SAGE UNIVERSITY

PROJECT REPORT ON
IMPACT OF GST ON INDIAN ECONOMY
A Report Submitted to
SAGE University, Indore
towards partial fulfillment for the award of bachelor of commerce
degree with specialization in International accounting and finance.

Supervised by Submitted by
Dr. Mukesh Keshari Mohit Yadav(19COM3IAF008)
Shaikh Rehan(19COM3IAF016)
Dharmendra Solanki(19COM3IAF004)

INSTITUTE OF COMMERCE AND MANAGEMENT

1
 DECLARATION
We hereby declare that the work which is being presented in this project report
entitled “Impact Of GST On Indian Economy” in partial fulfillment for the
award of Bachelor Of Commerce degree is an authentic record of our own
work carried out under the supervision and guidance of Dr. Mukesh Keshari
(Head of department), SAGE University, Indore.
We are fully responsible for the matter embodied in this report and it has
not been submitted elsewhere for the award of any other degree.

Date Student Name

27/July/2021 Mohit Yadav
Shaikh Rehan
Dharmendra Solanki

2
 CERTIFICATE

This is to certify that the project work entitled “Impact Of GST On Indian
Economy” has been carried out jointly by Mohit Yadav, Shaikh Rehan and
Dharmendra Solanki, students of bachelor of commerce (IAF) IInd year, under our
supervision and guidance. They have submitted this project report towards partial
fulfillment for the award of the bachelor of commerce degree in International
accounting and finance by SAGE University, Indore during the academic year
2019-22.

Head Of Department Name Supervisor Name

Dr. Mukesh Keshari Dr. Mukesh Keshari

3
 ACKNOWLEDGEMENTS

First and foremost we would like to express our thankfulness towards Dr. Mukesh
Keshari, Head of department, Department of Commerce for extending all the
facilities needed to carry out this work, we take pride in saying that we have
successfully completed our project work under his able guidance. He was a major
support to us throughout projects, being available at odd hours with his ideas,
inspiration and encouragement. It is a through his masterful guidance that we have
been able to complete our project work.

We are also thankful to Dr. Mukesh Keshari for giving their guidance throughout
the project phase.

We are also thankful to Institute Of Commerce, SAGE University, Indore for

extending all the facilities needed to carry out this work.

Student Name
Mohit Yada
Shaikh Rehan
Dharmendra Solanki

4
 APPROVAL SHEET

The project entitled “Impact Of GST On Indian Economy” submitted by Mohit

Yadav, Shaikh Rehan and Dharmendra Solanki, approved as partial fulfillment
for the award of the bachelor of commerce (IAF) degree by SAGE University,
Indore.

Internal Examiner External Examiner

Date: Date:

5
 RECOMMENDATION

The project entitled “Impact Of GST On Indian Economy” submitted by Mohit

Yadav, Shaikh Rehan and Dharmendra Solanki is a satisfactory account of the
bona fide work done under our supervision is recommended towards partial
fulfillment for the award of the bachelor of commerce degree in International
accounting and finance by SAGE University, Indore during the academic year
2019-21

Date: 27/July/2021

HOD Name Supervisor Name

Dr. Mukesh Keshari Dr. Mukesh Keshari

6
 INDEX

SR. TOPIC PAGE

NO. NO.
1.1 ABSTRACT 9
1.2 INTRODUCTION 10
1.3 WHY GST ? 11
1.4 DEFINATION OF GST 12
1.5 OBJECTIVES OF GST 12
1.6 COMPONENTS OF GST 13
1.7 TAXES SUBSUMED UNDER GST 13
1.8 HISTORICAL BACKGROUND OF GST 14

2 PROBLEM IDENTIFICATION 15

3 RESEARCH METHODOLOGY 15

4.1 SCOPE OF THE STUDY 16

4.2 SIGNIFICANCE 16-17

5 IMPACT OF GST ON VARIOUS SECTOR 17

5.1 FAST MOVING CONSUMER GOODS 17
SECTOR
5.2 TRADERS 17
5.3 MANUFACTURES 17-18
5.4 E-COMMERCE 18
5.5 REAL STATE 18-19
5.6 BANKING 19
5.7 AUTOMOBILES 20
5.8 AGRICULTURE 20-21
5.9 PHARMACEUTICALS 21-22
5.10 ENERGY 22-24
5.11 TELECOM 24-25

