MANSI BHARAT GADA DEGREE COLLEGE OF COMMERCE

AND SCIENCE
(AFFILIATED TO UNIVERSITY OF MUMBAI)

(NAAC ACCREDITED "B" GRADE & ISO 9001:2015 CERTIFIED)

A PROJECT ON : “IMPACT OF GST ON COMMON MAN”

Submitted to

University of Mumbai for partial completion of the degree of

Master of commerce (Accounts)

Under the Faculty of Commerce

By

DOSHI YASH JIGNESH

Under the Guidance of

MR. MITESH M. GOSRANI

University of Mumbai
2023-2024
 “IMPACT OF GST ON COMMON
MAN”

A Project Submitted to

University of Mumbai for partial completion of the degree of

Master of commerce (Accounts)

Under the Faculty of Commerce

By

DOSHI YASH JIGNESh

Under the Guidance of

MR. MITESH M. GOSRANI

MANSI BHARAT GADA DEGREE COLLEGE OF

COMMERCE
( AFFILIATED TO UNIVERSITY OF MUMBAI )
( NAAC ACCREDITED "B" GRADE & ISO 9001:2015 CERTIFIED )

YEAR:- 2023-24
OSWAL SHIKSHAN AND RAHAT SANGH SANCHALIT

MANSI BHARAT GADA DEGREE COLLEGE OF

COMMERCE
 ( AFFILIATED TO UNIVERSITY OF MUMBAI )
( NAAC ACCREDITED "B" GRADE & ISO 9001:2015 CERTIFIED)

CERTIFICATE

This is to certify that MR. DOSHI YASH JIGNESH, has worked and
duly completed his project work for the degree of master of commerce
(Accounts) under the faculty of commerce in the field of accounts and
his project is Entitled “IMPACT OF GST ON COMMON MAN’’
under my supervision.

I further certify that the entire work has been done by the learner under
my guidance and that no part of it has been submitted previously for any
Degree or Diploma of any University.

It is his own work and facts reported by his personal finding and
investigations.

Name And Signature Of The Guiding Teacher

Date of submission

Declaration by learner
I The Undersigned MR. DOSHI YASH JIGNESH Here By, Declare That
The Work Embodied In This Project Work Titled “IMPACT OF GST ON
COMMON MAN’’ Forms My Own Contribution to The Research Work
Carried Out Under The Guidance Of Mr. Mitesh M. Gosrani Is A Result Of
My Own Research Work And Has Not Been Previously Submitted To Any
Other University For Any Other Degree/ Diploma To This Or Any Other
University.

Wherever Reference Has Been Made To previous Works of Others, It Has

Been Clearly Indicted as Such and Included in The Bibliography.

I, Here by Further Declare That All Information of This Document Has Been
Obtained and Presented in Accordance with Academic Rules and Ethical
Conduct.

Name And Signature Of

Learner

DOSHI YASH JIGNESH

Certified By

Name And Signature Of The Guiding Teacher

MR. MITESH M. GOSRANI
 Acknowledgement

To list who all have helped me is difficult because they are so numerous
and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and

fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank my Principal, Mr. Mitesh M. Gosrani for providing

the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator, Mr. Mitesh M. Gosrani

for his moral support and guidance.

I would also like to express my sincere gratitude towards my project guide

Mr. Mitesh M. Gosrani whose guidance and care made the project
successful.

I would like to thank my College Library, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my Parents
and Peers who supported me throughout my project.
 TABLE OF CONTENTS
Sr. TOPIC Page
No. No.
1 Abstract

