SUMMER PROJECT

PROGRESS REPORT

NO.3

Project

on

Accountancy

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIRMENTS

FOR THE

MASTER OF BUSINESS ADMINISTRATION (MBA)

OF
CHANDIGARH UNIVERSITY, GHARUAN, MOHALI

SUBMITTED TO: SUBMITTED

BY: Neha
Name:

Dr.Ramneek Ahluwalia UID: 22MBA10638

Designation: Associate PROFFESSOR Batch:2022-24
FINDINGS, CONCLUSIONS AND MANAGERIAL IMPLICATION

After completing the survey and ANALYSING the questionnaire I come across following facts
and come at findings mentioned below:

​ According to data collected by me through the questionnaire, in the survey 15(62.5%)

males and 9(37.5%) females showed up for the survey with tell that Male are more aware
of the GST TAXATION in our country and the concept related to it. The need for GST in
INDIA according to collected sample is a positive step by Government Of INDIA.

​ According to data collected through the questionnaire I come across both the parties
that is TAX COLLECTING Party that include shopkeeper and other manufacturer that
deal the GST and the taxation system. And I also come across the TAX PAYER of the
taxation system which include private working professionals , government working
professionals, housewife and some college going students.

​ According to the TAX payer the One nation One TAX system is highly appreciable and it
was need of an hour because this taxation system is very much effective and moreover
the tax slab rate of each good or service being produced remains the same through
INDIA which makes it easier for them to identify the choose the item and pay the same
amount anywhere in the country.

​ According to the TAX COLLECTOR, the one nation one tax system was much accepted
by people of the country and this system is liked by all because of transparency of
collection of tax from people paying back to the GOVERNMENT OF INDIA. This tax
collected from people in the society, was used for the betterment of the society itself
through various welfare programmed for poor and privileged people of the society.

​ The Taxation system according to the survey collected is much simpler and easy to understand
as compared to previous taxation system of VAT.

​ GST will increase tax compliance, broaden the tax base, and eliminate unfavourable state
competition. It will evenly shift the tax burden between manufacturing and services.

​ It guarantees that the tax system is consistent between states. It will streamline input tax credit
(ITC) flow and consolidate the tax base, lowering the cost of products and services.
 ​ According to survey THE GST TAXATION system helps to improve the economic transactions of a
country and help in achieving high GDP Growth and moreover it also help to bring economic
stability to government as it is indirect revenue earned by government of a country

​ It will reduce cascading effects and duplicate taxes, which will improve compliance. Additionally,
it will increase tax system transparency, which will make tax evasion more challenging.

Impact of GST in INDIA on Various sectors

With a single set of tax rates covering the entire Indian economy, the Goods and Services Tax
would make it easier to start and operate enterprises, which will raise savings and lower costs
across all industries. Due to lower tax rates, certain industries will benefit from the GST, while
others will suffer due to a higher cost .

(i) Real estate: A report by PTI citing tax advisor EY states that the effective GST rate on
real estate projects that are still under development would be just 12% and not 18% because of a
land cost abatement.

(ii) Impact on transportation: The GST reduces the tax on cab and taxi fares from 6% to 5%.
GST is advantageous for air travellers since it lowers the tax rate to 5% for economy class and
12% for business class. Train fares, on the other hand, are mostly unaffected because the
increase from 4.5% to 5% is rather little. The new tax rate does not apply to sleeping passengers,
but it increases the cost of first-class travel.

(iii) Building Supplies: According to a new government order, GST on homes and
apartments that are under construction would be taxed at 18%, which comprises 9% SGST and
9% CGST. The government has also permitted a land value deduction equal to one-third of the
entire sum a developer charged, making the actual tax rate 12%. The 12% slab granted for the
real estate industry will only effect building materials, not the price of apartments

(iv) FMCG GOODS: The GST would help the fast-moving consumer goods industry
because there is a sizable unorganised market at the moment. The GST rate on items like
toothpaste,
soap, and hair oil has been reduced by 500-600 bps from the prior rates. The shift will be
advantageous for businesses like Colgate-Palmolive, HUL, Britanina, Heritage Food,
etc.

