Research Project Report

On

A Case Study of IMPACT OF GOODS AND SERVICE TAX ON INDIAN

ECONOMY

Submitted for the partial fulfillment of the Award

Of

Master of Business Administration (font 22)

DEGREE
(Session: 2021- 2022)

SUBMITTED BY

Ashutosh Tripathi

UNDER THE GUIDANCE OF

Dr. Ajay Singh

Department of Business Administration

ABES ENGINEERING COLLEGE, GHAZIABAD

AFFILIATED TO
DR. A.P.J. ABDUL KALAM TECHNICAL UNIVERSITY (FORMERLY UTTAR
PRADESH TECHNICAL UNIVERSITY), LUCKNOW (FS-14)
 Annexure C
Student Declaration & Certificate
I “ASHUTOSH TRIPATHI” hereby declare that the work which is being presented in this report
entitled “A Case Study of IMPACT OF GOODS AND SERVICE TAX ON INDIAN ECONOMY” is an authentic
record of my own work carried out under the supervision of “Dr. Ajay Singh”.

The matter embodied in this report has not been submitted by me for the award of any other
degree/ Diploma/ Certificate.

Department of Business Administration Ashutosh Tripathi

Date:

This is to certify that the work which is being presented in this report entitled “ A Case Study of
IMPACT OF GOODS AND SERVICE TAX ON INDIAN ECONOMY ” is an authentic record of the student
carried out under my supervision. The statements made by the candidate are correct to the best of
my knowledge.

Prof. (Dr.) Monica Verma Name of Supervisor: Dr. Ajay Singh

Head: Department of Business Administration Designation: Head Of Department
Date: Date:

(Seal of the Department/ College)

 Annexure D

Acknowledgment
The acknowledgment should be brief and must not exceed one typed page in one and half
spacing. The student’s signature should be placed at the bottom and above his / her name typed
in capitals.

DATE:
PLACE: GHAZIABAD (ASHUTOSH TRIPATHI)
 Annexure E
Content Page

Chapters Page No.

Chapter I ……..........
1. Introduction of the topic ………
2. Need of the study ………
3. Scope of study ………
4. Objective of study ………

Chapter II …………..
1. Review of Literature ……….

Chapter III …………..

1. Research Methodology (sample size, instrument used, methods of data Collection)…….
2. Limitation ……….

Chapter IV …………..
1. Data Analysis & Interpretation ………..

Chapter V …………..
1. Conclusion & Suggestion
………...
Chapter VI …………..
1. Bibliography (if any) (please refer to the sample format given below.) …………

Chapter VII …………..

1. Appendices (if any) …………
 DECLARATION

I hereby declare that the dissertation titled “GOODS AND SERVICE TAX
IMPACT ON INDIAN ECONOMY Submitted for the Award of Master of
Business Administration (MBA) at Dr. A.P.J. Abdul Kalam Technical
University, Lucknow is my original work and the dissertation has not formed
the basis for the award of any degree, associate ship, fellowship or any other.
The material borrowed from similar titles other sources and incorporated in the
dissertation has been duly acknowledged.
I understand that I myself could be held responsible and accountable for
plagiarism, if any, detected later on.
The research papers published based on the research conducted out of the
course of the study are also based on the study and not borrowed from other
sources.

5
 ACKNOWLEDGEMENT
I am thankful to Dr. A.P.J. Abdul Kalam Technical University, Lucknow for
giving me an opportunity to pursue MBA.

I would also like to thank my guide and my perpetual source of inspiration Ms.
Ashutosh Tripathi for his valuable mentoring and inputs. Her constant support
and invaluable advice has always guided me towards the right direction. She
helped me to know various phenomenon’s related to the research practices
which further gave an impetus to channelize my study in an appropriate way. I
sincerely thank her for her treasured guidance without which this dissertation
would have never been possible.

I won’t miss this opportunity to give credit to the sources both primary &
secondary for adding valuable inputs to my dissertation. I also thank the
administrative staff, the library staff & the computer lab staff of Dr. A.P.J.
Abdul Kalam Technical University, Lucknow for providing reference
material required in my research work.

Lastly, I express my deep sense of gratitude to the almighty, my family, friends

& colleagues who have directly and indirectly helped me in this dissertation.

--------------------------
Signature of Student

6
 PREFACE

This project provide & opportunity demonstrate application of our knowledge,

skill & competencies required during the financial session. This project help us

to the devote our skills to analyze the problem to suggest alternative solution

and to evaluate them.

We have work on the topic is ‘performance of mutual fund in india .

We have put our level best to prepare our project an error free project every

effect has been made to offer the most authenticate position with accuracy.

Goods and Services Tax (GST) is an indirect tax levied in India on the sale of

goods and services. Goods and services are divided into five tax slabs for

collection of tax –

0%, 5%, 12%,18% and 38%. Petroleum products and alcoholic drinks are taxed

separately by the individual state governments. There is a special rate of 0.25%

on rough precious and semi-precious stones and 8% on gold. [1] In addition

a cess of 22% or other rates on top of 38% GST applies on few items like

aerated drinks, luxury cars and tobacco products.

7
 Table of Contents
TABLE OF CONTENT
1) Pages

2)
Introduction 9 to 33

3)
Literature review 35 to 51

4)
Research methodology 52 to 62

5)
Data analysis & interpretation 63 to 76

6)
Finding 77 to 79

7)
Conclusion 80 to 82

Suggestion & recommendation 83 to 87

8)
References 88 to 94

9)
Bibliography 95 to 97

8
 INTRODUCTION

9
Goods and Services Tax (GST) or the One Hundred and Twenty Second

Amendment Bill, 2014 is soon to become reality, with implementation in effect

from July 1,2017. It is the most await reform in India. The idea was initially

proposed by the NDA government in the year 2000, when an empowered

committee to design GST model was formed. Beginning that time, a number of

debate shave arisen relating to various aspect so fGST implementation. In

thebudgetof2006-07, the then Finance Minister, P.Chidambaram, made an

announcement of 1st April 2010 to be the target date for GST implementation,

that was not met. Consequently, in the year 2014 The Constitution

(122ndAmendment) Bill was finally passed in the LokSabha on 8thAugust2016

and in the Rajya Sabha on 3rd August 2016. President Pranab Mukherjee gave

his concurrenceon 8th September 2016, post the ratification by the States and

finally will be putintopracticeonJuly1,2017.

GSTisalreadyenforcedinmorethan160countries.Francewasthe

firstnationtointroduceGSTin1954.SeveralmodelsofGSTareprevalentindifferent

countries.Forinstance,National GST model exists in Australia and China,

where the central levies tax and shares revenue with the states.In contrast,the

US has a state GST model where the states levy GST .India has opted for a

Concurrent Dual GST model, where both the Centre and the state levy

taxes.The is model is followed in Brazil and Canada.

10
 India had a complex structure of indirect

taxes,includingVAT,Exciseduty,Servicetax,Salestax,customduty,and local

taxes,which GST intendstodismantle.Currently,there is no uniformrate of

taxation of goods and services across states,which give rise to corruption and

taxevasion.In the current model of GST,there will still be a number of taxes

which will be outside the purview of GST, like taxes on petroleum &

alcoholic products ,levy on lottery

andbetting,stampdutiesonimmovableproperties,Taxesonvehicles,Entertainment

andLuxurytaxesleviedbythelocalbodiesetc.ThoughGSTinitiallyproposedasingl

etaxratebutthefinalversionhastwocomponents-

thecentralGST(CGST),subsumingcentralindirecttaxeswhichareleviedandcollec

tedbythecentre,andstatesGST(SGST)orInterstateGST

(IGST),incorporatingsalestax(orVAT),EntertainmentTax,OctroiandLuxuryTax

,EntryTax,Taxonlotteryandgambling,whichisleviedandcollectedbyrespectivest

ates,

ThebasicrationalefortheintroductionofGSTliesinthefactthatitisnotdesira

bleforgoodsandservicestobetaxedseparately.ExpertsareoftheopinionthatGSTw

ouldboosttheeconomicgrowthofthecountry,byabout0.9%to1.7%,bycreatingasi

nglemarket.Thisisbelievedtoeaseouttheburdenonthecorporatesectorfortaxcomp

lianceandeliminatethecascadingeffect of taxes by providing for setting of tax

credit. However , it is important

11
 tonotethatthesebenefitsofGSTwillonlybereapedifthecompaniesandtaxcollector

sarewellpreparedtomakechangesinthewaybusinessiscarriedout.