2 Introduction

3 Research Methodology

4 Literature Review

5 Data analysis,
Interpretation & Planning

6 Conclusion

7 Recommendation

8 Bibliography

9 Questionnaire
 ABSTRACT

Goods and Service Tax or GST as it is known is all set to be a game

changer for the Indian Economy Taxation system. GST evolved an all India
One Nation One Tax regime. It has now been more than a decade since the idea
of national Goods and Services Tax (GST) was mooted by Kelkar Task Force
in 2004. The Task Force strongly recommended fully integrated ‘GST’ on
national basis.
After Independence, Goods and Service Tax (GST) would be a very
significant and giant indirect tax structure reforms in the country. It is designed
to support and enhance the economic growth of the country. It is a
comprehensive tax that will integrate all indirect taxes of states and central
governments and the unified economy into a seamless national market.
Because of its transparent and self-policing character, it would be easier to
administer. According to me, it is expected to iron out wrinkles of the existing
indirect tax system and play a vital role in a country’s growth. By
amalgamating a large number of Central and State indirect taxes, it would
mitigate cascading effect or double taxation in a major way and pave the way
for a common national market. So, from a common man or consumer point of
view, the biggest advantage would be in terms of reduction in the overall tax
burden on goods, which was estimated to be around 25%-30% before the
implementation of GST. This Project Work highlights the concept of GST and
its impact on the common man.
 INTRODUCTION

Tax policies play an important role on the economy through their

impact on both efficiency and equity. A good tax system should keep in view
issues of income distribution and, at the same time, also endeavour to generate
tax revenues to support government expenditure on public services and
infrastructure development.

The introduction of Goods and Services Tax (GST) would be a very

significant step in the field of indirect tax reforms in India. By amalgamating a
large number of Central and State taxes into a single tax, it would mitigate
cascading or double taxation in a major way and pave the way for a common
national market. From the consumer point of view, the biggest advantage
would be in terms of a reduction in the overall tax burden on goods, which is
currently estimated at 25%- 30%. Introduction of GST would also make our
products competitive in the domestic and international markets.

It will lead to the abolition of taxes such as Octroi, Central Sales Tax,
State level Sales Tax, Entry Tax, Stamp duty, Telecom License Fees, Turnover
Tax, Tax on Consumption or Sale of Electricity, etc. It will also improve
government's fiscal health as the tax collection system would become more
transparent, making tax evasion difficult. CAG Mr. Vinod Rai in his inaugural
address to the National Conference on GST put forth the concept as "An
integrated scheme of taxation that does not discriminate between goods and
services and is a part of the proposed tax reforms that centre on evolving an
efficient and harmonized consumption tax system in the country."

GST stands for Goods and Service Tax. It was first initiated in 1986 by
Vishwanath Pratap Singh 7th Prime Minister of India. After that in 2007, the
current government proposed to implement GST and presented the same in Lok
Sabha in 2011. In Dec 2014 GST again presented in Lok Sabha and in same is
passed in 2015. After approval of Rajya Sabha same is called as 101th
amendment of the Constitution and is rolling out from 1 July 2017. After the
passage of 25 years of economic reforms in the indirect taxes is going for a
revolutionary change in the form of GST.

GST is defined as the giant indirect tax structure designed to support

and enhance the economic growth of a country. More than 150 countries have
implemented GST so far. However, the idea of GST in India was mooted by
Vajpayee government in 2000 and the constitutional amendment for the same
was passed by the Loksabha on 6th May 2015 but is yet to be ratified by the
Rajyasabha. However, there is a huge hue and cry against its implementation. It
would be interesting to understand why this proposed GST regime may hamper
the growth and development of the country.
 GOODS AND SERVICES TAX (GST)

The Goods and Services Tax has revolutionized the Indian taxation
system. The GST Act was passed in the Lok Sabha on 29th March, 2017, and
came into effect from 1st July, 2017.

Goods & Services Tax Law in India is a comprehensive, multi-stage,

destination-based tax that will be levied on every value addition.

In simple words, GST is an indirect tax levied on the supply of goods

and services. GST Law has replaced many indirect tax laws that previously
existed in India. So, before Goods and Service Tax, the pattern of tax levy was
as follows:
 Under the GST regime, tax will be levied at every point of sale.

Now let us try to understand “GST is a comprehensive, multi-stage,

destination-based tax that will be levied on every value addition.”

MULTI-STAGE

There are multiple change-of-hands an item goes through along its supply chain
: from manufacture to final sale to consumer.

Let us consider the following case:

 Purchase of Raw Materials
 Production or Manufacture
 Warehousing of finished goods
 Sale of the product to the retailer
 Sale to the end consumer
Goods and Services Tax will be levied on each of these stages, which makes it
a multi-stage tax.

Value Addition
The manufacturer who makes shirts buys yarn. The value of yarn gets increased
when the yarn is woven into a shirt.
The manufacturer then sells the shirt to the warehousing agent who attaches
labels and tags to each shirt. That is another addition of value after which the
warehouse sells it to the retailer.