(v) The automotive industry is adjusting to the GST regime since the government is
particularly careful about this industry. The production of a very large number of vehicles is the
focus of the very large car industry.

significant number of automobiles and bicycles annually. Overall, it can be said that because of
the lower tax situation, the GST would have a less impact on the automotive sector than the old
tax system. Due to the hardships the automotive industry has already experienced, such as
demonetization and the impact of the emissions standards rule on the business, it will now profit
from the GST with the least amount of difficulty and rate fixing across the board.

(vi) Cement industry: The introduction of the GST would in some way pose a threat to the
sector. The GST Council voted on high tax rates for the cement business of 28%, which appears
to overtax the sector with previously existing tax entities and underdeveloped metropolitan
areas. Between FY 2011 and FY 2017, the Indian cement industry is anticipated to increase at a
CAGR of 11.14% in volume terms, reaching 407 million tonnes by March 2017.

Important cement producers including Ultratech, JK Cement, and Shree Cement are
anticipated to experience some setbacks as a result of this judgement over the new tax reform
in India.
According to sources, the implementation of a 28% Goods and Services Tax on the cement
sector in India would undoubtedly make growth decisions difficult and have an impact on
profitability. The manufacture of concrete admixtures would also be negatively impacted by
GST India, which is also anticipated to have a severe effect on the cement industry.

(vii) Online shopping: As a result of the introduction of the GST, several Ecommerce
businesses would experience a significant rise in their workload and costs.

(viii) Telecom Sector: The cost of mobile phone, SMS, and broadband services will increase
as a result of the existing 15% VAT rates being replaced by an 18% GST rate. Large telecom
oligopolies like Airtel, Vodafone, Idea, and others would suffer as a result.

(ix) IT firms: GST will make it easier to integrate digital systems and services. GST will
raise the tax rate from 14 to 15% to 18%, increasing the price of electronic items including
smartphones, laptops, and other devices.

(x) There are three types of small businesses: Below the threshold, businesses do not need to
register for GST; between the threshold and composition turnovers, businesses can choose to pay
a turnover-based tax or enlist in the GST regime; and beyond the threshold level, businesses are
subject to GST regulations. After the implementation of GST, manufacturers and dealers will
pay less in taxes.

(xi) Entertainment: The GST can reduce taxes by 2 to 4%, but moviegoers would pay a
higher tax rate. GST will soon be able to meet requests and provide the greatest solutions for
growing the film industry's revenue.

(xii) Small Scale Enterprises: There are three types of small businesses: Below the
threshold, businesses do not need to register for GST; between the threshold and composition
turnovers, businesses can choose to pay a turnover-based tax or enlist in the GST regime; and
beyond the threshold level, businesses are subject to GST regulations. After the
implementation of GST, manufacturers and dealers will pay less in taxes.

OBERVATION of the Questionnaire:

From Above depicted questionnaire out of 24 respondents who answered the questionnaire,
around 62.5% were male candidate actively participated and around 37.5% female candidate
which shows male keen interest for need of GST TAXATION SYSTEM over the opposite
gender. The male candidate here includes customer and shopkeeper who are updated about the
prevailing Taxation Environment implemented on 1 July 2017 and is also going On. The
number of female I have interacted were home maker and college going girls which showed
there less interest in Taxation system of INDIA as compared to men.

Out of the 24 responses only 12 person pay tax according to data collected, which was
surprising to my knowledge. When I analyzed data I come to know that people do not sometime
ask for bill from the shopkeeper and moreover 1 person did not answered to question because
according to him he could understood the tax I was talking about. The shopkeeper always pays
taxes to government on time which makes them easy for smooth functioning of business as it
help them to get the benefit Of GST Refund which they can use to manage other expense of
business.

: According to data collected from people 70.8% states that need of GST was required was as it
has positive impact on increase in demand for goods and services as Government has put
various things according to necessity and need in slab rate of 5% where as government have put
luxury item in 28% slab rate which eventually lead to reduce social disparity between rich and
poor.
Where as 20.8% states that it has negative impact on demand for product and service, as it is
indirect tax and is need to paid by all people of society weather rich or poor which has increased
difference in price of goods and services which are not affordable for many people and it has
lead to inflation in country.
According to data collected from 24 respondent, 83.3% are in favor of GST TAXATION system
because as it is ONE NATION ONE TAX which help the customer and shopkeeper to
understand it better because of simple Tax structure. The GST is favored by most of people as it
helps to remove Cascading effect of tax on goods and services being produced. The16.7% are
not in favor of this system and consider it burden as it applicable to all class of customer
irrespective of income group

