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The GST tax act is the largest
ever fiscal legislation that subsumes and unifies all the erstwhile indirect
taxes into one common and unified tax. It would terminate multiple taxes all
around the country and would create an equal level playing field for all the
stakeholders throughout the country. It paves way for the economic integration
and homogenization of India which was missing till now. GST law is the perfect specimen
of cooperative federalism where the union and states have abandoned their power
to realise the marvel and vision of one economic India. It’s is a giant leap
that charts a new avenue for fiscal federalism in our country that aims on
synergy, concord and concurrence instead of self-centeredness. This new
commitment to reconcile union and state law into a harmonious legislative
entity would become the hallmark of cooperative federalism.1


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The essence of
federation2 is the existence of union
and state and the distribution of power3 among the union and states4. The Constitution of India
provides for a federation which has strong centralising tendencies.5 The federation of India
does not follow the principle of “traditional federalism”6, which is often attributed
with the Constitution of US7. The Indian federalism has
its own colour and peculiarity, has been designated as a basic feature of the
Indian Constitution.8

101st Amendment to the constitution has established the concurrent
taxing in the country for the first time. A new conceptum has been adopted and
embraced where the union and states will concomitantly levy tax on both goods
and Services.9
The new taxing regime has given certain privileges and powers to the centre,
but in absolute pursuance and consonance of our constitutional scheme.


word ‘cooperative federalism’ for the first time was defined by A.H Birch in
his book10
as “the practise of administrative cooperation between general and regional
government, the practical dependence of the regional governments upon payments
from the general governments”. The concept of cooperative federalism can be
traced back to the period of World War II which led to the formation of K.C
Wheare’s definition of federalism: ‘the general and regional governments of the
country shall be independent each of the other within its sphere’11. The federal structure of India is a perfect example
of cooperative federalism.12 The goal of Indian
Constitution as mentioned in the preamble has never been to maintain the
concrete or traditional federal structure but to constitute Indian into a
Sovereign, Socialist, Secular, Democratic, Republic.13 The scheme of the Indian Constitution
makes it clearly visible that, the institutions i.e. Union and State meet and
interact at various levels in a manner which makes them achieve the cherished
constitutional goal of co-operative federalism.14

GST has not usurped the taxing powers of the state so as to
jeopardise the states. Owing to our federal structure, GST is dual15, levied
and managed by different administrations. Centre would levy and collect Central
Goods and Services Tax (CGST)16, and
States would levy and collect the State Goods and Services Tax (SGST) on all
transactions within a State17. The
union government will have the plenary power to levy and collect GST in the
course of interstate trade or commerce, or imports known as Integrated GST (IGST)18 but the
amount so collected shall be arrogated and appropriated by both central and
state governments. The rates for CGST, SGST and IGST will be administered by
the GST council which is neither an agent of States nor of Centre.19 The GST
council with have representatives from both union as well as the States, also
the council is not a body of the Union but an independent body in itself.20 Parliament and legislature of every state, have power to make laws with
respect to goods and services tax imposed by the union or by such state.21 A law
made by Parliament in relation to GST will not override a state law on GST.22 GST
is a great example of cooperative federalism where the States and Central
government have collectively surrendered their taxing power, in order to adopt
the GST. This is a very good sign that more than half of the states have also
assented to the amendment, this portrays the development of cooperation between
states and centre.


The primary focus of the constitution makers
was never to devise a federal or a non-federal constitution but to have a
system of governance which would cater to the needs of the people and meet the
challenges of the changing world.23 It was opined by C.
Rangarajan that Federal structures will undergo a change in order to be able to
respond to the forces of globalisation and international competition that
emerges as a consequence.24 The need for economic
growth and development has necessitated the parliament of India to bring the
impugned amendment25. GST act is in support of
the cooperative federal structure and therefore paves the way for holistic
growth.  GST law has been brought to
achieve the values and ideals enshrined in the Preamble, part III26 and part IV27 of Indian Constitution. The
Indian Constitution has been amended, to meet the current economic and fsical
challenges of the modern world. The federal structure of India will undergo a
change due to this amendment but the amendment in no way violates the federal
frame work of the Indian Constitution, but rather it strengthens the cooperative
federation of India.

Robert Schutze, From Dual to Cooperative federalism, The Changing Structure of
European law 103 (1st ed., 2009)

O. Chinappa Reddy, The Court and the
Constitution of India  222 (1st
ed. 2008).

Herman Fine, The Theory and Practise of
Modern Government 166 (4th ed. 1961).

A.V. Dicey, The Law of the Constitution
157 (10th ed. 1959).

Bhim Singh v. U.O.I & Ors, (2010) 5 SCC 538.

Dr. Pradeep Jain etc. v. Union Of India And Ors., AIR 1984 SC 1420; see also Kuldeep Nayar & Ors. v.
Union of India & Ors., (2006) 7 SCC 1.

P.K Tripathi, Federalism: The Reality and
the Myth, J.B.C.I. 254 (Aug 1974); see
also Jindal Stainless Steel v. State of Haryana, (2017) 12 SCC 1; see also D.P.
Kommers & J.E. Finn, American Constitutional Law 273 (3rd. ed.).

S.R Bomai v. Union of India, AIR 1994 SC 1918.

INDIA Const. art. 246A.

A.H. Birch, Federalism, Finance, and Social Legislation in Canada, Australia,
and the United States 305 (1st ed. 1955).

K.C Wheare, Federal Government 10
(4th ed. 1963).

R.S Sarkaria,  Sarkaria Commission on Centre-State Relations,
No. IV/11017/1/ 83- CSR93 (1983).

P.K Tripathi, Federalism: The Reality and
the Myth, J.B.C.I. 268 (Aug 1974).

Swaraj Abhiyan v. Union of India, 2007 SCC Online SC 782.

INDIA Const. art. 246A.

The Central Goods and Services Tax Act, 2017, No. 12, Acts of Parliament, 2017.

INDIA Const. art. 246A, cl. 1.

INDIA Const. art. 269A, cl. 1.

INDIA Const. art. 279A.


INDIA Const. art. 246A, cl. 1.


Dr. Chanchal Kumar, Federalism in India a
critical appraisal, 3 JBM & SSR (September 2014).

C. Rangarajan, Fiscal Federalism Some
Current Concerns, 2 I.J.F.S. 13 (2012).

The Central Goods and Services Tax Act, 2017, No. 12, Acts of Parliament, 2017.

INDIA Const. part. III.

INDIA Const. part. IV.

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