The retailer packages each shirt separately and invests in the marketing of the
shirt thus increasing its value.
GST will be levied on these value additions i.e. the monetary worth added at
each stage to achieve the final sale to the end customer.

DESTINATION-BASED
Consider goods manufactured in Rajasthan and are sold to the final consumer
in Karnataka.
Since Goods & Service Tax (GST) is levied at the point of consumption, in this
case Karnataka, the entire tax revenue will go to Karnataka.
HISTORY OF GST IN INDIA
The reform process of India's indirect tax regime was started in 1986 by

Vishwanath Prata Singh, Finance Minister in Rajiv Gandhi’s government, with

the introduction of the Modified Value Added Tax (MODVAT). Subsequently,
Manmohan Singh,the then Finance Minister under P V Narasimha Rao,
initiated early discussions on a Value Added Tax at the state level. A single
common "Goods and Services Tax (GST)" was proposed and given a go-ahead
in 1999 during a meeting between the then Prime Minister Atal Bihari
Vajpayeeand his economic advisory panel, which included three former RBI
governors IG Patel, Bimal Jalan and C Rangarajan. Vajpayee set up a
committee headed by the then finance minister of West Bengal, Asim Dasgupta
to design a GST model.
The Ravi Dasgupta committee was also tasked with putting in place the back-
end technology and logistics (later came to be known as the GST Network, or
GSTN, in 2017) for rolling out a uniform taxation regime in the country. In
2002, the Vajpayee government formed a task force under Vijay Kelkar to
recommend tax reforms. In 2005, the Kelkar committee recommended rolling
out GST as suggested by the 12th Finance Commission.
After the fall of the BJP-led NDA government in 2004, and the election of a
Congressled UPA government, the new Finance Minister P Chidambaram in
February 2006 continued work on the same and proposed a GST rollout by 1
April 2010. However in 2010, with the Trinamool Congress routing CPI(M)
out of power in West Bengal, Asim Dasgupta resigned as the head of the GST
committee. Dasgupta admitted in an interview that 80% of the task had been
done.
In 2014, the NDA government was re-elected into power, this time under the
leadership of Narendra Modi. With the consequential dissolution of the 15th
Lok Sabha, the GST Bill approved by the standing committee for
reintroduction – lapsed. Seven months after the formation of the Modi
government, the new Finance Minister Arun Jaitley introduced the GST Bill in
the Lok Sabha, where the BJP had a majority. In February 2015, Jaitley set
another deadline of 1 April 2017 to implement GST. In May 2016, the Lok
Sabha passed the Constitution Amendment Bill, paving way for GST.
However, the Opposition, led by the Congress, demanded that the GST Bill be
again sent back to the Select Committee of the Rajya Sabha due to
disagreements on several statements in the Bill relating to taxation. Finally in
August 2016, the Amendment Bill was passed. Over the next 15 to 20 days, 18
states ratified the GST Bill and the
President Pranab Mukherjee gave his assent to it.
A 22-members select committee was formed to look into the proposed GST
laws. State and Union Territory GST laws were passed by all the states and
Union Territories of India except Jammu & Kashmir, paving the way for
smooth rollout of the tax from 1 July 2017. There was to be no GST on the sale
 and purchase of securities. That continues to be governed by Securities
Transaction Tax (STT).

ADVANTAGES OF GST
WHY DO WE NEED
GST

Despite the success of VAT,

there are still certain shortcomings in the structure of VAT, both at the Centre
and at the State level.

Justification at the Center Level

 At present excise duty paid on the raw material consumed is being
allowed as input credit only. For other taxes and duties paid for post-
manufacturing expenses, there is no mechanism for input credit under
the Central Excise Duty Act.
 Credit for service tax paid is being allowed manufacturer/ service
provider to a limited extent. In order to give the credit of service tax
paid in respect of services consumed, it is necessary that there should be
a comprehensive system under which both the goods and services are
covered.
 At present, the service tax is levied on restricted items only. Many other
large numbers of services could not be taxed. It is to reduce the effect of
cascading of taxes, which means levying tax on taxes.
Justification at the State Level

 A major defect under the State VAT is that the State is charging VAT
on the excise duty paid to the Central Government, which goes against
the principle of not levying tax on taxes.
 In the present State level VAT scheme, Cenvat allowed on the goods
remains included in the value of goods to be taxed which is a cascading
effect on account of Cenvat element.
 Many of the States are still continuing with various types of indirect
taxes, such as luxury tax, entertainment tax, etc.
 As tax is being levied on inter-state transfer of goods, there is no
provision for taking input credit on CST leading to additional burden on
the dealers.
WHAT ARE THE COMPONENTS OF GST?

