Digital Financial Inclusion a Reality

Technology has had a disruptive effect on the delivery of fi nancial services, and adoption of digital solutions could help accelerate fi nancial inclusion. This article creates a road map for digital fi nancial inclusion in India using the framework based on the eight high-level principles of G-20 nations. While evaluating the progress under each one of these principles, the article concludes with policy recommendations both on supply and demand sides to achieve the coveted digital fi nancial inclusion.

A Tax Reform Gone Awry

The continuous cuts in the goods and services tax rates will derail state finances.

Impact of COVID-19 on MSMEs

Micro, small, and medium enterprises contribute a third of India’s gross domestic product and provide employment to over 110 million workers. Using a mixed methods design to ascertain the level of sectoral distress at the peak of the nationwide lockdown in May 2020, we found production falling from an average of 75% of capacity to just 13%. On an average, firms retained only 44% of their workforce, and 69% of firms reported inability to survive longer than three months. Distress measures were more severe for smaller firms by employment size.

Cooperative or Coercive Federalism

The purpose of this article is to throw light on certain provisions of the Union Budget 2021–22 that have diluted the spirit of cooperative federalism in the country. These setbacks for the states will eventually push them at a subordinate position vis-à-vis central government, defeating the core...

Is the 14% Revenue Guarantee to States Justified?

When the goods and services tax was introduced in July 2017, states were given a revenue guarantee of 14% per annum on their GST revenue over the base year 2015–16. Using data on revenue from subsumed taxes for 24 states and two union territories during the years 2012–16 preceding the GST, it is investigated whether the 14% revenue guarantee was justified. Not many states had a growth rate of subsumed taxes higher than 14% pre-GST, with most of them falling in the 5%–12% growth rate band. It is estimated that the potential savings in the compensation payment due from 1 July 2017 to 31 March 2020—if the states were assured of compensation at their respective historically achieved tax buoyancy—would have ranged between ₹ 1.8 lakh crore and ₹ 2.12 lakh crore.

The State of State Finances

Only a generous award by the Fifteenth Finance Commission can restore fiscal balance. */ */

Fifteenth Finance Commission Award for 2020–21

The first report of the Fifteenth Finance Commission has allayed many fears that arose after the notification of the terms of reference of the commission. The main report for the period 2021–22 to 2025–26 will have to factor in the devastating impact of COVID-19 on the economy and provide adequate fiscal space to the states for socio-economic response and recovery.

The Impasse over GST Compensation

The GST council should arrive at a consensus to compensate the states for revenue shortfalls.

Small Businesses, Big Reform

This paper draws evidences from field surveys to bring out the impact of the goods and services tax on the micro, small and medium enterprises by exploring issues of coverage, rate, selection and exemption of taxation, and subsequently, its effect on the competitiveness and viability of these businesses. The coping mechanisms the units undertook to tide over the crisis they faced as well as the GST Council responses are also discussed.

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