The GST Template
Recent Reforms, Consensus-Building, and India’s Tax Federalism
GK & Current Affairs for CLAT | CLAT Current Affairs 2026
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Introduction
The Goods and Services Tax (GST), introduced in July 2017, represented the most ambitious reform in India’s indirect tax system. By subsuming 17 state and central taxes and 13 cesses, GST sought to simplify taxation, reduce compliance burdens, and create a “one nation, one tax” framework.
However, the implementation journey of GST has been far from smooth. Issues of rate rationalization, compliance burdens, and revenue sharing between the Centre and states created tensions within India’s federal system.
In September 2025, the GST Council approved the most far-reaching recalibration since GST’s inception, including rationalization of tax slabs, revenue guarantees for states, and a model of cooperative federalism. This development is significant because it strengthens India’s fiscal federalism, provides predictability for businesses, and showcases consensus-building among the Union and states.
For CLAT Current Affairs 2026, this issue is vital as it combines constitutional provisions (Articles 246A, 279A), taxation law, and federal governance. Aspirants preparing with the best online coaching for CLAT or through online coaching for CLAT must analyze both the legal and economic dimensions of GST reforms.
Why in News
- 56th GST Council Meeting (September 2025): Approved reforms termed as the “most far-reaching recalibration since GST’s inception”.
- Rationalization of GST slabs and simplification of compliance measures.
- Doubling of GST collections over the past six years indicates stability.
- States’ concerns over autonomy addressed through revenue guarantees and consensus-based decision-making.
- GST model now seen as a template for broader consensus in India’s cooperative federal structure.
Point-wise Summary of the Article
- Historical Background
- GST idea first conceived in 1985 under VP Singh.
- MODVAT (Modified Value Added Tax) introduced in 1986.
- 1991 Balance of Payments crisis revived tax reform debates.
- GST formally launched in July 2017, subsuming multiple indirect taxes.
- Impact of GST (2017–2025)
- Subsumed 17 taxes and 13 cesses.
- Expanded taxpayer base from 60 lakh in 2017 to 1.5 crore by 2025.
- GST collections increased from ₹4.5 lakh crore to ₹13 lakh crore.
- CAGR of 14.4% in revenue growth.
- Recent GST Council Reforms (2025)
- Rationalization of GST slabs.
- Simplification of compliance, making business easier.
- Revenue guarantees to states until 2030.
- Unanimous approval by all states, showcasing cooperative federalism.
- Consensus-Building in GST Council
- Chaired by Union Finance Minister, with representation of all states.
- One state, one vote principle strengthens federal spirit.
- Group of Ministers, chaired by Bihar CM Samrat Choudhary, helped build consensus.
- Economic Impact
- Boosts predictability and stability for businesses.
- Encourages investment and formalization of economy.
- Doubling of GST collection over six years shows success.
- Challenges Noted
- Concerns over state autonomy persist.
- Compliance burdens for small businesses remain.
- Need to balance revenue neutrality with growth-oriented reforms.
Explanation of Peculiar Terms (Notes)
- GST (Goods and Services Tax):
A single indirect tax system introduced in 2017, replacing multiple central and state taxes. - GST Council:
Constitutional body under Article 279A, chaired by Union Finance Minister, with all state finance ministers as members. - Revenue Neutral Rate (RNR):
The tax rate at which revenue for states and the Centre remains unchanged after shifting to GST. - MODVAT (Modified Value Added Tax):
Introduced in 1986 as a precursor to VAT/GST, allowed tax credit on inputs. - Consensus-Building:
A federal mechanism where Union and states negotiate and approve reforms unanimously.
CLAT-Oriented Analysis
- Relevance for CLAT Current Affairs 2026
- GST reforms touch constitutional law, taxation law, and federalism.
- Possible comprehension passages on GST Council decisions or fiscal federalism.
- Legal Dimension
- Article 246A: Special power to Union and states for GST.
- Article 279A: Establishes GST Council.
- Judicial review of GST disputes possible under Article 131 (Centre-State disputes).
- Economic and Social Impact
- Simplifies taxation, reducing cascading effects of multiple taxes.
- Expands formal economy, aiding compliance and widening the tax base.
- Increases Centre-state cooperation, reducing fiscal disputes.
- Possible CLAT Questions
- When was GST launched in India?
- Under which constitutional article was the GST Council established?
- Who chairs the GST Council?
- What is the significance of the September 2025 GST reforms?
- Strategic Importance
- GST success strengthens India’s image as a reform-oriented economy.
- Consensus-building model can be applied to other governance areas (labour, agriculture).
Conclusion
The September 2025 GST Council decisions mark a milestone in India’s tax reform journey. By rationalizing slabs, simplifying compliance, and extending revenue guarantees to states, GST has become not only a taxation tool but also a model of cooperative federalism.
For CLAT Current Affairs 2026, this is an essential topic. It highlights how law, economics, and federal politics intersect in shaping policy. Students preparing with the best online coaching for CLAT or through online coaching for CLAT should treat GST not just as a tax reform but as an example of consensus-driven governance in India’s federal system.