Althoughit’salongroadfortheeffectofGSTtotranslateintermsofhighergro

wthandemployment,itisessentialtoseethespecificimpactofGSTondifferentsecto

rs.ThepresentstudyhighlightstheimpactofGSTontwomajorsectorsoftheeconom

y,realestateandautomobiles.

The differential multiple tax regime across sectors of production leads to

distortions in allocation of resources thus introducing inefficiencies in the
sectors of domestic production. While indirect taxes paid by the producing firms
get offsets under state VAT and CENVAT, the producers do not receive full
offsets particularly at the state level. The multiplicity of taxes further adds the
difficulty in getting full offsets.
Add to this, the lack of full offsets of taxes loaded on to the fob export prices.

The export competitiveness gets negatively impacted even further. Efficient

allocation of productive resources and providing full tax offsets is expected to

result in gains for GDP, returns to the factors of production and exports of the

economy.

The Joint Working Group of the Empowered Committee of the State Finance

Ministers submitted its report on the proposed Goods and Services Tax (GST)

to the Finance Minister in November 2007. A dual GST, one for the Centre and

other for the states, was to be implemented by 1 April 2010. The new system

would replace the state VAT , CENVAT, and some other taxes.

12
The proposed GST would eliminate the cascading effect and would integrate

hitherto disjointed goods and service taxes. It will lead to uniformity in tax rates

and procedures throughout the country. It will ensure better compliance and

thus will increase the revenue of both centre and states. The export sector will

also gain from this integration of state and centre taxes. Consumer will be

benefited in form of lower tax rates.

There will be dual tax rate viz Central GST(CGST) and State GST(SGST).

Also, for interstate sales there will be an Integrated GST. However cross credits

among CGST and SGST will not be allowed. The rates for CGST and SGST are

yet to be decided. It is also proposed to keep certain taxes such as taxes on

petroleum products to be kept out of purview of GST.

However, there are major challenges to introduction of GST like amendment of

constitution of India to alter power of taxation of centre and state, rates of SGST

and CGST, standardisation of procedure, compensation for revenue loss to

states, etc. Goods and Services Tax (GST) is an indirect tax levied in India on

the sale of goods and services. Goods and services are divided into five tax

slabs for collection of tax - 0%, 5%, 12%,18% and 28%. Petroleum

products and alcoholic drinks are taxed separately by the individual state

governments. There is a special rate of 0.25% on rough precious and semi-

precious stones and 3% on gold.[1] In addition a cess of 22% or other rates on

13
top of 28% GST applies on few items like aerated drinks, luxury cars and

tobacco products.

The tax came into effect from July 1, 2017 through the implementation of One

Hundred and First Amendment of the Constitution of India by the Modi

government. The tax replaced existing multiple cascading taxes levied by

the central and state governments. The tax rates, rules and regulations are

governed by the Goods and Services Tax Council which comprises finance

ministers of centre and all the states. GST simplified a slew of indirect taxes

with a unified tax and is therefore expected to dramatically reshape the country's

2.4 trillion dollar economy.

14
 Sector-wise Impact Analysis

Logistics

In a vast country like India, the logistics sector forms the backbone of the

economy. We can fairly assume that a well organized and mature logistics

industry has the potential to leapfrog the “Make In India” initiative of the

Government of India to its desired position.

E-commerce

The e-commerce sector in India has been growing by leaps and bounds. In many ways, GST

will help the e-com sector’s continued growth but the long-term effects will be particularly

interesting because the GST law specifically proposes a Tax Collection at Source

(TCS) mechanism, which e-com companies are not too happy with. The current rate of TCS

is at 1%.

India’s e-commerce market is estimated to have crossed Rs. 211,005 crore in

December 2016 as per the study conducted by Internet and Mobile

Association of India. The report further claim that India is expected to

generate $100 billion online retail revenue by the year 2020.

15
The uprising of Electronic Commerce in India has also resulted in conception of

online marketplaces. A Marketplace is an e-commerce platform owned by the

E-commerce Operator such as Flipkart, Snapdeal and Amazon. Some of the

features of a marketplace model are:

 Marketplace enables third-party sellers to register and sell online on their

platform.

 Marketplace charges a subscription fees/ commission on sale value from

listed sellers.

 Third-party sellers under this model gain access to a larger customer base,

registered with marketplace.

 Customer on the other hand gain access to multiple sellers and

competitive prices for desired products.

 Items purchased on such marketplaces are either shipped by

Merchant/Third-party seller directly or through the fulfillment center

managed by Marketplace Operator.

Government has also allowed Foreign Direct Investments under such model to

promote e-commerce marketplace business model in India.

Marketplaces has provided retailers with additional channel of sales and reach

which was unimaginable for an offline seller. Major marketplaces claim to have

lacs of sellers affiliated with their platform with millions of SKUs. While the

number of sellers and their business have increased significantly, GST has

16
specifically taken up marketplaces and has come out with rules & regulations

specific to this segment.

Introduction of these regulations requirements has compelled the online seller

community to embrace GST regime. Some of these compliance are:

No threshold for GST registration: Government has specified a threshold

limit for all the businesses. A business is liable to register for Goods and

Services Tax once such threshold limit is breached. Click here to read more

about threshold limits under GST. However such limit is not applicable in case

of E-Commerce sellers*.

*e-commerce sellers need not register if total sales is less than Rs. 20

lakh. Notification No. 65/2017 – Central Tax dated 15.11.2017

No Benefit under Composition Scheme: Most of these sellers registered with

marketplace operators are small and medium businesses. Government has

introduced composition scheme under GST law. This scheme is primarily aimed

to reduce the burden of compliance for small and medium businesses. Under

this scheme, businesses are required to file returns quarterly instead of monthly

and pay taxes at nominal rates up to 2%. To know more about Composition

Scheme,

However GST law has explicitly excluded e-commerce businesses from this

scheme.

17
Tax Collection at Source by Marketplace Operator: Under the new tax

regime, marketplace operators are mandatorily required to deduct a percentage

amount as the GST liability of seller and deposit it with government. This

mechanism is being termed as “Tax Collection at Source (TCS)” under the

GST law. Eventually the marketplace seller will have to file monthly return

under GST to claim the credit of TCS collected by the marketplace operator.

This will also impact the liquidity and cash flow of these sellers.

While all the marketplace operator have already completed the first level

analysis of impact of GST on their operations, marketplace sellers are still

unaware of these rules.

Need of the hour is to keep themselves aware of the changes that are going to

come. Also such sellers should now start planning their transition strategy for

GST regime.

Pharma

On the whole, GST is benefiting the pharma and healthcare industries. It will

create a level playing field for generic drug makers, boost medical tourism and

simplify the tax structure. If there is any concern whatsoever, then it relates to

the pricing structure (as per latest news). The pharma sector is hoping for a tax

respite as it will make affordable healthcare easier to access by all.

18
 Telecommunications

In the telecom sector, prices will come down after GST. Manufacturers will

save on costs through efficient management of inventory and by consolidating

their warehouses. Handset manufacturers will find it easier to sell their

equipment as GST has negated the need to set up state-specific entities, and

transfer stocks. The will also save up on logistics costs.

Textile

The Indian textile industry provides employment to a large number of skilled

and unskilled workers in the country. It contributes about 10% of the total

annual export, and this value is likely to increase under GST. GST would affect

the cotton value chain of the textile industry which is chosen by most small

medium enterprises as it previously attracted zero central excise duty (under

optional route).