: According to 47.6 % people of sample size it was easy to use as government was aware of the
challenges that would occur to user of GST, government put efforts to resolve the issues by
establishing grivience cell for GST related complaints and also have set up a different
department to handle the same. According to 19% it was difficult to use as it involve being
literate person and basic computer knowledge which is not possible for everyone in INDIA
because people here try to prioritize earning at early over education for living their life., and to
the rest the people say that it could have been better by providing knowledge of gst and
establish financial awareness campaign for interested part of people.

According to data collected 54.2% were aware of GST SLAB Rate being applicable in present
times which shows a positive impact of GST TAXATION system and they were also aware of
how to claim refund from government. The Knowledge of GST helped the government in
positive manner to collect tax from shopkeeper on time where as according to 37.5%
answered no which means they only have knowledge of slab rate only. They were not aware
of technical terms and procedure to be followed for there own benefit.

: According to 87% of people of sample size GSTIN PORTAL established by Finance ministry
of India is user friendly as it is smooth for functioning and updating and filling GSTR returns on
time to government. The GSTIN Portal helps the shopkeeper to keep track of the taxpaid by him
and amount to be refunded by government of INDIA. Wher as 13% states that it requires a
person to be computer and technology litrate to operate the GSTIN portal for which they have to
pay amount to professional to get their tax paid on their behalf for which they charge fee from
them.

According to 40.9% of people of sample size states that there has been reduction in evasion of
taxation by people and shopkeeper because government has set up the transparent taxation
system of leving and collecting tax from people as they to file GSTR return according to law
mentioned in GST ACT but to my surprise 18.2% people states no in reduction of tax because
people in INDIA try to find out loop of law before it is being implemented in real picture, to
evade tax people try to avoid billing of small items leading to tax evasion which cause a big
economic loss to government and benefit to buyer and seller both. According to 40.9%
People they are not sure of reduction in tax evasion as they are not either involved or haven’t
done in there life time with intention to evade tax.

Most of the respondent in there answered that they would include petroleum in there GST
taxation system in Necessity goods which help them in reduced oil prices because in nowdays
the petrol and disel are out of GST tax which makes it unaffordable for average middle class
and other unprivileged section of society Where as one of respondent responded that Bringing
awareness regarding it so that the freshers won't take it as a threatening task ONE OF
respondentant responded Our daily use items such as soaps, cremes, movie tickets, electrical
goods should not be taxed at 18%.

Conclusion: Need of the GST Taxation in INDIA

GST replaced a number of indirect taxes including central excise, service tax, VAT, and several
others, simplifying the tax system. The tax system was simplified by this streamlining, which
also lessened the burden of compliance for enterprises.

Increased tax compliance and collection: The GST forced enterprises with yearly revenues over a
specific level to register, which increased the number of businesses participating in the formal
economy. This enhanced tax compliance and revenue collection by extending the tax base.

Cascading impact is eliminated: Prior to the GST, taxes were imposed one on top of the other,
which had a cascading effect on the ultimate cost of goods and services. Since GST is a
destination-based tax, it reduced this cascading effect, making the tax system more effective.

Enhanced ease of doing business: Businesses found it simpler to operate and grow across the
nation because to the country's unified tax rates and streamlined tax structure. Logistical
inefficiencies decreased as interstate freight transit became more efficient.
Transparent and technology-driven: GST is technology-driven, requiring all returns,
invoices, and compliance to be submitted online. As a result, tax administration is now more
open, effective, and resistant to corruption.

Reduces tax evasion: A strong IT infrastructure and the smooth flow of input tax credits both
contribute to reducing tax evasion and improving the ability of tax authorities to execute the law.

Reduces the prevalence of the informal sector by encouraging firms to engage in the formal
economy through the benefits of input tax credits and compliance requirements under the
GST framework.

Increases supply chain efficiency, lowers costs, and lowers consumer prices, which promotes
consumption and economic growth. GST does this by reducing trade barriers between states and
establishing a single market.

Revenue distribution and cooperative federalism: By allowing both the national and
state governments to manage and collect the tax, the GST promotes cooperative
federalism.
Additionally, it allows for a fair income split between the federal government and the states,
fostering favourable budgetary ties.

