Shakti DubeyAIR 1 · CSE 2024 · 206 wordsTheir whole copy
Opening
Indian model of Federalism is appreciated for it's accomodative nature but at the same time faces criticism on several aspects one of them being issue of Financial Decentralisation.
Body · points
Financial resources of centre
Schedule VII provides for three lists - Union, state & concurrent, dividing the powers between centre & state.
(1) The centre has power to tax the item in the Union list.
(2) Apart from this other sources of revenue for centre are :- Income tax, Excise duty, custom duty, tax on interstate-movement of goods, etc.
(3) The centre can assume power to tax the items in the state lists as well - when & if required & this shows centralising tendency of Indian Federalism.
Financial resources of states :-
state on the other hand have right to tax :- (1) Items in state list (2) They mostly depend on indirect taxes as a source of their revenue and income
With the introduction of :- Goods and services Tax - it has provided for :- (1) concurrent taxation power for both centre as well as state (2) GST has 3 component → SGST → CGST → IGST (3) The state has power to collect GST on items like :- Alcohol, petroleum, electricity, etc
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