There are 3 applicable taxes under GST: CGST, SGST & IGST.
CGST: Collected by the Central Government on an intra-state sale (Eg: Within
Karnataka)
SGST: Collected by the State Government on an intra-state sale (Eg: Within
Karnataka)
IGST: Collected by the Central Government for inter-state sale (Eg: Karnataka
to Tamil Nadu)
In most cases, the tax structure under the new regime will be as follows:

TRANSACTION NEW OLD REGIME

REGIME

SALE WITHIN STATE CGST+SGST VAT + Central Revenue will

Excise/Service be equally
Tax shared between
central and
state

Sale to another state IGST Central Sales Tax There will only
be one type of
+ Excise/Service tax (central) in
Tax case of interstate
sales. The Center
will
then share the
IGST revenue
based on the
destination of
goods.
Illustration:
A dealer in Maharashtra sells goods to a consumer in Maharashtra worth Rs.
10,000. The GST rate is 18% : comprising CGST of 9% and SGST of 9%.
In such cases, the dealer collects Rs. 1800 and of this amount, Rs. 900 will go
to the Central Government and Rs. 900 will go to the Maharashtra government.
Now, let us assume the dealer in Maharashtra had sold the goods to a dealer in
Gujarat worth Rs.10,000.
The GST rate is 18% comprising of only IGST. In such case, the dealer has to
charge Rs. 1800 as IGST. This IGST revenue will go to the Central
Government.

WHAT CHANGES DOES GST BRING IN?

Before GST, tax on tax was calculated and tax was paid by every purchaser
including the final consumer. The taxation on tax is called the Cascading Effect
of Taxes.
GST avoids this cascading effect as tax is calculated only on the value add. at
each transfer of ownership. Understand what the cascading effect is and how
GST helps by watching this simple video:
GST will improve the collection of taxes as well as boost the development of
Indian economy by removing the indirect tax barriers between states and
integrating the country through a uniform tax rate.

Illustration:
Say a shirt manufacturer pays Rs. 100 to buy raw materials. If the rate of taxes
is set at 10%, and there is no profit or loss involved, then he has to pay Rs. 10
as tax. So, the final cost of the shirt now becomes Rs (100+10=) 110.
At the next stage, the wholesaler buys the shirt from the manufacturer at Rs. 110, and
adds labels to it. When he is adding labels, he is adding value. Therefore, his cost
increases by say Rs. 40.
On top of this, he has to pay a 10% tax, and the final cost therefore becomes Rs.
(110+40=) 150 + 10% tax = Rs. 165.

Now, the retailer pays Rs. 165 to buy the shirt from the wholesaler because the
tax liability had passed on to him. He has to package the shirt, and when he
does that, he is adding value again.
This time, let’s say his value add is Rs. 30. Now when he sells the shirt, he adds
this value (plus the VAT he has to pay the government) to the final cost. So,
the cost of the shirt becomes Rs. 214.5 Let us see a breakup for this:
Cost = Rs. 165 + Value add = Rs. 30 + 10% tax = Rs. 195 + Rs. 19.5 = Rs.
214.5
So, the customer pays Rs. 214.5 for a shirt the cost price of which was basically
only Rs. 170 (Rs 110 + Rs. 40 + Rs. 30). Along the way the tax liability was
passed on at every stage of transaction and the final liability comes to rest with
the customer. This is called the Cascading Effect of Taxes where a tax is paid
on tax and the value of the item keeps increasing every time this happens.
PROBLEMS IN IMPLEMENTATION OF GST

Vat or sales tax is levied and collected by the state government. Different state
government charge different rate of taxes on different kind of goods traded
within their respective territorial limits under the extreme power provided to
the state under state list of the Constitution. Whereas CST central sales tax is
levied by the central government and collected by the state government as per
the concurrent list of the Constitution. Same the EXCISE duty as per central
excise act 1944 and service tax as per finance act 1994 is levied and collected
by the central government through the extreme power provided under the union
list of the Constitution.