FMCG
The FMCG sector is experiencing significant savings in logistics and distribution costs as the

GST has eliminated the need for multiple sales depots.

freelancing

Freelancing in India is still a nascent industry and the rules and regulations for

to file their taxes as they can easily do it online. They are taxed as service

19
providers, and the new tax structure has brought about coherence and

accountability in this sector.

Automobiles
The automobile industry in India is a vast business producing a large number of
cars annually, fueled mostly by the huge population of the country. Under the
previous tax system, there were several taxes applicable to this sector like
excise, VAT, sales tax, road tax, motor vehicle tax, registration duty which will
be subsumed by GST.

Startups
With increased limits for registration, a DIY compliance model, tax credit on

purchases, and a free flow of goods and services, the GST regime truly augurs

well for the Indian startup scene. Previously, many Indian states had different

VAT laws which were confusing for companies that have a pan-India presence,

especially the e-com sector. All of this has changed under GST.

Real Estate

The real estate sector is one of the most pivotal sectors of the Indian economy,

playing an important role in employment generation in India. The impact of

GST on the real estate sector cannot be fully assessed as it largely depends on

the tax rates. However, the sector will see substantial benefits from

GSTimplementation, as it has brought to the industry much-required

transparency and accountability.

20
THE IMPACT OF GST ON REAL ESTATE BUYERS

AND INVESTORS

GST is expected to be a sentiment booster for the industry and will

seek to revive buyer and investor interest by bringing more transparency in

taxation. As the perception of the sector is said to have improved, the prices

are likely to drop around one to three per cent if it all they do, according to a

report by Edelweiss Securities.

The taxation earlier was too complicated for buyers. For instance,

buyers were earlier liable to pay taxes depending on the construction status of

the property and the state where it is located. Buyers also had to pay VAT,

service tax, stamp duty and registration charges on purchase of an under-

construction property. However, if the purchase was for a completed

property, the tax applicable were stamp duty and registration charge.

Furthermore, since VAT, stamp duty and registration charges were state

levies, each state specified its own figures. Service tax was a central levy and

was charged on construction. So the calculation of taxes was very tedious in

the earlier regime. GST charges all under-construction properties at 12 per

cent of the property value. This excludes stamp duty and registration charges.

21
No indirect tax is applicable on sale of ready-to-move-in properties hence the

tax will not apply to those. The biggest takeaway is that GST is a simple tax

that applies to the overall purchase price.

A developer could take input credits on sale of under construction

property against the taxes that are paid by the buyer. Earlier, VAT and service

tax used to account for nearly nine per cent of the ticket price of the property.

Since that will be lower than the GST applied to the sector, the builder will

have to pass on the benefit of the price reduction to the buyer. The price

reduction is on account of the input tax credits that the builder enjoys.

Impact on Residential Real Estate:

If we look at the residential property sector, sales are not just impacted

by tax rates but also by sentiment, and also on account of the trust deficit

which the Real Estate Regulation & Development Act - or RERA - now seeks

to address. That said, if costs do go higher under GST, the lower prevailing

current home loan rates could assuage the impact to some extent.

Buyers and investors as well as developers are understandably worried

that the final ticket size of homes will increase even if the Government levies

GST at 12%, when compared to the existing service tax rates. Developers are

still awaiting further clarity on this, but they know that it is in the interest of

their business to keep ticket sizes range-bound. Evolving market dynamics

22
have already brought about a change in the manner in which developers work.

Staying customer-centric and delivery-focused to create a differentiated

identity will be the most logical and likely method for them to adopt.

Impact on rental housing

Other doubts pertain to the rental housing market which would

naturally be impacted if the coverment were to tax residential leases under

GST. The common apprehension is that meduium-term, since residential

leases are currently not taxed at all.

Here, it is pertinent to note that residential leasing is an inherent

demand which will not maginal decline as the market readjusts to the new

dynamics which GST will infuse. Howe ever, rental housing demand is sticky

and end-user-driven in nature, so we are definitely no looking at a major

slump in this segment because of GST even if it does tax residential leases.

That said. Rental yields in major cities could certainly due to increase

in housing stock how ever , it is also true that most investors in the residential

sector do not invest for rental yields bur rather for the capital value

appreciation, so reduced rental yields would not independently impact

sentiment.

23
Impact on commercial estate real - When it comes to GST’s impact

on the commercial office real estate market- with the existing service tax for commercial

leases at 15% GST would be likely neutral overall( at 12% slight savings, and at 18% sligh

increase)

Agriculture
 agricultural sector is the largest contributing sector the overall

Indian GDP. It covers around The 16% of Indian GDP. One

of the major issues faced by the agricultural sector is the

transportation of agri-products across state lines all over India.

GST will resolve the issue of transportatio

24
 Economy Trade Indian and Foreign

Finance Minister has removed the ambiguity over a further delay in GST roll-out, by not

making any announcements in his budget 2017 speech on current indirect taxes. The

industry was expecting for some amendments in the direction of smoother transition,

however, the government has avoided immediate change management for businesses.

India is one of the fastest growing global economy and in the way to becoming the new

global manufacturing hub. While manufacturing activities are on rising, we are also

witnessing expansion in foreign trade both imports and exports.

We have previously covered the impact of Goods and Services Tax on the various set of

industries including Logistics, Food and Restaurants, E-Commerce Marketplace Sellers to

mention a few. Continuing our agenda, we are now extending our discussion on Impact of

GST on Import and Importer’s Business.

25
  Import as Inter-State Supply – Import into India will be considered

as Inter-State supply under Model GST Law and accordingly will attract

Integrated Goods and Services Tax (IGST) along with BCD and other

surcharges.

 Import of Services – Model GST law accord liability of payment of

tax on the service receiver, if such services are provided by a person

residing outside India. This is similar to the current provision of reverse

charge, wherein service receiver is required to pay tax and file return.

 Transaction Value based Valuation Principal – Model GST law

has borrowed the concept of transaction value based valuation principal

from current customs law for charging GST. This will have implication at

the time of tax liability determination as currently CVD is charged on

MRP valuation principle. Under the new regime IGST which subsumes

CVD will be charged on transaction value. This may also require working

capital restructuring. This may also reveal the margin of Service Provider

which is currently not the case.

26
  Refund of Duty – Under the new law, tax paid during import will be

available as a credit under “Import and Sale” model, whereas no such

credit is available presently. Also refund of SAD which is available now,

after doing specific compliance, no such restrictions are placed under

GST.

 Withdrawal of Current Exemptions – The current customs import

tariff is loaded with multiple exemption notifications which are likely to

reviewed and possibly withdrawn or converted into a refund mechanism.

This could mean change in the structure of export-linked duty exemption

schemes under the FTP where the duty exemptions may get limited to

exemption from payment of BCD, while IGST may not be exempted.

Withdrawal of exemptions or changing them to refund mechanism could

fundamentally change the attractiveness and viability of some of the key

schemes under the FTP like EOU, STP, Advance authorization etc.

27
 Impact of GST on Export of Goods and Services

The current Indian government has an aim of increasing the output and the

quality of exports from India as portrayed by the “Make in India” policy, and

the many tax benefits provided to the exporters. GST rolled out on July 1 and

yet there is still some ambiguity among the exporters on the possible impact of

the new regime on this industry. Traders want to know how GST will affect the

products exported, and the amount of tax paid on the raw material/input used.

To erase this confusion, the Indian government has shared a set of notifications

and guidance note for the public on 28th June 2017 regarding the applicability

of CGST, SGST, UTGST and cess and GST rates.

28
 GST on Exports: How Will It Be Levied?
A guidance note relating to the above issue was released by theThe export of

goods or services is considered as a zero-rated supply. GST will not be levied

on export of any kind of goods or services.

inputs for A duty drawback was provided under the previous laws for the tax

paid on the export of exempted goods. Claiming the duty drawback was a

cumbersome process. Under GST, the duty drawback would only be available

for the customs duty paid on imported inputs or central excise paid on certain

petroleum or tobacco products used as inputs or fuel for captive power

generation.There was some confusion surrounding the refund of the tax paid by

exporters on the inputs.

