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Published in:

Volume 7 Issue 10
October-2020
eISSN: 2349-5162

Unique Identifier

JETIR2010184

Page Number

1428-1442

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Title

Role of finance commission in Centre and state financial relationship - After Goods and Services Tax

ISSN

2349-5162

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"Role of finance commission in Centre and state financial relationship - After Goods and Services Tax ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.7, Issue 10, page no.1428-1442, October-2020, Available :http://www.jetir.org/papers/JETIR2010184.pdf

Abstract

At present financial relations between the Centre and the States is not good as it used to be, because the States in India depend on the Centre for financial resource to dispose their responsibility towards the citizen of the country. To have a healthy financial relation between the Centre and the States, Government of India formed finance commission in 1951 under the article 280 of the India constitution. The finance commission plays a very significant role in the wake of implementation of GST, as GST has subsumed many indirect taxes, those taxes which were earlier levied, collected and retained by the State Governments. Goods and service tax is a big revolutionary tax reform in India, entire market is under a single tax system. Earlier the States Governments had the power to impose and collect certain indirect tax from the citizens but now except few state taxes all taxes are subsumed in one tax which is the Goods and service tax. The Centre and the State Governments have their share in the net tax proceeds under Goods and Services Tax. The finance commission has been maintaining the fiscal federalism in India after the independence as per the ambitions of the Constitution. There exist a revenue imbalance between the Centre and the State Governments. Constitution has made an arrangement to reduce the tax revenue imbalance between the Centre and the State Governments. Centre transfers 42% of tax revenue from divisible pool as per the finance commission recommendations of 15th finance commission. After the implementation of Goods and Service tax, Centre and State financial relationship has become more crucial, as tax revenue is highly skewed towards the Central government. Central Government should not make any delay in devolution of funds and Goods and service tax compensation to the losing States. .In this context the role of Finance commissions has been getting its importance in strengthening the financial relation among the Center and the State Governments in India.

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"Role of finance commission in Centre and state financial relationship - After Goods and Services Tax ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.7, Issue 10, page no. pp1428-1442, October-2020, Available at : http://www.jetir.org/papers/JETIR2010184.pdf

Publication Details

Published Paper ID: JETIR2010184
Registration ID: 301528
Published In: Volume 7 | Issue 10 | Year October-2020
DOI (Digital Object Identifier):
Page No: 1428-1442
ISSN Number: 2349-5162

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Cite This Article

"Role of finance commission in Centre and state financial relationship - After Goods and Services Tax ", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.7, Issue 10, page no. pp1428-1442, October-2020, Available at : http://www.jetir.org/papers/JETIR2010184.pdf




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