7
5.12 TRANSPORT INDUSTRY 25
5.13 INDUSTRIAL FABRICS 25

6.1 ADVANTAGE OF GST 26-27

6.2 GST LIMITATIONS 27-28

7 CONCLUSION AND SUGGESTIONS 29

8 BIBILOGRAPHY 30

FIGURE

SR. TOPIC PAGE

NO. NO.
1.1 COMPONENTS OF GST 13
1.2 TAXES SUBSUMED UNDER GST 13
1.3 HISTORICAL BACKGROUND OF GST 14

8
1.1 ABSTRACT
Goods and service Tax (GST) was introduced in 2000. It took 17 years since then
that law changed. In 2017, Goods And Service Tax (GST) was transferred to Lok
Sabha and then to Rajya Sabha and on July 1, 2017, the Goods And Service Tax
(GST) law came into effect. It is an indirect tax that applies to allover India. One
tax will now be levied on all goods and services. France was the first country to
use the Goods And Services Tax (GST) in 1954. Since then, an estimated 160
countries have used this tax system in some way. (GST) will ensure a complete tax
base with minimal exemption, which will benefit the industry. (GST) will help the
economy grow more efficiently by accumulating taxes because it will break all tax
barriers between countries and unite the country with a single tax rate.
It will benefit the Indian economy in many ways: -
 Assistance in lowering consumer prices.
 The tax rate will be the same.
 Reduce excess taxes.
GST will affect many sectors positively or negatively. The GST, according to the
government, will boost India's GDP by about 2 percent.
Under GST, goods and services are taxed at the following rates, 0%, 5%, 12%,
18% and 28%.
After the implementation of GST certain prices will go down such as branded
goods, hotels, hair products, soap etc. The low price of the products will go up like
hard drinks, mobile bills, air tickets, the internet.
Property Taxes will be collected in three ways: the CGST: where the central
government will collect money, the SGST: where the national government revenue
will be imported into government, IGST: where the revenue will be collected by
the central government for international trade. This paper focuses on the benefits,
challenges and impact of GST on the Indian economy.

9
1.2 INTRODUCTION
The introduction of the Goods and Services Tax (GST) could be a significant step
forward in India's indirect tax reform. By combining a large amount of central and
state taxes into a single tax, it can reduce double taxation or taxation in a big way
and pave the way for the same national market. From a consumer perspective, the
biggest benefit would be to reduce the total tax burden on goods, currently
estimated at about 25% to 30%.
The introduction of Value Added Tax (VAT) at the Central and Government levels
is considered a major step forward in the world of indirect tax reforms in India. If
VAT is a significant improvement over existing national property taxes and the
State tax system, then the Goods and Services Tax (GST) will indeed be the most
important complementary next to the logical next to indirect tax transformation in
the country. Initially, it was anticipated that there would be a tax on goods and
services at the national level, however, with the release of the First Negotiation
Paper by the State Finance Minister's Committee on 10.11.2009, it has become
clear that there will be a Dual GST iya in India. And jobs. About 150 countries
have imported the GST in some way. While countries like Singapore and New
Zealand tax almost everything on the same level, Indonesia has five good rates,
zero rate and more than 30 exemption rates. In China, GST only operates in goods
and services in the provision of repair, replacement and operation. Under the GST
system, no distinction is made between goods and tax services. GST is a multi-
level tax where the heavy tax burden falls on the consumer of goods / services. It is
called value-added tax because in each category, tax is levied on value-added tax.
Under the GST system, a person who is responsible for paying taxes on his or her
output, whether for the provision of a service or for the sale of goods, is entitled to
receive a tax liability (ITC) tax paid on its imposition. The introduction of GST
could also make Indian products competitive in the domestic and international
markets. Studies show that this will have a significant impact on economic growth.
Last but not least, this tax, because of its transparent and independent nature, will
be easy to manage.

10
1.3 WHY GST ?
The previous indirect tax system is heavily taxed in many areas (during operations,
trading, service delivery etc.). This has led to inefficiencies and limitations. One of
the major limitations is the changing tax rate. Under the current regime, the
manufacturer's fees to charge the seller, the installment debt is not required by the
seller, and thus become part of the costs to the seller leading to the use of tax.
Second, the tax code is deducted. For example: - Under the current tax regime,
VAT is levied on the estimated value and excise tax.
I). Simpler tax structure:
As multiple property or service taxes are deducted and one tax is levied
location, tax structure is expected to be very simple and easy to understand and
manage.

II). Eliminates cascading effect of taxes:

One of the key features of the GST is the seamless access to the credit card
application process. This helps to eliminate the effect of cascading and the benefit
transmitted to the buyer.

III). Increased Revenue:

A simpler tax structure can bring about greater compliance, thus increasing the
number of tax payers and in turn tax revenues for the Government.

