GST – An Overview over the Years


  • Dr. R. Maheshvari


In any country, it is the main responsibility of the Government to fulfil the increasing requirements of the states and its people with the help of public expenditure. India, being a developing economy, has been striving to fulfil the functions of a Welfare State with its limited resources; the primary source of revenue being the levy of taxes. Though the collection of tax is to augment as much revenue as possible to the Government to provide public services, over the years it has been used as an instrument of revenue policy to stimulate economic growth. Thus, taxes are collected to fulfil the socio-economic objectives of the Government. In the absence of a strong reason for interference, such as the need to reduce pollution, the first objective, resource allocation, is furthered if tax policy does not interfere with market-determined allocations. The second objective, income redistribution, is meant to lessen inequalities in the distribution of income and wealth. The objective of stabilization is implemented through tax policy, government expenditure policy, monetary policy, and debt management is that of maintaining high employment and price stability.