The article analyzed that the opportunities for states to independently levy taxes have decreased after the implementation of GST. Although the role of states in tax collection continues, it is stated that financial freedom has been limited as major decisions have been taken under the purview of the GST Council. It is felt that although industrial states like Tamil Nadu are generating high revenue, they are not getting adequate benefits from the central fund distribution system. The author suggested that there is a need to balance the financial distribution system by considering the development needs of the states, population and industrial status. He opined that states should be given more financial independence in a federal system.
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Impact on revenue freedom of states after GST
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tmanasa
- June 24, 2026
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The article analyzed that the opportunities for states to independently levy taxes have decreased after the implementation of GST. Although the role of states in tax collection continues, it is stated that financial freedom has been limited as major decisions have been taken under the purview of the GST Council. It is felt that although industrial states like Tamil Nadu are generating high revenue, they are not getting adequate benefits from the central fund distribution system. The author suggested that there is a need to balance the financial distribution system by considering the development needs of the states, population and industrial status. He opined that states should be given more financial independence in a federal system.