IV). Technology Driven System:

GST compliance will be transactional and in the same sense, in which case, the
external and internal supply will be matched to the total tax liability of the supplier
provided. Millions of vendors and billions of transactions need to be considered
and 'Technology' will play a key role in successful implementation and compliance
management.

11
1.4 DEFINITION OF GST:
GST is a value-added tax on goods and services in each category with a complete
and continuous series of profits from manufacturers / service providers that point
to the level of sellers where only the last buyer should bear the tax.
1.5 OBJECTIVES OF GST:
One of the main objectives of GST will be to eliminate the volatile impact of taxes
on the cost of manufacturing and distributing goods and services. Exclusion of the
effects of cascading i.e. taxation will significantly improve the competitiveness of
original goods and services leading to a positive impact on GDP growth.

Other GST objectives are provided below:

 One Country - One Tax
 Ensuring that the tax return will be eliminated.
 Improving the competitiveness of real goods and services, thereby
improving GDP levels.
 Ensuring the availability of inclusive credit throughout the value chain.
 Reduce barriers to tax administration and compliance.
 Creating integrated legislation To incorporate all tax bases, rules and
regulations
 The whole country.
 Reduce unhealthy competition between provinces due to taxation and
revenue.
 Reducing tax rates to avoid further issues.
 Tax Tax used for use instead of Manufacturing.
 Exclusive GST Registration, Payment and Input Credit.
 Subtract the Cascading effect of Indirect t axes in a single transaction.
 Use all indirect taxes at Institutional and national level under minimizing tax
evasion and corruption.
 Increase productivity.
 Increase Compliance.

12
1.6 Components of Goods And Services Tax (GST) :
GST is a dual concept tax concept. Under this system, taxes are regulated,
collected and distributed by both Institutions and Provinces depending on the
nature of the transaction (Internal State or internal). The GST tax components are:

FIG. 1.1 Credit- WWW.XATTAX.IN

1.7 TAXES SUBSUMED UNDER GST :

FIG. 1.2 Credit- WWW.TAXMANTRA.COM

13
1.8 Historical background of GST :

The GST was first recommended by the Kelkar Task Force on the implementation
of the Fiscal Reforms and Budget Management Act 2004 but the First Paper on
Property and Service Tax in India was introduced by the State Finance Ministers’
Empowerment Committee dt. 10 November 10, 2009In 2011, the Constitutional
Bill (115th Amendment) Bill, 2011 was introduced in Parliament to approve the
GST tax. However, the Bill expired with the dissolution of 15 Lok Sabha
Subsequently, in December 2014, the Constitutional Bill (Amendment 122), 2014
was introduced in Lok Sabha. The Bill was passed by Lok Sabha in May 2015 and
referred to the Rajya Sabha Select Committee for review. The GST is a method
that violates indirect tax reforms that will create a uniform national market by
eliminating trade barriers within the State. GST refunds many indirect taxes such
as tax, service tax, VAT, CST, luxury tax, entertainment tax, entry tax, etc. France
was the first country to implement the GST in 1954. Within 62 years, about 160
countries around the world have used the GST because the tax has the potential to
raise money in a very transparent and impartial manner.

GST rates in other countries ;

FIG.1.3 Credit- https://blog.saginfotech.com/

14
2.1 PROBLEM IDENTIFICATION

 Inquiring the impact of GST after its implementation.

 Find the difference between the current indirect tax and GST.

 Identify the benefits and challenges of GST after implementation

 Know the benefits of service delivery and service tax

 Identifying challenges / barriers to overcome through Goods and Services

Tax

3.1.RESEARCHMETHODOLOGY:

This study is aimed at identifying the impact of GST on the Indian economy.
Research explains naturally, according to a simple random method. Key
information was collected from respondents (Traders, the Public and experts) about
the vision of the current GST system and their expectations for the upcoming GST.
The second data was collected through Journals, Newspapers, Books, and Popular
Websites. This study presents suggestions and explanations taken from the analysis
of primary and secondary data.

Primary Data Collection

The key information required under the various chapters of the data analysis
collected through the research (questionnaire) process from the Public
Entrepreneurs General: Refers to ‘Merchants’. Including dealers, dealers and these
dealers deal with consumer goods, valuables and other goods.

15
4.1 SCOPE OF THE STUDY

Research has been done to evaluate the effectiveness of GST. It incorporates

the views of professionals, traders and the general public, consumers. It
produced good results for GST.
This study emphasizes the reason for the transition from VAT to GST. This
study was conducted with the help of various sections of the community for
example students, housewives, staff, self-employed, etc.