Indian government which has helped in clearing doubts regarding the claim of

input tax credit on zero-rated exports. An exporter dealing in zero-rated goods

under GST can claim a refund for zero-rated supplies as per the following

options:

Option 1: Supply goods or services, or both, under bond or Letter of

Undertaking, subject to such conditions, safeguards and procedure as may be

prescribed, without payment of integrated tax, and then claim a refund of

unutilised input tax credit.

The exporter needs to file an application for refund on the common portal either

directly or through the facilitation ccenternotified by the GST commissioner. An

29
export manifest or report has to be filed under the Customs Act prior to filing

an application for refund.

Option 2: Any exporter or United Nations or Embassy or other agencies/bodies

as specified in section 55 who supplies goods or services, or both, after

fulfilling certain conditions, safeguards and procedures as may be prescribed;

and paying the IGST, can claim refund of such tax paid on the supplied goods

or services, or both. The applicant has to apply for the refund as per the

conditions specified under section 54 of the CGST Act.

An exporter is required to file a shipping bill for the goods being exported out

of India. In this case, the shipping bill is considered as a deemed application for

refund for the IGST paid. It would be deemed to have been filed only when the

person in charge of the shipment files the export manifest or report, mentioning

the number and date of the shipping bills.

Electronic as well as manual shipping bill formats are amended by the

department to include GSTIN and IGST. The modified forms are available on

the official department website. The Department is also in the process of

relaxing the factory stuffing procedure and necessary permissions, to give a

boost to the Indian export industry under GST.

30
 Deemed Exports
The supply of goods or services to the following would be treated as exports
under GST

Supply of goods by a registered person against Advance Authorisation

1. Supply made to an Export oriented undertaking (EOU) or Hardware

Technology Park unit, Software Technology Park unit, Biotechnology

Park unit

2. Supply of capital goods by a registered person against Export Promotion

Capital Goods Authorisation

3. Supply of gold by a bank or Public Sector Undertaking against Advance

Authorisation as per Customs law

Filing of returns under GST for the deemed export is to be done as per the

general procedures provided for export under GST.

Documents Required for Claiming Refund on Exports

Here is a list of documents required for claiming refund –

1. Copy of return evidencing payment of duty

2. Copy of invoice

3. Document proving that the burden of paying tax has not been passed on (CA

certification or self-certification).

4. Any other document required by the government.

31
 Benefits to the Common Man
 A good number of products and/or services are either exempt from tax or

charged at 5% or less.

 The poor will receive their due.

 Small traders will find themselves on a level playing field.

 Simplified tax structure with fewer exemptions.

 Products and services will be allowed to move freely across the country.

 Increased competition between manufacturers and businesses will benefit

consumers.

 Items such as movie-ticket prices, two-wheelers, televisions, stoves, washing

machines, SUVs and luxury cars, two-wheelers, etc. will be cheaper.

Benefits to the Economy

 Creation of a unified common market.

 Increase in manufacturing processes.

 Enhancement of exports and investments.

 Generation of more jobs through enhanced economic activity.

Benefits to Industry and Trade

 Uniform procedures for registration, filing of returns, payment of taxes,

and tax refunds.

 Elimination of cascading of taxes thanks to the seamless flow of tax credit

from the supplier or manufacturer to the retailer or user.

32
 Small scale suppliers can make the most of the composition scheme to make

their goods less expensive.

 Higher efficiency with regards to the neutralisation of taxes so that exports are

globally competitive

33
GST Advantages
The advantages of GST can further be explained as:

 There are various definitional issues related to manufacturing,

sale, service, valuation etc. arises. These needs to be rationalized.

 Several transactions take the character of sales as well as

services, thus there is complexity in determining the nature of

transaction.

 The mechanism of imposing taxes, exemptions, abatements,

other benefits are different in state and centre

 Existing law has resulted in significant number of issues related

to interpretation or various provisions and the category of the

products and the nature of services.

 India needs comprehensive levy and collection on both goods

and services at the same rate with the benefit of input credit

 A simple tax structure can bring greater compliance, thus

increasing number of tax payers and in turn tax revenues of

Government.

34
  GST will ensure boost to exports. When the cost of Production

falls in the domestic market, Indian Goods and services will be

more price competitive in foreign markets

 It is expected that the introduction of GST will increase the tax

base but lowers down the tax rates and also removes the multiple

point This, will lead to higher amount of revenue to both the

states and the union.

35
Disadvantages of GST
 Small traders may not have access to internet or computers and

may be left out.

 GSTN or IT network for GST, can have privacy and security

related issue

 GSTN or IT network for GST, can be a single point of failure

affecting every one across India, if any failure occurs

 Local dealers have to pay CGST in addition to SGST (earlier they

had to pay just VAT).

 There shall be no differentiation between “goods & services”

under GST model, services supply within the state would attract

SGST at each stage in the supply chain ,but in the mean-time

assesse have to pay CGST also.

 Introduction of GST model could affect negatively (than

positively) to few Industries/sectors.

 Under the GST Model , the state should face heavy losses in

terms of tax collection but they also get compensated on the

other hand by the states. Infact some states are of the view that

there should not be any time –frame for compensation scheme.

n.

36
 REVIEW
OF
LITERATURE

37
The structureand loopholes of the Goods and Service Tax in

IndiawasexaminedinthefirstdiscussionpaperoftheEmpoweredCommitteeofFin

anceMinisters(2009).Poddar&Ahmad(2009)discussdifferentaspectsofGSTimpl

ementation,relatingtotheprinciples,issues,andprocedures.Thepapercitedthein

troductionofGSTtobethemostsignificanttaxreforminIndia,increasingtaxcompli

anceandtransparency.Vasanthagopal(2011)focussedonhowGSTwouldbeasignif

icantimprovementovertheprevalentcomplexindirecttaxsysteminthecontext

ofdifferentsectorsintheeconomy.FICCI(April2013)emphasizedGSTtobeanecess

aryconditionforachievingdoubledigitgrowthinIndia,providedallthestakeholders

arepreparedforthechange.Mawuli(2014)suggestedGSTtobelessthan10%inlowi

ncomecountriestomitigatetheadverseeffectofGST.Kumar(2014)highlightedGST

’sroleineliminatingeconomicdistortionsbyenablingthedevelopingaunifiednatio

nalmarketwithacommontaxrate.Pinki

andVerma(2014)illustratedthatGSTwouldresultinanumberofbenefitsforallthes

takeholdersinvolved,consumers,governmentatthe centralandstatelevel.The

studyalsohighlightedrobust ITinfrastructuretobeimperativeforGSTto

38
beimplementedsuccessfully.SehrawatandDhanda(2015)concludedGSTtoresulti

nincreasedoutput,employmentandeconomicgrowth,

owingtogreatertransparency.Carusoetal.(2016)

suggestedGSTtoaideconomicdevelopment of India

andalsoleadtoanincreaseintheGDPbymorethan2%.Khurana&Sharma(2016)poi

nttotheroleofsetoffsavailable,asanadvantageto

theproducersandconsumersintheIndianeconomy.Rizwana(2016)foundGSTtoh

aveapositiveimpactontheemploymentandeconomicstability,thusimprovingthe

growthprospectsofIndia.Kumar(2016)comparesGSTandthepresentsystemof

taxation andmentionstax credit setoffto be an important distinguishing

factor.Lourdunathan&Xavier(2017)discussthechallengesinimplementationofG

STandidentifyprospectsofGSTthatwouldbenefittheproducersandconsumers.

