(i) GST is an indirect tax.
(ii) GST is replaced by indirect taxes in India.

According to Adam smith, there are four canons or maxims of taxation. They are as follows.
(i) Economical
(ii) Equitable
(iii) Convenient
(iv) Certain
(v) Efficient and flexible

(i) CGST - Central Goods and Services Tax
(ii) SGST - State Goods and Services Tax
(iii) IGST - Integrated Goods and Services Tax

Income tax, wealth tax, corporate tax, capital gains tax.

(i) "Public finance is one of those subjects that lie on the border linè between Economics and Politics. It is concerned with income and expenditure of public authorities and with the adjustment of one to the other". . - Huge Dalton
(ii) Public finance is an investigation into the nature and principles of the state revenue and expenditure - Adam Smith

(i) Grants - in- aid from the state government.
(ii) Land cesses
(iii) Toll, fees etc.
(iv) Income from the property and loans from the State Government.
(v) Income from fairs and exhibitions.
(vi) Property tax and other taxes
(vii) Grants for the centrally sponsored schemes relating to development work.

Principles of federal finance:
(1) Principle of Indiependence
(2) Principle of Equity
(3) Principle of Uniformity
(4) Principle of Adequacy
(5) Principle of Fiscal Access
(6) Principle of Accountability

(i) Primary deficit is equal to fiscal deficit minus interest payments. PD = Fiscal deficit (FD) - Interest Payment (IP)
(ii) It shows the real burden of the government and it does not include the interest burden on loans taken in the past.
(iii) It shows the borrowing requirement of the government exclusive of interest payments.

Defence
1. The Government protects the people from external aggression and internal disorder.
2. Through police and military forces it renders protective services.
Judiciary:
1. It provides adequate judicial structure to render justice to all citizens.
Enterprises
1. The regulation and control of private enterprise comes under the government.
Social Welfare:
1. The state provides education, social security, social insurance, health and sanitation for the people.
Infrastructure
1. Modern States build the base for the economic development of the country by creating social and economic infrastructure.
Macro-economic policy
1. The Government follows fiscal policy and monetary policy to achieve macro economic goals.
Social Justice
1. During the process of growth certain sections of the economy gain at the cost of others.
2. Government intervenes with fiscal measures to redistribute income.
Control of Monopoly
1. State intervenes through control of monopolies and restrictive trade practices to curb concentration of economic power.

Canon of Ability
1. The Government should impose tax in such a way that the people have to pay taxes according to their ability.
2. Rich person should pay more tax.
Canon of Certainty
1. There is no uncertainty regarding the rate of tax or the time of payment.
Canon of Convenience
1. The method of tax collection and the timing of the tax payment should be convenient to the people.
Canon of Economy
1. The Government should impose only those taxes whose collection costs are very less and cheap.

(i) Finance Commission aims to reduce the fiscal imbalances between the centre and the states (Vertical imbalance) and also between the states (horizontal imbalance). It promotes inclusiveness.
(ii) A Finance Commission is set up once in every 5 years. It is normally constituted two years before the period. It is a temporary Body.
(iii) The 14th Finance Commission was set up in 2013. Its recommendations were valid for the period from 1st April 2015 to 31st March 2020.
(iv) The 15th Finance Commission has been set up in November 2017. Its recommendations will be implemented starting 1 April 2020

(i) The macro economic targets to be achieved within a plan period;
(ii) The basic strategy of the budget;
(iii) The financial requirements of different projects;
(iv) Estimates of the revenue expenditures (includes defence expenditure, subsidy, interest payment on debt etc.);
(v) Estimates of the capital expenditures (includes development of railways, roadways, irrigations etc.);
(vi) Estimates of revenue receipts from tax and non-tax revenues;
(vii) Estimates of capital receipts from the recovery of loans, disinvestment of public sector units, market borrowings etc.
(viii) Estimates of the gap between revenue receipts and revenue expenditure; and
(ix) Estimates of fiscal deficit, primary deficit, and revenue deficit.
(x) Finance commission is a quasi-judicial body set up under Article 280 of the Indian Constitution. It was established in the year 1951, to define the fiscal relationship framework between the Centre and the state.

Principle of Independence
(i) A Government should be autonomous and free about the internal financial matters concerned.
(ii) Each Government should have separate sources of revenue, authority to levy taxes, to borrow money and to meet the expenditure.
Principle of Equity
(i) The resources should be distributed among the different states so that each state receives a fair share of revenue.
Principle of Uniformity
(i) Each state should contribute equal tax payments for federal finance.
Principle of Adequacy of Resources
(i) The resources of each Government should be adequate to carry out its functions effectively to meet current and future needs.
(ii) Resources should be elastic to meet the growing needs and unforeseen expenditure.
Principle of Fiscal Access
(i) The Central and State Governments must be able to develop new source of revenue.
Principle of Integration and coordination
(i) There should be perfect coordination among different layers of the financial system.
Principle of Efficiency
(i) The financial system should be well organized and efficiently administered.
(ii) There should be no scope for evasion and fraud.
(iii) Double taxation should be avoided.
Principle of Administrative
Economy
(i) The cost of collection should be at the minimum level and the major portion of revenue should be made available for the other expenditure outlays of the Governments.
Principle of Accountability
(i) Each Government should be accountable to its own legislature for its financial decisions.

(i) Fiscal Policy is implemented through fiscal instruments also called 'fiscal tools' or fiscal levers - Government expenditure, taxation and borrowing are the instruments of fiscal policy.
Taxation:
(i) Taxes transfer income from the people to the Government.
(ii) Taxes are direct or indirect.
(iii) An increase in tax reduces disposable income.
(iv) So tax should be raised to control inflation.
(v) During depression, taxes are to be reduced.
Public Expenditure:
(i) Public expenditure raises wages and salaries of the employees and so aggregate demand for goods rises.
(ii) So, public expenditure is raised during recession and reduced during inflation.
Public debt:
(i) When Government borrows by floating a loan, there is transfer of funds from the public to the Government.
(ii) At the time of interest payment and repayment of public debt, funds are transferred from Government to public.