Features Of The GST :

 Conversion of taxes from production to consumption: This will lead to

a reduction in the revenue of production facilities. The central
government has promised to pay for this reduction in revenue.

 Elimination of Tax Reduction: as all taxes will be paid within the

GST, there will be a beno Cascading of tax. There will be a reduction
in operating costs in the end.

 Tax inclusion every time it is provided: This will improve tax

compliance. There will be a reduction in corruption and tax inspectors
etc.

 Window One indirect tax window: Almost all indirect taxes are
considered as exemptions such as custom tax etc. So far five numbers
have been proposed. Level of essential goods, 5% of daily cosmetics
such as soaps, shampoos, 12%, 18% and 28% of single items.

4.2 SIGNIFICANCE
GST is the most important tax revenue for the State, as the exempted goodies fall
under the taxable asset. It is expected to reduce the incidence of harassment and
corruption associated with trade and industry. This study contains various sections
of the community. With this study we tested public awareness about GST. This

16
study helps us to look at each impact, the economic impact, the combined impact
of the Indian economy
 Higher GDP: GDP is broadly covered in applied tax regulation and thus led
to higher GDP growth.
 Ratio High tax rate to GDP ratio: as tax compliance increases, taxes to GDP
ratio increase.
 Simplifying Doing Business: The complexity of the tax system reduces and
this helps to reduce business practices.
 Market General economic market: There will be no transport delays at the
country’s borders. This will contribute to the smooth running of the
business.
 In Low inflation: due to the abolition of Tax Transfer.

5. Impact of GST on Various Sectors :

5.1 Fast moving consumer goods sector:

The Indian FMCG sector is the fastest growing sector in the economy. The FMCG
sector is a major contributor to both direct and indirect taxes on the economy.
Consumption of goods and services tax will have a significant impact on the Indian
economy. The current tax rate in the FMCG sector is almost 22 to 25% and after
that the GST rate is expected to drop significantly which will lead to a reduction in
consumer goods prices.

5.2 Traders:
The tax effect on the seller or seller will be limited to adding value. Taxes paid on
previous installments (excluding SGST for other provinces) will be deducted as set
GST payment on the feed. Merchants can therefore choose to purchase / receive
items by invoice. Taxes paid as a percentage of the supply price will be lower
when compliance will work better than evasion. The cost of products and services
will decrease due to the cascading effect of reduced taxes. Traders in the GST
realm can focus on growing into larger organizations instead of staying small and
isolated.

17
5.3 Manufacturers:
India’s manufacturing sector is not only concerned about the problems arising from
declining exports and the use of infrastructure but also the burden of complying
with a complex indirect tax system. Many of the indirect tax laws have led to
significant cost and management costs, classification and measurement issues and
have hampered the ease of doing business in the sector.
5.4 E-Commerce :
Currently, the indirect tax structure with different tax regimes in different
provinces has led to confusion and uncertainty in the treatment of online market
tax and aggregators. The GST will help eliminate the current ambiguity in the
sector and prevent those employees from advertising laws and levies that are
explicitly imposed by the legal authorities. However, there may be significant
challenges to compliance with the e-commerce sector.

5.5 Real Estate :

 India’s real estate industry is estimated to account for about 5% of India’s
total production And is considered the second largest employer in the
country.
 The real estate sector is already subject to many taxes, the implementation of
GST is the same
 Psychologically it is expected to help buyers and builders.
 The GST state will be a real estate sector changer with 12% GST open
Construction projects designed for consumer marketing will improve the
industry.
 GST’s Ambit under real estate is likely to lead to more visibility, which will
significantly reduce tax evasion through more effective transaction tracking
methods and improve compliance and compliance. Since GST can be taxed
at one price, the current tax exemption (VAT on central property tax) may
be waived.
At present, developers pay a variety of non-borrowing taxes on items such as
property price, income tax, CST, entry tax etc. GST will replace most of these
taxes with a single tax and all developers will incur liability for the use of yare in

18
construction, thus ensuring a smooth credit chain chain that will reduce costs for
all players. Also, current tax laws provide a 75% reduction in service tax payable
for goods with less than one value, while properties with more than one allow only
70% reduction in service tax rates at a rate of 4.50%. In addition to the above, the
use of VAT and stamp duty is also available. However, the reduction will be lifted
and stamp duty will continue under the GST, increasing total tax liability.
Inexpensive homes will continue to be exempt from service tax under GST. The
highly taxed real estate sector adopts a single fixed rate of 12% GST, including
total land value and total tax liabilities. Therefore, the actual tax incomes under the
GST will be lower than most indirect taxes in the sector. Also, the GST rate of
employment contracts will be reimbursed for input credits thus providing a
seamless and flexible tax policy. The implementation of GST will further benefit
the real estate sector by ensuring uniform tax structure and improving tax
compliance by developers. It looks for greater transparency in the sector and can
reduce unreliable transactions. The GST will have a dynamic effect on domestic
consumers, as engineers with more marks in their hands will be able to restructure
the cost of products and favor consumers thus reducing property prices.

