This study explores the impact of Goods and Services Tax (GST) on fiscal federalism in Kerala, focusing on its implications for revenue generation, tax collection, and inter-state trade dynamics. It analyzes the dual GST model, which enables both the Union and States to impose taxes concurrently, but highlights the challenges posed by inconsistencies in tax rates across states. By examining the cost disparity between intra-state and inter-state transactions, the study identifies potential barriers to inter-state trade, as businesses may favor intra-state transactions to avoid higher integrated GST (IGST) rates. The research also delves into the legal framework of GST, questioning the sufficiency of Article 246A in addressing issues of repugnancy between central and state laws. The study calls for a more harmonized GST system to foster economic integration, reduce tax arbitrage, and clarify legislative authority in resolving conflicts between central and state GST laws. These findings provide valuable insights for policymakers, suggesting the need for further reforms to enhance the efficiency and equity of the GST system. Future research can expand these analyses to other states, contributing to the broader discourse on fiscal federalism in India.Top of FormBottom of Form
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Ajay et al. (2025) studied this question.