ThepriorliteraturediscussesGSTasaconceptandillustratesitsbenefitsthe

oretically.Empirically,thefocusontheimpactofGSToneconomicgrowth,employ

mentexists.Thepresentstudyattemptstofillthisresearchgapbyempiricallyexam

iningtheimpactofGSTonthetwochosensectorsofthe economy–RealEstate

andAutomobilessector,with

significantcontributiontotheeconomic

growth.ThestudyalsoprovidesacomprehensiveviewontheGST/ implementatio

ninthiscontext

39
 RECENTLY UPDATE GST

GST COUNCIL MEET

26th GST Council Meet held on 10th March 2018

Key Decisions Taken in the 26th GST Council Meet:
1. GST Return Simplification: Current GST Return filing system to

continue for next 3 months

2. On the E-Way Bill Front :

-Inter-state implementation of E-way bill to be implemented from 1st

April 2018

-Intra-state implementation of EWB to kick-off from 15th April

2018 in a phased manner. States to be divided into 4 lots to execute

this phased rollout

40
3. Reverse Charge Mechanism (in case of supplies made by

unregistered persons to registered persons) delayed till 1st July 2018

4. TDS & TCS applicability postponed until 30th June 2018

5. Tax exemption for Exporters extended by 6 months till 1st

October 2018 & the Council has advised the GSTN to expedite the

export refund claims

6. No GST rate changes were announced

Read 26th GST Council meet page to know more about what was

expected of this meet

25th GST Council Meet held on 18th Jan 2018

41
Key Decisions Taken in the 25th GST Council Meet:

1. Late fee reduction:

 For GSTR-1, GSTR-5, GSTR-5A and GSTR-6 the late fees is

reduced to Rs. 50 per day

 In case of Nil return filed for GSTR-1, GSTR-5, GSTR-5A late

fee is reduced to Rs. 20 per day

2. Cancellation of registration by voluntary registrants can be applied

before the expiry of 1 year from the date of registration

3.Cancellation of registration (REG – 29) by migrated taxpayers

extended till 31st March 2018.

4. On successful implementation of e-Way bills, the E-way bill portal

to be shifted to ewaybillGST.gov.in

5. Certain modification to e-way bill rules to be notified soon.

6. Recommendations made by Handicraft committee has been

accepted by the council: The rates are to be worked out later.

7. GST Rates for 29 Goods and 53 Services have been reduced.

These rates will come into effect from 25th January 2018.

42
GST Rate Changes for Goods:

Nil Rated Goods:

1. Vibhuti

2. Parts and accessories for the manufacture of hearing aids.

3. De-oiled rice bran

Rates reduced from 28% to 18%

1. Old and used motor vehicles [medium and large cars and

SUVs] with a condition that No ITC is availed

2. Public transport Buses that run on Biofuel

Rates reduced from 28% to 12%

For Old and used motor vehicles [other than medium and large cars

and SUVs] with a condition that No ITC is availed

43
Rates reduced from 18% to 12%

1. Sugar boiled Confectionery

2. Drinking water packed in 20 litres bottles

3. Biodiesel

4. Drip irrigation system including laterals, sprinklers

5. Mechanical Sprayer

6. Certain listed Bio-pesticides (12 in nos)

7. Fertilizer grade Phosphoric acid

8. Bamboo wood building joinery

Rate reduced from 18% to 5%

1. LPG supplied to Household Domestic Consumers

2. Raw materials and Consumables needed for Launch vehicles,

Satellites and Payloads (Both CGST and IGST Rates)

3. Tamarind Kernel Powder

4. Mehendi paste in cones

44
Rates reduced from 12% to 5%

1. Articles of straw, of esparto or of other plaiting materials

2. Velvet fabric [with a condition that no refund is claimed on

ITC]

Rates reduced from 3% to 0.25%

Diamonds and precious stones

GST Rate increased from 12% to 18%

Cigarette filter rods

Rate increased from 0% to 5%

Rice bran (other than de-oiled rice bran)

Compensation cess is reduced to 0% for following motor vehicles

:Old and used motor vehicles [medium and large cars and SUVs]with

a condition that No ITC is availed

2. Old and used motor vehicles [other than medium and large cars

and SUVs] with a condition that No ITC is availed

45
 3. Vehicle that is cleared as an ambulance (having all accessories

necessary in ambulance)

4. 10-13 seater Buses and ambulances subject to specified

conditions

46
GST Rate Changes for Services:

GST newly applicable on following:

 GST Rate at 5% on small housekeeping service providers,

notified under section 9 (5) of GST Act, who provide

housekeeping service through ECO, without availing ITC

 GST Rate at 28% on actionable claim in the form of chance to

win in betting and gambling including horse racing

47
Rate reduced from 28% to 18%

Services by way of admission to theme parks, water parks, joy rides,

merry-go-rounds, go-karting and ballet

Rate reduced from 18% to 12%

1. Transportation of petroleum crude and petroleum products with

ITC Credit.

2. Metro and monorail projects (construction, erection,

commissioning or installation of original works)

3. Works Contract Services by Sub-contractor to the Main contractor

under the following scenario:

Where the main contractor provides WCS to Central Government, State

Government, Union territory, a local authority, a Governmental Authority or a

Government Entity at the rate of 12%

Note: Similarly, GST Rate for Sub-contract services to the main contractor shall

attract 5% where the Main contractor is providing services to Central

Government, State Government, Union territory, a local authority, a

Governmental Authority or a Government Entity at the rate of 5%

4. Common Effluent Treatment Plants services for treatment of effluents

48
5. Mining or exploration services of petroleum crude and natural gas and for

drilling services in respect of the said goods

Rate reduced from 18% to 5%

1. Tailoring Services

2. Transportation of petroleum crude and petroleum products

without ITC Credit.

3. Job-work services for manufacture of leather goods(Chapter 42)

and footwear (Chapter 64)

49
Following Services are exempted :

 Providing information under RTI Act, 2005 from GST.

 Legal services provided to Government, Local Authority, Governmental

Authority and Government Entity.

 Transportation of goods from India to a place outside India by air or sea

until 30th September 2018:

 Life Insurance to personnel of Coast Guard (under the Group Insurance

Scheme of the Central Government) by the Naval Insurance Group Fund,

retrospectively w.e.f. 1.7.2017

 Dollar-denominated services provided by financial intermediaries located

in IFSC SEZ, which have been deemed to be outside India under the

various regulations by RBI, IRDAI, SEBI or any financial regulatory

authority, to a person outside India

 Pure services provided to Government entity by a Panchayat/

Municipality. Composite supply involving predominantly supply of

services (i.e. up to 25% of the supply of goods) is also exempted.

 Lease of land:

1. By government or local authority to governmental authority or

government entity

50
 2. Supply as a part of specified composite supply of construction

of flats, etc

 Admission to, or conduct of examination provided to all educational

institutions including any service of conducting entrance

examinations on collection of entrance fees

 Reinsurance services in respect of following insurance schemes :

1. General insurance business provided under schemes such

as Pradhan Mantri Suraksha Bima Yojna and others listed in

Notification 12/2017-CGST Rate

2. Life insurance business provided under schemes such as Pradhan

Mantri Jan Dhan Yojana and others listed in Notification 12/2017-

CGST Rate

 Services by way of fumigation in a warehouse of agricultural produce

 Services of admission to planetarium where consideration charged is

below Rs.500

 Subscription of online educational journals/periodicals by educational

institutions who provide degree recognized by any law

 Renting of transport vehicles to a person providing services of

transportation to an educational institution (students, faculty, and staff)

providing education upto higher secondary or equivalent.

51
  Services provided by and to Fédération Internationale de Football

Association (FIFA) and its subsidiaries directly or indirectly related to

any of the events under FIFA U-20 World Cup in case the said event is

hosted by India.

Changes in Exemption limits in the following cases:

 The exemption limit of Rs 5,000 per month per member in respect of

services provided by Resident Welfare Association (unincorporated or

nonprofit entity) to its members against their individual contribution is

enhanced to Rs 7500/-.