5.6 Banking :
Banks have always been a major pillar of the Indian economy and taxpayers have
literally banked them for financial needs. In India, most banking and financial
services are subject to service tax, at 15%. Under the new tax regime, GST’s rate
of transactions in financial services, such as banking, mutual funds, insurance and
stock betting has risen to 18% from 15% previously. Therefore, financial services
transactions are less expensive. GST applies to all services where considered
services are available. Therefore, for banking transactions such as credit card
payments, wallet transfers, ATM transactions, loan transactions, etc., where banks
charge a fee, increased taxes will apply. This can have a small impact on inflation.
Also, interest rates, securities trading, foreign exchange and trading services will
also fall under the GST. Therefore, it seems that placing GST in banks and
financial services will make financial services more expensive. However, interest
on random deposits, bank account deposits etc without cash will remain the same
under the new regime. Since GST is a destination-based tax, it can be a challenge
to find out where certain services are going (currently, services are taxed at the
service delivery point). This can lead to difficulties in determining the status of
GST, intermediate GST or inland GST in B2B and B2Ctransaction.
19
5.7 Automobiles :
Buyers of passenger cars in the premium category will be the main beneficiaries of
GST, which will reduce the workload in these models. Prices for small cars will
remain the same as there will be only a small increase in employment under the
GST.
Vehicles will be subject to a high tax rate of 28% and a rate of 1% to 15%. Small
cars will be charged 1% cash over 28% tax, medium cars will take 3% off and
luxury cars 15% cash over the top level.
Current tax on indirect taxes on cars varies from 30% to 45%. GST prices are in
line with industry expectations and almost all sectors of the industry have benefited
from a significant reduction in global tax burden. In addition, the abolition of the
volatile effect and the imposition of input taxes on all price categories will reduce
costs. In general, the impact of GST can be positive in the automotive sector. There
will be many key GST beneficiaries including some very large companies.
Industry experts predict that the GST will lead to a 8% reduction in traffic prices
for cars. Lower prices may be considered indirect incentives to increase prices. The
biggest beneficiaries will be Maruti Suzuki, M&M and Eicher Motors. However,
demand for cars for sale may be hit in the medium term. GST will apply local
taxes, reduce observation time and reduce inventory issues. With the growth of
shipping capacity, operators may not feel the need to increase mid-term. In
addition, the GST will also enable car dealers to receive a GST import tax payable
for car mating at the time of acquiring cars from OEMs. The same benefit will
promote them to partial / service businesses. Reducing the overall tax burden will
pave the way for revitalization and strengthening the car market in the country.

5.8 Agriculture :
20
The implementation of GST will boost economic growth through a broad tax base,
compliance with taxation and pressure on trade balance on the positive side. One
of the most important decisions taken at the GST council meeting was to adjust the
fair value of GST by zero percent to most major farm products. The central
government currently does not charge for the production / sale of farm produce or
agricultural income. Under GST again, there will be no VAT and depots should
also be issued within GST percent. Therefore, there will be no GST impact on the
agricultural community. However, the prices of fruit and vegetable drinks, jam,
sauces, purees, mixes, concentrates and bulk foods are set at 12 to 18%. Taxes.
Coins will be taxed at 5%. Under the new GST law, dairy farming, poultry farming
and livestock farming are kept out of the definition of agriculture. Therefore, this
will be taxable under GST. GST’s biggest impact on agriculture could bring
inflation as the 4% VAT has now been increased to 8% on many food items
including cereals and cereals as exemptions from VAT are limited to unprocessed
food. The biggest victims from inflation will be consumers living in poverty. Also,
tax incidents in the agricultural processing industry will also help to reduce the cost
of heavy machinery required for the production of agricultural goods. GST
implementation is essential to improve transparency, reliability, timeliness of
procurement. As most agricultural products rot naturally. Improved procurement
system as a result of GST will reduce the time taken by international shipping and
ensure less waste and the cost of farmers / traders. The GST system seeks to raise
more taxes and taxes and has freed real estate decisions and distributions from tax
considerations. Under the GST, supply chain management will be more costly and
time-consuming, thus reducing the waste of valuable food as well. In addition, with
the ease of obtaining tax credit under the GST regime, it is expected to improve
international trade leading to the achievement of the objectives of the National
Agricultural Market. Both CGST and SGST will be charged for the importation of
goods and services. Exports, however, will be measured at zero, which means that
retailers of goods and services do not have to pay GST for their exports. In terms
of its impact on the agricultural sector, it can be concluded that although the
general tax burden on consumers will be less in the new tax government, it will
certainly have a lower inflationary pressure on food items that have been
considered in particular. The implementation of the GST will be of great benefit to
farmers / distributors over time as there will be a single agricultural market of a
united country that will enable them to sell their produce at the highest prices
available.