Due to this distribution of power under the Constitution, no state government

wants to losses the revenue source called VAT or Sales tax. GST is the subject
matter of union list and no state agrees to bifurcate their income to the central
government but now as the same political party is in majority in the state and
central. All state government agreed to the proposal, as a result, GST Rollout.
 RESEARCH METHODOLOGY

For every comprehensive research a proper research methodology is

indispensable & it has to be properly conceived. The methodology adopted by
me is as follows.

RESEARCH PROBLEM
IMPACT OF GST ON COMMON MAN.

RESEARCH DESIGN
According to Clifford Woody, "research comprises defining and redefining
problems, formulating hypothesis or suggested solutions; collecting, organizing
and evaluating data; making deductions and reaching conclusions; and at last,
carefully testing the conclusions to determine whether they fit the formulating
hypothesis.
This research is divided in two parts: Primary Data And Secondary Data.
secondary data based on certain parameters; an exploratory research based on a
survey of the concerning literature. A sample survey was conducting got the
questionnaires filled from the respondents.

SOURCES OF DATA
There are two types of data viz. primary and secondary. The primary data are
those which are collected afresh and for the first time, and thus happen to be
original in character. The secondary data, on the other hand, are those which
have already been collected by someone else and which have already been
passed through the statistical process For this research report, primary data was
collected through questionnaires from students, businessman, investors,
teachers and serviceman. Secondary information is also obtained by the
medium of internet, books and the journals of various Management schools and
the government web portals.

SELECTION OF THE SAMPLE: -Convenience sampling is used

SAMPLE SIZE: -In sample size I have taken 47 samples as sample size.

OBJECTIVE OF STUDY

 To furnish the information of Goods and Services Tax on the Common

MAN.
 To find out the benefits of GST for the Common MAN.
 To Study the impact of GST on budget of the Common MAN.
 To find out what are challenges in GST for Common MAN.
 To study the Current scenario of impact of GST on common MAN.

LIMITATION OF STUDY

The following are the study's principal limitations:

1. The study is limit up to Bhiwandi City only.
2. The impact of GST on the average person was underlined in the
current research.
3. The research goes beyond time series.
4. Possibility of error in data collection because many respondent may have
not given actual answer of the questionnaire.
 LITERATURE REVIEW

The Maurya dynasty's rule in India is supported by Kautilya's

Arthashastra, which documents the history of indirect taxes in that country.
Agriculture-related goods were used as a means of tax collection throughout
that time. These collections were typically formed to advance a state or achieve
a certain goal. Taxes called as "Lagaan" were also levied to cover unforeseen
events like famine, food, war, etc. Once more, over time, the structure and
complexity of the tax system have grown. During the time of British rule, raw
materials were mostly exported from India and later imported as finished goods
and consumables.

In order to have a considerable advantage through value addition,

the British authorities at the time used to oppose manufacturing any finished
items in India. The Indian market was therefore overrun by British goods.
India-made goods were considerably less expensive in comparison to British
imports. British then considered levying tariffs on goods produced in India.
Excise duty, which was levied on items like salt, sugar, and motor spirit at the
start of the 20th century, marks the beginning of the modern era of indirect
taxation. Following then, the excise duty base gradually increased.

The Central Excise Act was created in 1944, and until 1969, it
underwent incremental alteration year after year. The Bhoothalingam
Committee had suggested the implementation of general excise tax in India at
the beginning of 1960, with a levy of 10% duty on all commodities
manufactured in India. But, the government rejected the suggestion. The
Bombay Tobacco (Amendment) Act, 1938, which went into force on March
24, 1938, was the first law to impose a charge on tobacco sales within a very
small number of urban and suburban
districts in Mumbai (then known as Bombay). After that, more indirect taxes
were introduced to the taxation system at both the state and federal levels, and
prior to the implementation of the Goods and Services Tax, India had about 20
indirect taxes (GST).