Modi–Xi Meeting and the Future of Sino-Indian Relations
GK & Current Affairs for CLAT | CLAT Current Affairs 2026
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Introduction
India–China relations have long been marked by cooperation and confrontation, alternating between strategic partnerships and sharp border conflicts. The term “Chindia”—coined to signify the potential synergy between Asia’s two largest economies—captures both the promise and pitfalls of this complex relationship.
In September 2025, Prime Minister Narendra Modi visited Beijing for the first time in seven years and met Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) summit. The meeting did not lead to dramatic breakthroughs, but it marked a symbolic shift from confrontation to conversation, reopening channels of dialogue after years of silence following the Galwan Valley clashes of 2020.
For CLAT Current Affairs 2026, this issue is significant as it merges international relations, trade law, border disputes, and multilateral diplomacy. Students preparing with the best online coaching for CLAT or through online coaching for CLAT must grasp both the geopolitical context and legal dimensions of Sino-Indian relations.
Why in News
- Modi visited Beijing in September 2025, his first visit in 7 years.
- Met Xi Jinping on the sidelines of the SCO Summit.
- Meeting seen as a deliberate pivot from confrontation to dialogue.
- Comes after Galwan Valley clash (2020) where 20 Indian soldiers were killed.
- Symbolizes attempts at resetting ties while mistrust and asymmetry persist.
Point-wise Summary of the Article
- Background: The Shadow of Galwan
- 2020 Galwan clash (20 Indian soldiers killed) froze ties.
- Trade slowed, flights ceased, and border tensions escalated.
- “Chindia” vision of synergy was shelved.
- Symbolism of Modi–Xi Meeting
- Marked a pivot to dialogue after years of disengagement.
- Indian pilgrims allowed to Tibet again; direct flights resuming.
- Border patrols resuming under cautious engagement.
- Historical Context
- India was among first nations to recognize People’s Republic of China.
- Both engaged in Asian Relations Conference (1947) and Bandung Conference (1955).
- “Hindi–Chini Bhai Bhai” era of optimism collapsed after the 1962 war.
- Current Asymmetries
- China’s economy nearly 5 times larger than India’s.
- Massive trade deficit persists.
- Border remains unsettled; status quo ante of April 2020 not restored.
- Geopolitical Shifts
- Both nations stress need for strategic autonomy and multipolarity.
- Publicly criticize US-led “bullying”.
- Yet mistrust persists: India wary of China’s influence in South Asia and Indo-Pacific.
- Outcomes of Meeting
- No major agreements but reaffirmation of principle that differences should not prevent cooperation.
- Dialogue emphasizes self-reliance and partnership in specific areas like trade, tourism, and cultural exchanges.
- Challenges Ahead
- Trust deficit remains high.
- Border dispute unresolved, patrolling fragile.
- Economic asymmetry creates dependency risks.
- Both sides face domestic political pressures limiting concessions.
Explanation of Peculiar Terms (Notes)
- Chindia:
Portmanteau of China + India, coined to reflect potential economic and strategic synergy. - Galwan Valley Clash (2020):
Deadly skirmish in Ladakh between Indian and Chinese troops; worsened bilateral ties. - SCO (Shanghai Cooperation Organisation):
Regional grouping led by China and Russia, with India, Pakistan, and Central Asian nations as members. - Status Quo Ante:
Latin term meaning “the way things were before.” In border context, refers to restoring pre-Galwan positions. - Bandung Conference (1955):
Asian-African conference promoting decolonization and cooperation among newly independent nations.
CLAT-Oriented Analysis
- Relevance for CLAT Current Affairs 2026
- India–China ties may appear in passage-based international relations questions.
- Issues of sovereignty, treaties, and trade law are highly examinable.
- Legal Dimension
- Border disputes tie into international law principles of sovereignty and territorial integrity.
- Trade imbalances linked to WTO norms and bilateral agreements.
- SCO framework highlights multilateral diplomacy under international law.
- Economic Implications
- India’s trade deficit with China impacts manufacturing and Atmanirbhar Bharat.
- Dependence on Chinese imports in electronics and pharmaceuticals persists.
- Strategic Dimension
- China’s rise challenges India’s influence in Asia.
- India counters through alliances like Quad (India, US, Japan, Australia).
- SCO provides a forum where India balances rivalry with cooperation.
- Possible CLAT Questions
- What does “Chindia” signify?
- What was the significance of the Galwan Valley clash?
- What is the SCO, and why is it important?
- What does “status quo ante” mean in border disputes?
Conclusion
The Modi–Xi meeting in Beijing (2025) may not have produced landmark agreements, but it is a symbolic turning point. It suggests that despite deep mistrust, India and China are willing to re-engage in dialogue.
The concept of “Chindia”—though dented by conflict and asymmetries—remains relevant in a world where Asia’s two giants must find ways to coexist, compete, and occasionally cooperate.
For CLAT Current Affairs 2026, this topic highlights how international law, diplomacy, and economic policy converge in shaping India’s foreign relations. Students preparing with the best online coaching for CLAT or through online coaching for CLAT should view India–China ties as a dynamic case study in global geopolitics.
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