21
5.9 Pharmaceuticals :
The Indian pharmaceutical industry is a leading provider of generic medicines
worldwide, with 80% of all antiretroviral drugs manufactured in India. The UN has
licensed six Indian medicine labs to make standard anti-AIDS drugs for all
developing nations. Indian pharmaceutical companies produce 20% of all generic
drugs used worldwide.
GST in India is likely to have a significant impact on a number of business areas
including the price of products and services, procurement, IT systems, accounting,
tax compliance framework work and talent regeneration. The pharmaceutical
industry had hoped that the GST ratio for life-saving drugs would be zero, as set at
5% and for all other types at 12%. Prices in the GST realm are slightly higher than
they are now. In the GST regime, essential drugs for the treatment of malaria, HIV-
AIDS, tuberculosis and diabetes fall to 5%. Almost all other drugs are in the 12%
net. Nicotine polacrilex gum is the only pharmaceutical product that will be
charged at 18%. Cipla, a brand that produces nicotine gums, will probably be
affected from a limit of 18%. In addition to the tax rate, a major concern for
companies is the disruption that will be brought about by the new tax era.
Medicines that are found to be more expensive as active ingredients, or raw
materials, will be taxed at 18%. Distributors and sellers of stock are outraged by
the potential losses due to rising interest rates. The effective tax rate on molding,
now 9%, has been increased to 12% and the seller’s limits have been set to tax.
Under current tax laws on pharmaceutical products, in many provinces VAT is still
the highest selling price, at one point. As a result, the distribution channel does not
pay VAT. Therefore, for them to pay taxes under GST plus three rebates per month
is a big task. Previously, anti-retroviral drugs or drugs were charged a median VAT
of 4% and a fee of 1.5% due to the profitability of free production facilities. Under
GST, ayurvedic drugs can be very expensive as they will be taxed at a rate of 12%.
No explanation has been given to the government on the issue of producers
operating in tax-exempt areas who pay higher taxes under GST. Many of these
manufacturers compete in the pharmaceutical industry for the benefit of the goods
as they are located in remote areas. The Pharma industry also GST directly
provides for the repayment of credit collected due to the high level of ideas
towards a reduced product level.

22
5.10 Energy :
The energy sector is at the forefront of economic growth but remains plagued by
policies and regulatory issues. Lack of indirect tax transfer contributes to
inefficiency in the sector. Unfortunately, this legacy crisis will continue under the
new GST regime, where electricity is produced and sold outside the GST but larger
goods and services used in the energy sector are brought into the GST net.
New GST level slabs for coal and capital investments are expected to bring
excitement to the energy sector. Coal, which is the least important raw material in
about 60% of the country’s energy production, is placed at less than 5% slab, while
large and medium-sized goods will be less than 18% slab.
Therefore, the 5% level of coal, which dropped from 11.7% in the current tax
regime is a major base as it will help reduce the final tax that will be passed on to
consumers.
At the same time, larger assets falling into the 18% tax slab will also help energy
project developers reduce their costs which is why energy bills will be reduced.
Currently, tax approvals and exemptions, both at the intermediate and public
levels, are available for certain goods and services used in the energy sector.
However, with the GST state generally set to limit these exemptions and approvals,
the effect on the energy sector can be seen.
Increased cost of energy projects
While the goods and services required to set up power projects will be subject to
GST, they will not be able to be charged by a productive organization that leads to
indirect taxation. Also, there is no indication as to whether the various offers /
exemptions available for setting up power projects will continue under the GST
regime.
In addition, the removal of the import permit limit on EPC contracts will not allow
project owners to adjust their acquisitions such as the sale of both countries to
reduce tax costs.
In the absence of such tax exemptions and concessions, there is a possibility of a
significant increase in project costs.
Impact on renewable energy