 This essay will focus on Dr. R. Vasanthagopal's assessment of the

GST's potential benefits for the economy, housing, employment, poverty
reduction, manufacturing industry, EXIM trade, GDP, and other
development areas including agriculture and manufacturing. Recognizing
several beneficial effects of the mentioned area, he comes to the
conclusion that the GST would be a significant improvement to the
indirect taxation system and would also give India's economic change a
new impetus, provided that the GST is neutral and rationally designed,
that competing interests of various stakeholders are balanced, and that
there is full political support for a fundamental tax reform that includes a
constitutional amendment.

 Dr. Barnamali Nath researched the GST concept and the timeframe for
its introduction in India on February 19, 2017, to learn more about its
advantages and potential effects on the Indian economy. According to the
conclusions he reached from his research, the GST will lessen the
cascading effect of the current indirect taxation system, which will
benefit producers and consumers by absorbing a number of indirect
taxes. He continued by saying that the introduction of the GST would
make it simple for manufacturers, wholesalers, and retailers to recoup
input taxes in the form of tax credits. The same adoption would also
result in commercial benefits, more employment opportunities, and
ultimately economic growth that would raise the nation's GDP.
 In her article "An Overview of the Goods and Services Tax" viewpoint
on the matter. GST has not yet gone into effect, but it will change once it
does. Also, even while answers to a number of pressing questions
affecting the business are still pending, the benefit to the economy is
indisputable.
 Hooper and Smith (1997) researched GST is actually collected at
various stages of the production process. Accordingly, there is output tax,
a GST tax charges by the suppliers on taxable goods and services and
input tax, a tax incurred by businesses on goods and services purchases.
It is noted that GST is not a cost to the sellers and would not appear in
financial statements as expenditure. Recently, the government initiative
to introduce Goods and Services Tax (GST) has been a growing topic of
interest in Malaysia. Despite the increasing popularity and success of
GST implementation around the world (Hooper & Smith, 1997),
Malaysian citizens are not entirely convinced with this new tax scheme.
There are debates mainly centred on the advantages and disadvantages
derived from the new tax initiative.

 As per as India is concerned Agogo Mawuli (May 2014) studied: -

“Goods and Service Tax an Appraisal” and found that GST is not good
for low-income countries and does not provide broad based growth to
poor countries. If still these countries want to implement GST then the
rate of GST should be less than 10% for growth.

 Ehtisham Ahmed and Satya Poddar (2009) studied: -

“Goods and Service Tax Reforms and Intergovernmental Consideration
in India” and found that GST introduction will provide simple and
transparent tax system with increase in output and productivity of
economy in India. But the benefits of GST are critically dependent on
rational design of GST.
 IMPACT OF GST ON THE COMMON MAN

The bulk of MAN in India is from the lower and middle classes,
where they either work in the service sector or rely on agriculture for their
living. MAN are of "Roti, Kapda, and Makaan" groups . Hence, the most
crucial query is how the GST's introduction will affect them. Clearly, the new
Goods and Service Tax (GST) regime raises many issues in the minds of the
average person. Is there anything new for them, or is it just the same material
packaged differently? Will it result in higher prices for them for products and
services? Are there any tax relief measures under the new tax laws?

When the costs of their necessities change, that is when an

economy actually has an effect on the common person or the general public.
For them, a healthy economy is one in which prices for frequently purchased
products and services decline. The public, on the other hand, becomes
dissatisfied with the changes made by the government when inflation is higher.
Consequently, it is crucial for public contentment to exist prior to the
implementation of any government program because, without it, the policy will
not be as successful as intended.

According to reports, the Goods and Service Tax (GST) is

India's largest tax reform. It aims to increase compliance, boost government
revenue, simplify the tax system by combining taxes at the central and local
levels, and create a level playing field for all producers, wholesalers, service
providers, and traders. The GST council had decided the rates for all the key
goods and services categories under the various tax slabs after much
consideration, and it is anticipated to fill the gaps in the current system and
strengthen the Indian economy. the Indian government will change five
significant laws that affect the daily lives of most Indians. The pricing changes
affect LPG cylinders, new ATM
cash withdrawal fees, deposits and withdrawals at India Post Payments Bank
(IPPB), cash transactions, and ICICI bank services. Following the
implementation of GST, there is a single tax provision throughout the supply
chain where each person is able to utilize the tax benefits of all the taxes that he
has already paid, ultimately resulting in lower pricing. Also, he learned the
exact value of his items as well as the amount of tax he had paid on them. As
GST has stronger tax administration capabilities, it is impossible to manipulate
taxes.

