Journal Press India^®

               It is my pleasure to present to our readers another insightful issue of VISION covering diverse areas of topical interest in the area of Indian taxation. The papers in this issue cover the dimensions of federal finance, GST and international tax avoidance and evasion. In a federal polity like India, the essence of federalism lies in proper division of powers and functions among various levels of government to ensure adequate resources for their functioning. Two papers in this issue deal with different aspects of federal finance. The paper on ‘discretionary transfers by Dr. Chittaranjan Nayak and Priyabrata Satpathy examines the level, composition and disparity in per capita discretionary transfers from the Centre to the states; and explores the determinants of discretionary transfers. Their empirical results show that there is significant diversity in the level of discretionary transfers to states. However, the disparity is not due to political factors. The states with higher fiscal deficit have got more discretionary transfers than the states having lesser deficit. Special category states get higher discretionary transfers as it is inherent in the structure of such transfers. The paper by Dr. Niti Bhasin looks at the role of Finance Commission regarding the devolution of taxes between the Center and the States from the divisible pool. In particular, the paper focuses on the Fourteenth Finance Commission that has made far-reaching changes in tax devolution which is expected to move the country towards greater cooperative as well as competitive federalism.

                 Two papers in this issue deal with different aspects of Goods and Service Tax (GST): the most significant indirect tax reform in the history of the Indian tax system. The paper by Priyakrushna Mohanty and Anu Chandran entitled ‘GST and the Paradigm Shift: A Peripheral View’ provides insight into the beneficial impacts advocated by GST while highlighting the challenges. The authors suggest that constant monitoring, periodic evaluations, political will power and synergy between the Centre and States are imperative to obtain the desired benefits of GST. Another paper by Surbhi Gupta attempts to study the functioning of VAT/GST of 6 ASEAN countries - Philippines, Indonesia, Singapore, Vietnam, Thailand and Malaysia - and compare it with the Indian GST regime. An attempt has also been made to draw lessons for India from the experience of these countries. The author points out that India can learn from the pitfalls in administration and application of law in developing countries as well as from the successful administrative strategies of the developed countries like Singapore.

               Another pertinent problem addressed in this issue is of ‘international tax avoidance and evasion’ which is a serious problem in developing countries where the tax systems are still evolving. The paper on ‘International Tax Avoidance and Evasion with Special Reference to India’ analyses the various methods adopted for international tax evasion and avoidance such as tax treaties, tax havens, and transfer pricing, along with the general causes and impact of this evasion. While examining the history of taxation law amendments in India, it is seen that it is essentially a history of plugging loopholes, as and when discovered, to prevent leakages of revenue rather than making structural changes in the taxation system to strike at the root cause of the problem. India needs tougher laws and stricter enforcement of existing provisions to deal with the root causes of international tax evasion and avoidance

            The paper by Dr. Amit Kumar Singh, Rohit Kumar Shrivastav and Dr. Lovleen Gupta examines the trends and patterns of income tax in India. Their analysis shows that, in general, the overall tax burden has seen a reduction over a period of time thereby indicating the government’s intent to reduce the tax liability of tax payer and improve the standard of living of tax payers by allowing them more disposable income.

            As stated before, this issue of VISION sees a focus on pertinent issues in Indian taxation, such as challenges in implementation of GST, efforts towards cooperative federalism, trends in income tax patterns along with important insights for dealing with international tax evasion and avoidance. I sincerely hope that our readers find this issue of VISION as insightful as always and continue to provide us their patronage. I also hope that the VISION continues to get contributions from diverse and unexplored areas of Indian taxation.

Dr. M. M. Sury

Editor