23
With a view to promoting clean energy, more taxes and exemptions have been
transferred to the renewable energy sector. As a result, green energy is often
available at reduced prices. However, there is no indication that such benefits will
be extended under the GST regime. It is necessary for the government to continue
to provide tax breaks in the renewable energy sector, in order to remain
competitive with the general fuel-based power system.
Therefore, a low tax rate of 5% on renewable energy plants will not lead to any
increase in renewable energy costs and the cost of energy projects in India. This
will eliminate GST events in the end stage, and enable providers to obtain a tax
refund for their installation costs.
In addition, energy is an integral part of any economy because energy is an
essential element of all commercial activities. Any tax distortion that the sector is
facing due to the fact that electricity is outside the GST, will have a negative
impact on the rest of the economy, disrupting some of the benefits required by the
introduction of the GST. Accordingly, it is understood that Government has missed
an opportunity by not including the generation and distribution of electricity and
other related services, under the GST umbrella.
Therefore, the performance of the energy sector, under the current GST regime,
may be subject to exemptions and tax exemptions that may be imposed to
withstand the impact of different tax regimes on the import and export side.
Exemption from renewal will require foreclosure to keep this small sector afloat.

5.11 Telecom :
From the traditional belief of being a telecommunications service provider to
providing a wide range of additional services, the telecom industry has become one
of India’s economic drivers.
Currently, the telecommunications industry is facing a number of shortcomings
such as tax inconsistencies, job segregation issues, and other impediments to the
growth of the sector.
One of the biggest concerns for telecom service providers is the rejection of cenvat
debt in telephone towers. However, under the GST regime, the telecom will be
allowed to receive such input tax debt to be used against the GST debt.

24
In order to achieve the desired goal of expanding the telecommunications business
and achieving social and economic development, it is important that the cost of the
telecommunications service is reduced, which will lead to lower prices and a wider
consumer base. In view of the overall objective, the proposed GST framework
appears to have solved the telecommunications sector issues.
The flow of seamless money under the GST regime will help to reduce all costs
and ultimately profits can be passed on to the end user by lowering prices. There
will be a fair increase in free income that can be used for business development
opportunities.
All service-related sectors are expected to perform poorly as the service tax rate is
currently 15% and the GST rate on television has been adjusted to 18%. Even a
modest increase in taxes can affect demand and profit. As the amount of data
moves slowly and with the introduction of Reliance Jio, the future of mobile
companies will be difficult and this will be reflected in their stock prices.
Also, most callers get a mid-level tax registration certificate and make a moderate
agreement. However, under the GST Act, separate registrations will be required in
each province from where the services are provided leading to increased
compliance requirements compared to the current state. Telecoms will still need to
negotiate with Government on unresolved issues under the GST such as double
taxation due to free service delivery, lack of tax transfer fees, lack of clarity about
telecom’s suitability for credit related infrastructure and so on.
The telecommunications industry is dynamic, price sensitive and has great
potential for growth. Strong policy support from government under the GST is
essential for all development.

5.12 Transport Industry:

GST in the transportation sector will lead to cross-country transport. It will reduce
travel costs, reduced travel times. Currently all 29 provinces of India collect taxes
on different amounts of goods that cross state borders which is why transport taxes
are collected more frequently. This will result in long delays at various rural
checkpoints for review by state officials who monitor the use of appropriate taxes
and other taxes. This causes an average delay of six to seven hours. The GST will
replace about 15 state taxes and levies on the sale of goods.

25
5.13 Industrial Fabrics:
It is expected that the tax rate in GST will be higher in the textile industry in terms
of current tax rates. Cotton and wool fiber currently exempt from tax will be
subject to tax in GST but the textile industry may benefit from GST as production
costs, may be reduced due to various excise taxes such as octroi, entry tax, luxury
tax etc. there have been a few challenges as well but GST will support the industry
over time.

6.1 ADVANTAGE OF GST:

Benefits of GST:

(A) Do it in India
 It will help build India’s united national market, give impetus to foreign
investment and – Conduct a campaign in India ;;
 It will prevent tax cuts as Input Tax Credit will be available on goods and
services at all stages of supply.
 Integration of laws, procedures and tax rates
 It will improve export and manufacturing activity, create more jobs and thus
increase GDP through profitable employment leading to greater economic
growth.
 Ultimately will help eradicate poverty by creating more jobs and financial
resources.
 Neutral More tax neutrality especially exports which makes our products
more competitive in the international market and encourages Indian exports.
 Improving the national investment climate that will benefit naturally from
thorn development.
 The same prices of SGST and IGST will reduce the motivation for escape by
eliminating the level of conflict between neighboring countries and that
between domestic and international trade.