 The exemption limit of the amount of cover of Rs. 50,000 enhanced to

Rs. 2 lakhs in respect of services of life insurance business provided

under life microinsurance product approved by IRDAI

 The exemption limit of Rs.250 for services with respect to all the

theatrical performances like Music, Dance, Drama, Orchestra, Folk or

Classical Arts and all other such activities in any Indian language in

theatre increased 500 per person

Others Recommendations to Note:

 To allow ITC of input services in the same line of business at the GST rate

of 5% in case of tour operator service

52
  To extend the period of Viability Gap Funding (VGF) with respect to the

construction of RCS Airports from 1 to 3 years from the date of

commencement of RCS Udan Airport.

 Proposal to not to include the Value of deposits, loans or advances on

which interest or discount is earned in the Value of exempt supply under

sub-section (2) of section 17 (Not applicable to Banking company,

Financial Institutions, NBFC extending deposits, loans or advances)

 To defer the liability to pay GST in case of TDR against consideration in

the form of construction service and on construction service against

consideration in the form of TDR to the time when the possession or right

in the property is transferred to the landowner by entering into a

conveyance deed or similar instrument (eg. allotment letter). No deferment

in point of taxation in respect of cash component.

 Changes in Valuation of Lottery, Betting and gambling

Services:

1. To insert a provision that the value of lottery shall be 100/112 or 100/128

of the price of lottery ticket earlier notified.

2. To insert a provision that the Value of supply of Betting & Gambling

shall be 100 % of the face value of the bet or the amount paid into the

totalizator.

53
  Recommendations made regarding Reverse Charge

Mechanism

1. To include Renting of Immovable property by government or local

authority to a registered person under reverse Charge while renting of

immovable property by government or local authority to unregistered

person shall continue under forward charge

2. To define insurance agent in the reverse charge notification to have the

same meaning as assigned to it in clause (10) of section 2 of the Insurance

Act, 1938, so that corporate agents get excluded from reverse charge

Clarifications

GST Rate Clarifications are given for the following goods:

1. GST at 18% to be charged only on the net quantity of “Poly Butylene Feed

Stock & Liquefied Petroleum Gas” retained for the manufacture of “Poly

Isobutylene or Propylene or di-butyl para cresol” subject to specified

conditions.

2. With Respect to Rail coach industry:

 GST at 5% on Chapter 86 Goods (with condition that no Refund of

unutilized ITC)

54
  GST to attract at applicable rates for the rest of the Goods supplies to

Indian Railways

3. With Respect to Coal Rejects falling under HSN Code 2701:

 GST at 5%

 Compensation Cess at Rs 400 Per Metric Ton

24th GST Council Meet held on 16th December 2017:

1. E way bill rules will be rolled out on a trial basis from 16th Jan 2018

2. The e-way bill for inter-state transport will be implemented in India from 1st

February 2018

3. The states can opt to follow the e-way bill system for intra-state transport

anytime between 1st Feb to 1st June 2018

4. From 1st June 2018 e-way bill rules for intra-state transport will uniformly

apply to all states.

23rd GST Council Meet to be held on 10th Nov 2017

55
 RESEARCH
PROBLEM

56
The Unique Feature of GST is that It will turn markets of India into a Uniform

Market. So It will affect our economy positively and promote inter-regional

Trade. But There are some Bad Impact of GST in our economy, which are

following as…

*GST will turn indian economy into a uniform market. But Uniformity is not

feature of India. Markets of Eastern State are different from Market of South.

So Same rate of Taxation will affect both markets differently. GST has

provision of compensation to the state but It is not defined yet, how will this

compensation would be calculated.

 Whole process of filing GST is online. But In rural and semi-urban

parts of India have less connectivity. And People of these areas have

less or no computer illiteracy. It will promote Tax evasion. When

People dont even know about how to file tax, how they will be able file

tax.

GST is new to Tax payers. So It will take a while to understand it. Tax

payers will have to take extra time to understand it.

 It is estimated that GST may push prices to go up. As GST is replacing

all indirect taxes and some Goods and services are exempted from it.

57
 So To compensate this This exemption GST rate on other articles

would be high.

 Indirect system is very length process in taxation system .

 GST help to reduced the indirect taxes.

 In public no one awareness about GST and how GST effect the life of

common person .after GST ,what is benefit to various sector and

change in various prices.

58
2. Objectives of the study
1. To study GST affect the indirect taxation system & Salient features

with various advantages of GST.

2. To analyze the effevtiveness of the procedure regarding GST in

india

3. To study the economic condition pre and post GST era

4. To analyze and impact of GST in india

59
 RESEARCH
METHODOLOGY
Research Design

A research design is a type of blueprint prepared depending on various types of

blueprints available for the collection, measurement and analysis of data. A

research design calls for developing the most efficient plan of gathering the

needed information. The design of the research study is based on the purpose of

the study.

Types of Research

 Exploratory Research

 Descriptive Research

Exploratory Research

It is done to generate new ideas; respondents should be given sufficient

freedom to express themselves. Sometimes a group of respondents is brought

together and a focus group interview is held.

60
An exploratory study is generally based on the secondary data that are readily

available. It does not have a formal and rigid design as the researcher may have

to change his focus or direction, depending on the availability of new ideas and

relationship among variables.

Descriptive Research

It is undertaken in many circumstances. When the researcher is interested in

knowledge the characteristics of certain groups such as age; sex; education

level; occupation; or income; interested in knowing the proportion of in a given

population who have behaved in a particular manner; making the projections of

a certain things; or determining the relationship between two or more variables,

descriptive study may be necessary.

PRIMARY. DATA
Primary data is important for all areas of research because it is unvarnished

information about the results of an experiment or observation. It is like the

eyewitness testimony at a trial. No one has tarnished it or spun it by adding their

own opinion or bias so it can form the basis of objective conclusions

Sources of data:

61
 Unpublished sources:

i. The data can be governments or private offices can be collected from

these are unpublished data.

ii. The research work, the secret documents.

Published sources:

i. Central and state government publication publishes the various statistics

like crop production, population, statistic, wages expenses.

ii. The commerce association, commerce and trade association, Indian

chamber of commerce federation are publishes several data.

iii. News paper, journals, periodicals etc. publishes the several data.

iv. Some private organization, research berceuse, universities publishes

several data’s.

Periodicals: ICFAI journals

Internet

Value research online.com

Nytimes.com

SAMPLING PROCEDURES

The sample size for the above study was a total of 100 from the whole NCR

(Gurgaon, Noida, Greater Noida, Faridabad and Bhiwadi).The respondents of a

62
Non probability procedures.Nonprobability sampling is arbitrary and

subjective; when we choose subjectively.

The target respondents were HNI’s (High Network Individuals), upper segment

of middle class, high level of middle class, High level executive workforce of

corporations.

Approximately 100 questionnaires were filled and ultimately 70 were

completed with positive response that they have their interest in investing in real

estate.

As a preliminary for the business development of the company it was essential

to find the investor perception about investing in real estate.

For collecting the information a questionnaire was designed focusing on the

main cities in NCR like Gurgaon, Faridabad, Noida, Greater Noida and Bhiwadi

where the company is operating its projects.

The respondents in our sample size are professionals from major public and

private institutions which include managers, consultants, proprietors, business

class etc. Approximately 200 questionnaires were filled and ultimately collected

169 with positive response that they have their interest in investing their funds

in mutual fund industry

METHODS AND INSTRUMENT OF DATA GATHERING

Methods of Data Collection

Primary Data-Primary data is information that you collect specifically for the

purpose of yourresearch project. An advantage of primary data is that it is

63
specifically tailored to your research needs. A disadvantage is that it is

expensive to obtain

 Questionnaire

 Face to face interview

Secondary Data means data that are already available like:

 Various publications of central, state and local government;

 Various publications of international bodies ;

 Technical and trade journals;

 Books, Magazines, Newspapers;

 Reports and Publication of various associations connected with business

and industry, bank, stock exchange etc.;

 Report prepared by research scholars, Universities, economics, etc.;

 Public records and statistics, historical document and other sources of

published information

64
 Data analysis and
interpretation

A)To study GST effect the indirect taxation system and silent features with
the various advantages of GST

65
 Q1- Are you agree GST will bring transparency in taxation
system
70

60

50

40

30

20

10

0
yes no can't say
Series2
Series1 60 30 10

Series1 Series2

Interpretation:-
GST will bring transparency in taxation system 30 people say no ,60
says yes & 10can”say.

