Interplay Between GST And Doctrine Of Pith And Substance

Thakshinamoorthy S, BBA.LLB (Hons.), School of Excellence in Law, The Tamilnadu Dr. Ambedkar Law University

Sri Harini M, BBA.LLB (Hons.), School of Excellence in Law, The Tamilnadu Dr. Ambedkar Law University

ABSTRACT

The countries around the globe are making tremendous progress in establishing themselves a self-sufficient and sovereign state. With the increased technological advancements and worldwide movement towards sustainable development, there is a crucial need to balance the various internal affairs of a country so as to ensure efficient governance and healthy fiscal relations. A government requires strong financial stability in order to carry out the administrative functions smoothly. Therefore revenue collection and distribution must be harmoniously construed within the country. As a move towards it, a standard tax regime was launched to establish one uniform tax throughout the country and eliminate other trivial taxes. The Goods and Service tax introduced in 2017 aims to facilitate the distribution of revenue between the centre and states without any disparities and uniform allocation of resources. The Constitution (One Hundred and First Amendment) act, 2016 inserted article 246A which created the provision to impose the GST by the parliament and concerned state legislatures of India. Here the doctrine of pith and substance would enable us to demarcate the fiscal powers between the centre and states and thereby uphold the spirit of fiscal federalism. This presentation provides an overview of how doctrine of pith and substance is interpreted in harmonizing financial relations in a federation.