From Arthashastra to GST: Analyzing Taxation Guidelines in Indian Knowledge Systems for Modern Fiscal Reforms

The integration of the Indian Knowledge System (IKS) with modern developmental frameworks provides a foundation for balanced growth—a, sustainable, equitable, and holistic approach to development. While traditional, purely materialistic, or high-speed growth often leads to environmental degradation and social inequality, IKS offers a counter-narrative by emphasizing harmony with nature, ethical responsibility (Dharma), and community well-being. As discussed in the 56th GST council meeting, led by Union Finance Minister Nirmala Sitharaman and comprised of finance ministers of all states, a unanimous decision was taken to exempt the Goods and Services Tax (GST) on health insurance and life insurance policies. This paper explores the evolution of fiscal thought in India, bridging the gap between ancient Indian Knowledge Systems (IKS)—specifically Kautilya’s Arthashastra—and the modern Goods and Services Tax (GST) framework. By analyzing Kautilya’s principles of "painless" taxation and ethical revenue collection, we can find strategic parallels to modern anti-profiteering laws and digital compliance. The study proposes that integrating IKS-inspired balanced budgeting and anti-corruption measures can resolve contemporary fiscal hurdles like inverted duty structures.