66
Interpretation
and easy online procedure there are 70% is agree and 30% is
disagreeGST is simple

67
Interpretation:-

GST is transparent tax and also reduced number of indirect taxes so 20

disagree, 30people agreed& 50 strongly agree.

68
B)To analyses the effectiveness of the procedure regarding GST in india.

INTERPRETATION:-
Transparency of procedure of GST 70 says yes,30 is no but 10 people is
can’t say.

69
 Q2) Do you favour with the equally implementation of
SGST and CGST

90

80

70

60

50

40

30

20

10

0
YES NO
Series1 80 20

INTERPRETATION

80 people favour with equily implementation of sGST& cGST but 20 people

not favour with.

70
 INTERPRETATION

70 people say GST implementation will be good for economic but 30

people not agreed.

71
 C) TO STUDY THE ECONOMIC CONDITION PRE AND POST GST
ERA

Q1) HOW IS EFFECT MULTI TAX IN INDIAN

ECONOMY BEFORE GST.

GOOD BAD

80

70

60

50

40

30

20

10

0
1 2

INTERPRETATION
70 people favour with good impcat of GST but remaining 30 people
favour with bad impact.

72
 Q2) How is influence your business after GST.
140

120

100

80

60

40

20

0
GOOD BAD CAN'T SAY
Series2
Series1 60 30 10
Series4
Series3 60 30 10

Series3 Series4 Series1 Series2

INTERPRETATION

The effect of GST 60 say good ,30 say bad & 10 peoples say can’t say
about impact of business after GST.

73
 Q3) Which is the easiest way to return filling
multi taxation or GST.

80

70

60

50

40

30

20

10

0
MULTI TAXATION GST CAN'T SAY20
Series2 70 20 10

INTERPRETATION
The easiest way to return filling according to 70 people is multi
taxation,20 GST&10 can’t say anything.

74
 Q4) what will the effect of GST on rich, middle
class & poor people
80 1.2

70
1

60

0.8
50

40 0.6

30
0.4

20

0.2
10

0 0
YES NO CAN'T SAY20
Series1 70 20 10
Series2

Series1 Series2

INTERPRETATION
The effect of GST on rich people say 70 ,middle say 20, 10 cant say.

75
D) To analyze and impact on GST in india.

INTERPRETATION

GST will clearly will demartion 40 people say into one for the center
,30 one for the state , 20 for all ,and remain say non above.

76
 Q2).Kindly state if you are aware about impact
of GST in india.

45

40

35

30

25

20

15

10

0
1 2 3 4 5
Series2
Series1 0 0 0 0
Series3 40 30 20 10
Series4

Series1 Series2 Series3 Series4

INTERPRETATION

40 people say yes , 30 no , 20 some what & 10 people say heard

aware about impact of GST in india.

77
 Q3) will GST make cheaper or costlier

45

40

35

30

25

20 40

15 30

10 20

5 10
0 0 0 0
0 0 0 0 0
FOOD ENTERTAINMENT PERSONAL CARE HOUSEHOLD

Series1 Series2 Series3

INTERPRETATION

GST is make cheaper or costly 40 people say food are costly &
remain cheap ,30 say entertainment ,20 say personal care , house
hold.

78
 Major finding

 Tax Slabs: Problems for Small Unorganised Wholesalers

Still fresh from the impact of demonetization, the unorganized cash based small

wholesalers were served a final knockout with GST. Small shopkeepers and

even dealers are now forced to buy their daily grocery supplies from GST

compliant wholesale chains like Walmart and Metro cash. Aside from a slight

price rise of daily use consumer goods, the unorganized sector also needs to

maintain proper GST compliant bills and invoices to survive in the post-GST

regime.

 Creating Invoices and Filing Returns Not Easy

Creating different invoices for goods with different GST rates can be tediousand

time-consuming. SMEs are the most affected by this complex invoice

maintaining system. SME owners have so many types of items with different

GST categories. Maintaining separate invoices is uncalled for uphill task.

79
  Filing GST Returns Remains Error Prone

The tax return filing procedure under GST is also becoming a major cause of a

headache for small businesses. No one seems to be sure about the appropriate

process for filing GST return. For now, people have to file only one return every

month and an annual tax return. For this, you will have to fill GSTR-1 to

GSTR-11 forms on GST online portal. If you are not sure about this, it would be

wise to take the help of a CA.

 GST on Local (GST Exempted) Goods

Clothing and footwear that cost below Rs. 500 are exempted from GST. But

many shopkeepers, especially retail chains are still charging GST rate of 5% in

their bills for such items. The fact that shopkeepers producing computerized

bills and having an AC in the shop are allowed to charge GST on all their goods

encourages such practices.

SUGGESTIONS FOR EFFECTIVE

IMPLEMENTATION

80
14.1Some suggestions for better administrative machinery to

handle the implementation of Goods and Services Tax Act in

India are:

 Standardization of systems and procedures.

 Tax relief in case of branch transfer

 Well defined procedures in case of Job works

 Uniform dispute settlement machinery.

 Adequate training for both tax payers and tax enforcers.

 Re-organization of administrative machinery for GST

implementation.

 Building information technology backbone – the single most

important initiative for GST implementation.

 Uniform Implementation of GST should be ensured across all

states (unlike the staggered implementation of VAT) as many

issues might arise in case of transactions between states who

comply with GST and states who are not complying with GST.

81
 CONCLUSION

It is encouraging that when GST was introduced in New Zealand in 1987, it

resulted in 45% higher revenue than expected, mainly due to improved

compliance. VAT has really showed a progress in many States and the Centre

82
has rightly compensated to many States. The success story would continue by

the implementation of GST in India. There were hurdles and agitation for

implementation of VAT in India. Puducherry was the last but before/State to

implement VAT. GST is an extension of VAT which includes services also.

Initial losses of revenue to States would be compensated by the Centre. When

GST is implemented in good spirit the revenue of both Central Government and

State Government shall be increasing in the long run. The main lag behind the

implementation of GST is due to differences amonGST the Centre and States on

the RNR (Revenue Neutral Rate), compensation package and its Constitutional

amendment which is required to be passed with two-third majority in both the

Houses of Parliament and ratification by a simple majority by at least half of

State assemblies. The Centre has decided to review the existing exemptions

from Central Excise Duty so that list of goods exempt from CGST and SGST

list and 99 items exempted from VAT are taken off from both the components

of GST. VAT has to some extent reduced tax-evasion and frauds. It is

encouraging to note that most of the traders and general public are aware of

VAT. GST, the major reforms on indirect taxes, will reduce tax burden due to

cascading effect. The efficiency in tax administration will be improved, indirect

tax revenue will be increased considerably due to inclusion of more goods and

services, and at last the cost of compliance will be reduced for the dealers. The

implementation of GST will be in favour of free flow of trade and commerce

throughout the country. This single most important tax reform initiative by the

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Government of India since independence provides a significant fillip to the

investment and growth of our country’s economy. To get the desired result, it

should be assured that the benefit of input credit is ultimately enjoyed by final

consumers. 315 The Union Finance Minister Shri Pranab Mukherjee (Meeting

of Empowered Committee) on 18th July, 2011 has assured to include necessary

legitimate issues in the amendment bills as desired by the States through the

empowered committee. Introduction of GST is a desire need for the

multinational companies as most of the countries have already implemented

GST. In spite of several hurdles, there is a scope for implementing GST in April

2012. Reforms are always continuous and all should ready, receive and enjoy

the fruits of that.