When the costs of their necessities change, the general public

feels the effects of an economy. The economy is excellent for the general
public when prices for the daily goods and services that are consumed are
cheap; however, if the inflation rate is higher, the general public becomes
dissatisfied with the changes made by the government.

GST implementation had an impact on customers in both

positive and negative ways. First and foremost, GST's beneficial effects is that,
in contrast to VAT, it has virtually eliminated the cascading effect of tax. As a
result, the end consumer was not burdened by the accumulation of taxes under
the GST because there was no tax on tax. Because the tax was only assessed on
the value added at every stage, it ultimately decreased corporate expenses.
Second, a uniform tax rate is set across the nation under the GST. As a result,
the cost of goods and services will be the same across India. Finally, the GST
has lowered the cost of a variety of necessities since the majority of them are
now tax-free or fall under a lower tax bracket.

The implementation of GST also had some detrimental

repercussions. First, the GST's implementation had raised the cost of eating
out, which is one of its negative effects. Second, the sellers began to implement
anti-profiteering procedures, preventing the consumers from receiving the true
benefits of the GST. So, the GST's benefits are not being distributed to
consumers. That is, when compared to the previous tax system, the benefits of
a reduced GST rate on a good or service are not actually passed on to the
consumer; instead, the seller raises his profit margin to make up for the lower
GST rate, which causes the prices of goods to stay the same or occasionally
even increase. In addition, after the imposition of GST, the MRP of the
commodities remained unchanged. Consumers started paying more tax as soon
as GST went into effect. This was due to the fact that taxes were already
included in the MRP or maximum retail price. The MRP for stock items was
not altered when GST was implemented. In reality, it is impossible to change
the MRP of each shop's inventory. As a result, the GST was calculated using
the MRP's existing tax rate. Some goods saw a sharp spike in price. As MRP is
not changed, this trend is still present. In actuality, the cost of commodities has
only gone up, and inflation would be blamed if the issue were raised. Not a
single product had its MRP decreased due to the introduction of the GST.
Consumers were used as a scapegoat to protect corporations.
 IMPACT OF GST ON VARIOUS SECTORS

 Household Sector
Food items are subject to a GST tax rate of 0–5%, hence this has no immediate
effect on food costs. With a higher GST rate of 3% and no advantage from
input tax credits, cosmetic services like salon and beauty services are known to
get more expensive. Due to the Goods and Services Tax (GST) regime's
implementation, the price of everyday household items has increased because
the user, who is also the end user, cannot pass on the tax burden further.

 Automobile Sector
Car Industry: With the addition of GST, some car prices saw a sizable rate
reduction, while others saw an increase in price. The cost of several car models
was updated by numerous firms. With an additional cess ranging from 1% to
15%, the purchase of a car will now incur a 28% GST rate. Less than 1,500 cc
diesel engine vehicles will be subject to a 3% cess. Tiny gasoline engines under
1200 cc will be subject to a 1% cess. Large automobiles and SUVs with a
length of above 4 metres will be subject to a 28% GST as well as a 15% cess.
A 12% GST will be applied to electric vehicles, and a cess won't be charged.
Vehicles utilized as ambulances, three-wheelers, and other similar vehicles are
under 1200 cc will be subject to a 1% cess. Large automobiles and SUVs with
a length of above 4 metres will be subject to a 28% GST as well as a 15% cess.
A 12% GST will be applied to electric vehicles, and a cess won't be charged.
Vehicles utilized as ambulances, three-wheelers, and other similar vehicles are
exempt from cess.

 Footwear and apparel

Since the implementation of GST, the cost of footwear and apparel has fallen.
Today, there will be a 5% GST fee applied to all clothing and manufactured
goods priced below Rs 1,000 per piece. Whereas items such as clothing and
made-up items that cost more than Rs. 1,000 per piece will be subject to a 12%
GST rate.