26
  Medium tax rates in companies are likely to fall which is expected to lower
prices and lower prices mean higher consumption, which means more
production thus contributing to industrial growth. This will build India as a
manufacturing base.

(B) Freedom to Do Business

 Regime A simple tax regime with few conditions.
 Reduced tax duplication currently controlling our indirect tax system leading
to simplification and uniformity.
 Reduction of compliance costs – No record keeping of various types of tax –
so very little resource costs and record keeping capacity.
 Procedures Simplified and multidisciplinary processes such as registration,
refunds, refunds, tax payments, etc.
 All communications must be made through the standard GSTN portal – a
much lower public interface between the taxpayer and the tax
administration.
 It will improve the compliance environment as all refunds will be posted
online, input credits will be verified online, and promote a paper transaction
line.
 Procedures Standard taxpayer registration procedures, tax returns, uniform
tax returns, general tax base, general system of classification of goods and
services will provide maximum assurance in the tax system.
 lines Time to be provided for important functions such as obtaining
registration, refund, etc.
 Matching Electronic comparisons of tax credits input across India thus
making the process more transparent and accountable.

(C) Benefit to Consumers:

 Final price of goods is expected to be lower due to seamless flow of input
tax credit between the manufacturer, retailer and service supplier.

 It is expected that a relatively large segment of small retailers will be either

exempted from tax or will suffer very low tax rates under a compounding
scheme- purchases from such entities will cost less for the consumers.

27
  Average tax burden on companies is likely to come down which is expected
to reduce prices and lower prices mean more consumption.

6.2 GST Limitations:

 The natural weaknesses of the primary data source apply to this study only.
 Knowledge Insufficient information of respondents on GST policies,
procedures and procedures that may affect the general public's response.
 Samples and data collection are based on the willingness and responsiveness
of respondents.
 Process GST management process. it is an ongoing process and conclusions
and conclusions based on the information collected may not reflect the
future.
 GST in India will have a negative impact on the housing market. It can add
up to 8 percent to the cost of new homes and reduce demand by about 12
percent.
 The aviation industry will be affected. Service tax on aircraft other than GST
is six to nine percent. With GST, this rate will exceed fifteen percent and
will double the tax rate.
 The GST Act gives corporate governance authority to Central Government
and business entities that are bound by by-laws. This has created difficulties
for many entrepreneurs across the country.
 According to GST, the seller needs to register in all the countries in which
he does business and increase the difficulty of the seller. The government
should have made provision for a joint State GST registration as this would
have helped many retailers at the time of issuance.
 Government The government has chosen to introduce the mid-year GST and
this will lead to tax and reporting problems at the end of the financial year.
Ideally, the government should have introduced the GST at the end of the
financial year as this would have avoided much confusion during taxation
and reporting. GST has also contributed to discount and rewards programs.
The product was taxed at pre-discounted prices and the products were
previously taxed at discounted prices. Most companies have also suspended
prize programs due to the difficulty of GST.

28
7.1 CONCLUSION AND SUGGESTIONS

From what I have seen and my study of GST shows that the impact of GST on the
Indian economy has more positive than negative. From the point of view of each
manufacturer, due to India's GST product it was highly comparable in the market
which helps to face competition and gain more profits. From a consumer
perspective, GST has reduced over the entire property tax burden which is
currently estimated at 25% to 30%.
As GST is young in India so the public is facing some difficulty to understand the
new law. Business matters with a service provider to appoint business plan
specialists that will ultimately increase costs. The business needs to introduce new
software or software update according to the new system.
Gradually all of these problems are solved and become more widespread in the
future in adulthood. Gst will grow the Indian economy, as HSBS expects GDP
growth to 0.80% and NCAER expects GDP growth to 0.9% - 1.7%.
As people facing the problem in the first phase understand the new law and its
provisions and technologies. So my suggestion is that there are issues, there should
be various conferences and a lesson that should be done to make it universal. The
government introduces various strategies and technologies for registration and
renewal but while conducting research some people say that registration sites and
software do not work well. So the government should look at that and points to the
implementation and implementation of GST in India.

29
8.1Bibilography :

http://www.thehindubusinessline.com/todays-paper/tp-others/tp-taxation/
article2286103.ec

https://www.vatlive.com/vat-rates/international-vat-and-gst-rates/

http://www.gstseva.com/

http://www.ijsrm.in/v2-i2/2%20ijsrm.pdf

Books :

Goods And Services Tax in India ASSOCHAM GST law and practice – S.S.
GUPTA

GST in India – A comprehensive guide book by clear tax

30