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William kentridge described the meaning of Triumphs and Laments as “Every victory has a corresponding defeat; therefore, for every person riding in triumph, there will always be someone following behind with a lament”

Similarly For GST which turned many stones over a time span of 5 years much remains still to be done . Let us look at what rare feats GST has achieved over the years and what challenges lies ahead.

Introduction and Legal background:

GST came into effect on 1st July 2017 as the 101th amendment of Constitution made by the Government of India. Though the Idea was first advanced by the Finance minister in the union budget speech for 2006-2007, It took around 12 years to mould that idea into a law. On the constitutional front a lot of changes were made to Give effect to it. Mainly Four Articles needs to be studied:

Article 246A:

It gives simultaneous power to Central and State Governments to make laws with respect to CGST and SGST/UTGST for Intra State Supplies.

Power to make Law with respect to IGST has been exclusively given to Central Government with respect to Inter State Supplies.

Five Petroleum Products namely-crude oil, natural gas, aviation fuel, diesel, and petrol would be covered under GST at a future date as the GST council may notify.

Article 269A:

Out of the IGST that is payable to Central Government 50% shall be transferred to the consuming /Destination state or retained by the Central Government when destination is a Union territory.

Article 366

GST shall be levied on Goods/Services excluding tax on Alcoholic liquor which is for human consumption

International transactions are construed same as inter state transactions.

Article 279A:

It gives constitutional Powers to the GST council to make recommendations to the union and states on important issues related to GST

GST council consists of Union finance minister as the chairman, Union minister of state in charge of Revenue and Finance, Minister Incharge of finance or taxation or any other minister nominated by the state Government.

Now let’s look at the performance of GST over the years


• The biggest triumph of GST is cooperative federalism as all the decisions are taken under the preview of GST Council.

GST collections has been sky rocketing as compared to the initial days where it is roughly around Rs 1.47 lakh crore for the month of September

• It has given a major boost to the Make in India initiative by making Indian Goods and Services competitive in the international market

• It has removed cascading effect to a great extent

Reduction in tax evasion has been reported which has positively contributed to the direct tax collection revenue.

Challenges that lies ahead:

• The COVID- 19 pandemic and consequent economic contraction had an adverse impact on the GST regime and it’s collection . Increase in consumption of luxury goods is one area that needs to be addressed

• The cooperative federalism which is the heart and soul of this regime seems to be missing as conflicts are reported between the centre and states over rates rationalization and slap rates

• Government plans to discontinue regime of payment of compensation to states will again put states and centre in a state of disagreement

Bringing Petrol and diesel under the ambit of GST have to be carefully tackled as inclusion would significantly reduce the cascading effect but initially would require a special duty slab to avoid revenue loss to the Government.

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April 2024