 Taxi/Cab Services
If a consumer uses a taxi service for a ride that costs 100 rupees, the tax will
vary significantly. Formerly, the service tax was 6%, but under the GST, it is
now 5%, giving the customer a small savings.

 Air Travel
If a consumer purchases a domestic economy class airfare for INR 1,000 in
India, the tax rate varies in both circumstances. Prior to the implementation of
the GST, the domestic economy class was subject to a service tax of about 6%.
As a result,
there will be a small financial benefit. Speaking of the business class, the GST
tax rate was raised from 9% to 12%, resulting in a pricey tax case for the
business class.

 Jewellery
Following the implementation of the GST, the tax rate was raised by 1% to 3%.
Due to the 3% GST on gold plus the 5% making charges that the buyer must
now pay, investing in gold has become more expensive.

 Mobile Bills
The GST has made using a mobile phone more expensive. Due to a 3%
increase in the tax rate (from 15% to 18%), both pre-paid and post-paid users
now have to pay higher bills.

 Restaurants
If a consumer orders a meal for INR 1000, the restaurant charge will be
significantly reduced. The VAT rate in the previous tax system was 12.5%, and
the service tax rate was 6%, for a total of about 18.5%. While under the GST,
all stand-alone restaurants (whether AC or Non AC) were taxed at 5% without
the
benefit of ITC, which resulted in a decrease in the restaurant bill's cost.

POSITIVE IMPACT OF GST ON COMMON MAN

 A number of indirect taxes, including VAT, CST, Service Tax, CAD,

SAD, and Excise, were eliminated when the GST was introduced as a
unified tax structure.
 A tax system that is simpler than the previous tax system. But, it was not
as easy as it first appeared to be. See the disadvantages below for
additional information.
 The Goods and Services Tax, or GST, eliminates the tax-on-tax
cascading effect.
 Because of the lower manufacturing cost some products like cars,
FMCG, etc. will be a bit cheaper.
 This will help reduce the burden on the common man, who will have to
spend less money to buy the same goods/ services which were more
expensive earlier.
 Low prices will directly or indirectly increase demand/consumption of
goods.
 Increased demand will ultimately enhance supply. Therefore, this will
eventually increase the production of goods.
  Boost in production, in the long run, will increase job opportunities.
However, this can only happen when consumers actually get goods at
cheaper costs.
 This will curb the circulation of black money. It will only be possible
when the KACHA or Invalid Bill system, normally followed by traders
and shopkeepers will be checked.
 A unified tax system will reduce corruption which will directly or
indirectly affect the common man.
 Most importantly, experts expect to see a positive impact of GST on the
Indian economy in the long run.

Yet, this is only feasible if the GST's true benefits are distributed to the final
consumers. The seller's profit margin, among other things influences the final
price of the items. The final cost of things is not only based on GST. To
safeguard the interests of consumers, the GST Act includes a provision against
profiteering.

NEGATIVE IMPACT OF GST ON COMMON MAN

 Compliance burden: You have to submit GST and file the return on
time.
 Filing GST returns is not as easy as it sounds. You must appoint a tax
professional to manage it.
 The government is taking steps to make return filing easier and to keep
it simple. But, even then, it will take time to actually smoothen the entire
process from start to end.
 Large businesses with enough employees can handle the entire process
easier. But for small traders/merchants/service providers or individuals
who have just started their business or service, it is still complex.
 The higher service tax means increased cost of services, it will be added
in Common Person’s monthly expenses.
 To bear the cost of additional services, you will have to reset the budget
of the common man.
 Everyone including Businessmen and service providers is still exploring
and getting used to new laws. During this time dependence on tax
experts and professionals is increasing which results in a bit more
business expenses.
 The real implications of GST can be experienced after a certain period.
 GST or Goods and Services Tax is a consumption-based tax, Thus for
services, the place where the service is provided needs to be determined.
 For better compliance, proper invoicing and accounting are necessary.
However, there are various companies that are developing GST
accounting software.
 If the actual benefits are not passed on to the consumer and the seller
increases his profit margin, then the prices of the goods may also
increase.
 The rise in inflation can be observed initially, however, it may also
come down gradually.
 The rise in inflation can be observed initially, however, it may also
come down gradually.