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 Suggestions

and

Recommendations 1.

The present study reveals that there are positive behavioural changes in the

VAT assessees with regard to their financial and tax management, mobilization

and utilization of funds, compliance of tax law, proper maintenance of accounts

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and statements, regular filing of returns and prompt payment of tax. These

practices lead to the greater credibility of the VAT assessees which results in

psychological changes in confidence, trust and approach of banks, other

financial institutions, suppliers, and general public towards the VAT assessees.

Hence, these positive factors should be considered by the assessees while

designing their capital structure under the VAT system of taxation. 2. The

present study reveals that the VAT system of taxation has a significant impact

on investment decisions of the different categories of the VAT assessees. These

decisions have long term implications for the business because they affect the

future profitability and cost structure. It influences the rate and direction of a

firm’s growth. Therefore, the VAT assessees should be very careful and vigilant

in taking 322 investment decisions and should avoid over-investment and

under-investment in fixed assets. 3. Certainty and transparency of tax structure,

high credibility, input tax credit practices and input tax credit on capital goods

are the motivating factors for investment under VAT system of taxation. Hence,

these factors should be considered by the VAT assessees, while designing their

capital budgeting policies. Moreover, the policy makers should ensure that these

provisions are maintained and new similar provisions are incorporated at the

time of designing GST. 4. The study revealed that liquidity position of assessees

is badly affected under the VAT system of taxation due to unnecessary delay in

refund of excess input tax credit, non-availability of input tax credit in respect

of purchase from presumptive tax dealer and compounded tax dealer, high

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purchase cost due to lack of qualified suppliers, high cost of maintenance of

more accounts and statements in connection with purchase and sales etc. This

liquidity crisis creates some dilemma among the lower income traders and

manufacturers. So the policy makers must consider these factors, while

redrafting the existing law and designing new tax policies. 5. Input tax credit

practice under the VAT system of taxation is definitely an accelerating factor of

the liquidity position of the business. Hence the policy makers and authorities

must take necessary action, to provide input tax credit in respect of presumptive

tax, compound tax, CST, purchase tax, entry tax and other indirect taxes and to

make necessary changes in the Act. 6. The study reveals that input tax credit on

capital goods under VAT, influences the replacement of worn-out equipment,

installation of new machinery, and retaining and extending market share of

business by mechanization process. The stipulation that some capital goods

would not qualify for tax exemption would lead to some confusion. Hence, the

facility of tax set off should be extended to all capital goods. 323 7. The present

study revealed that the profit reinvestment practices of the assessees under the

VAT system of taxation is high and appreciable due to the certainty and

transparency of tax structure, stability and credibility of business, input tax

credit on capital goods and better pricing and high competition in market .

Hence, the Government should take necessary steps to promote and maintain

these favourable practices and to channelize this investment for the overall

economic and social growth and welfare. 8. The present study revealed that the

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revenue expenditure of assessees under the VAT system of taxation is very

high. This high expenditure pattern is not affordable to lower income traders

and lower income manufactures. Hence, necessary provisions should be

included in the Act for liberalizing accounting and tax practicing procedures in

respect of these lower income groups. 9. Under the VAT system of taxation, the

dealer is liable to pay ‘output tax on the ‘total sales,’ irrespective of the fact

whether the amount is recovered from the debtors or not. Hence, many a time,

dealers are compelled to pay tax on bad debts also. This is totally against social

justice and business ethics. Therefore, it is necessary to include adequate

provisions in the VAT Act, for refunding the output tax paid on bad debts. 10.

As a consumer State, the present turnover limit for compulsory registration

under the VAT system in Kerala can be enhanced upto 10 lakhs or 15 lakhs. 11.

The study revealed that the provision for renewal of registration for each year

creates more inconvenience to dealers. Therefore the renewal period of

registration can be extended to three or five years. 12. The present turnover

limit for “Compulsory Audit System” prevailing under the VAT system is not

rational and satisfactory. So this limit should be enhanced upto rupees two

crores.

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ANNEXURE &QUESTIONNAIRE

APPENDIX – I - QUESTIONNAIRE

My name is Aishwarya Raj Rastogi I am student student of mba Finance

and Marketing from g.l. bajaj institute of managementand reserach ,

supervised

by Dr. Sarvendu Tiwari. My research aims to evaluate and document the

understanding and

expectations from the proposed Goods and Services Tax (GST) to be

introduced in India.

You are being invited to take part in this research because your

experience with taxation and the

financial services industry coupled with your knowledge of the proposed

GST will greatly

expand my understanding of the overall experience of GST as part of my

academic study.

The data from this study will be used in the completion of my doctoral

programme, and it may

be included in my doctoral thesis, journal articles, and presented at

conferences. Your response

89
 will be anonymous, and so anyone who takes part in the research will not

be identified.

This survey will take about 5 – 10 minutes. Most questions are multiple

choice and we ask that

you simply provide us with your best answer.

Completion of the survey will be treated as explicit consent to participate

in the research.

Because the survey is anonymous, it is not possible to withdraw from the

participation after the

submission of questionnaire.

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Questionnaire

A)To study GST effect the indirect taxation system and

silent features with the various advantages of GST.

Q1- Are you agree GST will bring transparency in taxation system.
1) YES
2)NO
3)CAN’T SAY
Q2- Is a simple and easy online procedure
1) YES
2) NO

Q3- GST is a transparent tax and also reduce number of indirect taxes. Is
a good decision or not?
1)Strongly agree
2)Agree
3)Disagree

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 B)To analyses the effectiveness of the procedure
regarding GST in india.

Q1) Do you agree transparency of procedure of GST.

1) yes
2) no
3) can’t say

Q2) Do you favour with the equally implementation of SGST and CGST

1) YES
2) NO

Q3) After GST implementation like SGST,CGST& I GSTfor the indian

economy will be good or not.
1) YES
2) NOT

C) TO STUDY THE ECONOMIC CONDITION

PRE AND POST GST ERA.

Q1) How is effect multi tax in indian economy before GST.

1) GOOD

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 2) BAD

Q2) How is influence your business after GST.

1) GOOD
2) BAD
3) CAN’T SAY

Q3) Which is the easiest way to return filling multi taxation or GST.
1) MULTI TAXATION (VAT)
2) GST

Q4) what will the effect of GST on rich,middle class & poor people.
1) YES
2) NO
3) CAN’T SAY

D)To analyze and impact on GST in india.

Q1).GST will clearly will demartion into two portion.

1) One for the centre
2) One for the state.
3) For all countries.
4) None above

Q2).Kindly state if you are aware about impact of GST in india.

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 1) YES
2)NO
3)SOME WHAT
4) HEARD ABOUT IT

Q3) will GST make cheaper or costlier

1) Food
2) Entertainment
3) Personal care
4) House hold

BIBLIOGRAPHY
BOOKS REFERRED

Bikas E. and Andrukaite E., 2013, Factors affecting Value Added Tax revenue,
European Scientific Journal,

Borec T. and Merz M. and Salanki A., 2013, World Wide VAT Forum: E
Commerce, Tax Planning International – Indirect Taxes,

Bovenberg A.,1992 taxation in developing countries, International Monetary

Fund – Staff Papers,, Indirect

94
 website
GSTN goods and service tax network: http://www.GSTn.org/
GSTN India-Goods and service tax in India: http://www.GSTn.org/
Types of Invoices in GST: http://www.GSTindia.com/types-of-invoices-in-
GST/
GST: http://www.GSTindia.com/various-tax-slabs-under-GST-worry-
traders-cait/
GSTonline India.com: http://www.GSTindiaonline.com/

GST compliance- Goods and service

tax: http://www.ey.com/in/en/services/ey-goods-and-services-tax-GST
Economic times: http://economictimes.indiatimes.com/GST

explained: https://cleartax.in/s/GST-law-goods-and-services-tax

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tax: http://www.GSTindia.com/about/

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