Limitation

While the Goods and Services Tax (GST) has benefited the Indian economy in a number of
ways, it also has significant drawbacks and difficulties. The following are some GST restrictions
in India:
GST in India is subject to a number of tax rates, including four major rates (5%, 12%, 18%, and
28%). Some goods are still free from GST. This intricate rate structure may cause
categorization disagreements, muddle, and administrative difficulties.

Compliance burden: For small and medium-sized firms, the GST compliance procedure,
including filing frequent returns, can be onerous. They must keep accurate records and follow
stringent deadlines, which might put a burden on their resources.

Regular updates and modifications: Since its adoption, the GST law has undergone a
number of revisions, which has made it difficult for businesses to comply with it. It's
challenging for firms to swiftly react when tax rates, laws, and regulations are often changed.

Despite the fact that GST is technology-driven, there have been certain problems with the IT
infrastructure's ability to effectively support GST compliance. The GSTN (Goods and Services
Tax Network) interface has been plagued by technical issues, making it impossible to file returns
and get input tax credits.

Issues with classification and interpretation: Deciding the proper tax rate for some goods and
services can be arbitrary, which can result in disagreements between taxpayers and tax
authorities. Legal disputes and administrative difficulties may come from ambiguities in
classification and interpretation.

Impact on small businesses: Larger registered firms that are eligible for input tax credits may
compete more aggressively with small enterprises that fall below the threshold level for GST
registration.

Impact on some businesses: The GST does not apply fully or at all to several industries,
including petroleum and real estate. This exclusion complicates the tax code and hinders
the efficient use of input tax credits.
Challenges with cross-state compliance: Companies that operate in numerous states must abide
by the various state GST regulations, which can be difficult to comply with and be time-
consuming to administer.

State revenue issues: The implementation of the GST has resulted in a change in the tax
collecting process, which has an effect on the revenues of some states, particularly those that
previously relied on specific indirect taxes.

GST implementation is essential given the fragile state of the Indian economy.

The production and consumption of goods and services are surely rising, and the complexity of
tax administration and the expense of compliance are also rising due to the existing tax system's
multiple levies. Thus, the application of GST can provide a straightforward, approachable, and
transparent tax structure. When implemented, it will create a cohesive tax structure that will
combine the majority of the indirect taxes in place today. Over time, this will increase output,
provide more job opportunities, and boost GDP by 0.5 to 1.5%. If effectively implemented, it
may also be utilised as a tool for managing fiscal policy because the tax rate is the same
throughout the board.

Additionally, it will result in lower operating expenses, increasing the competitiveness of

domestic products on both the home and global markets. Without a question, the GST would
provide India a top-notch tax structure by giving the industrial and service sectors varied
treatment. But everything will depend on how well it is planned and when it is put into action.
The implementation of the GST faces a number of difficulties, as was previously highlighted in
the article. To reconcile the conflicting interests of numerous stakeholders and fulfil the pledge
for a significant change of India's tax structure, additional analytical study is required.

Additionally, it will lead to decreased operational costs, improving local products'

competitiveness on both domestic and international markets. The GST will undoubtedly provide
India a top-notch tax framework by treating the industrial and service sectors differently. But
how well it is designed and when it is implemented will determine everything. As was
previously mentioned in the article, there are a number of challenges with the GST's
implementation.
Additional analytical research is needed to resolve the competing interests of different parties
and accomplish the commitment to significantly alter India's tax system.
The GST will have numerous difficulties when it is put into place, but it will also provide a
number of advantages. Overall, this analysis has led us to the conclusion that GST is vital to the
expansion and advancement of our nation.

The GST was first discussed and advocated in India a few years ago, but the current BJP
administration, led skillfully by Prime Minister Shri Narendra Modi, implemented it on July 1,
2017. The new administration was strongly in favour of the introduction of the GST in India due
to the many advantages it would bring, as described in the document above. GST will have an
influence on all industries in India, including small SMEs, communications, the automotive, and
manufacturing. One of the largest tax reforms, the GST, would subject the entire country to a
single rate of taxes. According to analysts' predictions, the GST will improve tax collections,
accelerate India's economic growth, and eliminate all tax barriers between the Central and State
Governments.