Impact of Goods and Services Tax on the IndianEconomy: A Comprehensive Constitutional Analysis

Abstract

The Goods and Services Tax (GST) constitutes a transformative development in India’s constitutional and fiscal jurisprudence, marking a significant reconfiguration of the federal distribution of taxing powers under the Indian Constitution. Enacted through the Constitution (One Hundred and First Amendment) Act, 2016, GST introduced a harmonized indirect tax regime grounded in the principles of cooperative federalism, constitutional supremacy, and welfare-oriented governance. By replacing a fragmented system of Union and State taxes with a dual levy structure comprising Central GST, State GST, and Integrated GST, the reform sought to promote economic integration while preserving the autonomy of States within the constitutional framework. This paper critically examines the impact of GST on the Indian economy through the lens of constitutional jurisprudence, focusing on legislative competence, Center–State fiscal relations, and the evolving role of constitutional institutions such as the GST Council. The study analyzes GST considering Fundamental Rights, particularly equality before
law and freedom of trade and profession and evaluates its consistency with the Directive Principles of State Policy aimed at securing economic justice and equitable distribution of resources. Further, the paper explores judicial responses to GST-related disputes, administrative challenges, compliance burdens, and technological governance, highlighting the constitutional tension between uniform taxation and federal diversity. By incorporating State-level perspectives, including Assam, the study demonstrates how GST has reshaped fiscal federalism at the grassroots level, affecting local governance, revenue autonomy, and welfare delivery. The paper argues that GST is not merely a fiscal reform but a continuing constitutional experiment in shared sovereignty, democratic decision-making, and welfare state responsibility, requiring constant constitutional scrutiny and institutional refinement to ensure accountability, inclusiveness, and constitutional balance.