THE CONTENT THAT HAS BEEN DRAWN AND GIVEN TO CHATGPT AND QUILBOT

ABSTRACT

India is a Tax driven economy. The Goods and Services Tax (GST), was implemented on
July 1, 2017, is regarded as a major taxation reform till date which was implemented in
India since independence in 1947. The primary objective behind development of GST is
to subsume all sorts of indirect taxes in India like Central Excise Tax, VAT/Sales Tax,
Service tax, etc. and implement one taxation system in India. The main motto of GST is
One Nation, One Tax, One Market. Ignorance of law is no excuse but is liable to panel
provisions and hence why it is important to learn much about GST. India is a centralized
democratic and therefore the GST will be implemented parallel by the central and state
governments as CGST and SGST respectively. It is one of the significant step towards the
development of the country. GST is the only indirect tax that directly affects all sectors
and sections of our economy. Once the GST system is applied their would be single tax
system which would record a significant development in comprehensive indirect taxation
reform. Under the GST system their would be only one rate applicable for both goods and
services. GST will create a business friendly environment, as prices will fall and it would
also control the inflation rates. Goods and Service tax is tax regime adopted by 160
countries over the globe in order to evade cascading of tax in the economy. A value-added
tax levied on mainly goods and services provided or sold for domestic or household
consumption is called Goods and Service Tax. This paper is an analysis of what the
impact of Goods and Services Tax will be on Indian Tax Scenario. The author stated the
brief description of the historical scenario of Indian taxation and its tax structure, it’s
background, silent features and the impact of GST on Economy, different sectors. The
study is exploratory in nature and Secondary Data which has been used for the present
study has been collected from different sources i.e. Journals, Periodicals, Newspapers &
different websites.
 CURRENT FRAMEWORK

Goods and Service Tax 08, 02, 04, 08, 11, 10

Concept Of Goods and Service Tax

GST or Goods and Services Tax is applicable on supply of goods and services. In previous
regime there are separate laws for separate levy like excise duty, customs duty, central sales tax,
value added tax etc. But in case of GST it is going to be a broad scheme which subsumes all the
laws. The tax compliance is going to be easy as all the laws are subsumed and only one GST law
to be implemented. The four GST slabs have been set at 5%, 12%, 18% and 28% for different
items or services. The integration of tax laws in GST is expected to reduce the tax burden on the
tax payer compared to previous system where the tax payer's burden is high. Previously the tax is
at two points i.e., when the product moves out of factory and other at the retail outlet. But GST is
to be levied at final destination of consumption and not at various points.

This brings transparency and corruption free tax administration.GST will bring uniform taxation
across the country and allow full tax credit from the procurement of inputs and capital goods
which can later be set off against GST output liability. Under the GST scheme, a person who was
liable to pay tax on his output, whether for provision of service or sale of goods, is entitled to get
input tax credit (ITC) on the tax paid on its inputs. Goods and Services Tax is basically
destination based consumption tax levied on goods and services. Simply, GST is a single tax on
the supply of goods and services, right from the manufacturer to the consumer. In the nutshell,
it’s a tax would be levied only on the value addition with transfer of input tax credit on the
subsequent stages of value addition which means that the final burden of tax shall be borne by
the final consumer of the goods or services.

This reform gives equal footing to the big enterprises as well as SMEs. The aim of GST is thus to
simplify tax hurdles for the entire economy. The Value Added Tax (VAT) at the Central and the
State level has been considered to be a major step - an important step forward in the globe of
indirect tax reforms in India. If the VAT is a major improvement over the pre-existing Central
excise duty at the national level and the sales tax system at the State level, then the Goods and
Services Tax (GST) will indeed be an additional important perfection - the next logical step
towards a widespread indirect tax reforms in the country. It is called as value added tax because
at every stage, tax is being paid on the value addition. The Goods and Services Tax is a
combination of two words “Goods” & “Services”. Where Goods means every kind of movable
property other than money and securities but includes actionable claim, growing crops, grass and
things attached to or forming part of the land which are agreed to be severed before supply or
under a contract of supply {Sec. 2(52)} and Services means anything other than goods, money
and securities but includes activities relating to the use of money or its conversion by cash or by
any other mode, from one form, currency or denomination, to another form, currency or
denomination for which a separate consideration is charged {Sec. 2(102)}.

Who will have to pay GST?

GST will be paid by all manufacturers and sellers. It will also be paid by service providers such
as telecom providers, consultants, chartered accountants etc. However, being an indirect tax,
GST will be ultimately borne by the end consumers, just like in the current process

What kind of GST will be implemented in India?

India will implement the Canadian model of Dual GST, i.e., both the Centre and State will
collect GST. GST is a destination based tax system GST is very comprehensive indirect taxation
system on goods manufactured and services provided. It is one of the biggest tax reform in
country. Clause 366(12A) of the Constitution Bill defines GST as goods and services tax means
any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor
for human consumption. Further the clause 366(26A) of the Bill defines Services means anything
other than Goods. Thus it can be said that GST is a comprehensive tax levy on manufacture, sale
and consumption of goods and services at a national level. The proposed tax will be levied on all
transactions involving supply of goods and services, except those which are kept out of its
purview.
05

Final Tax rates under GST

The GST council has finalized a five-rate tax structure on 3rd November, 2016 moving a step
ahead in developing the dream to make India a single market from 1st July, 2017. These final
GST slab rates are as follows:

GST Council has specified multi-tier tax structure of 0%, 5%, 12%, 18% and 28% as applicable
to different categories of goods and services. 7% items are exempted from GST, whereas, 14%
items have 5% GST tax slab and 17% items have 12% GST tax slab. Around 43% items have
18% GST slab rate and 19% items have 28% GST slab rates. The latest category list is as under:-
·

0 % or GST Rate Slab Exempted (No Tax): This category includes 7% of all goods and services.
Fresh fruits and vegetables, milk, curd, drawing, and coloring books, hotels and lodges with
tariffs below INR 1000, all kinds of salt, printed books, flour, besan, bread, kajal bangles,
jaggery, hulled cereal grains, natural honey,fresh meat, fish, chicken, eggs, bindi, sindoor,
buttermilk,stamps, judicial papers, newspapers, jute and handloom, and so on are examples of
these.

5% GST Rate Slab: This category includes 14% of all goods and services. Some examples
include clothing under INR 1000 and footwear under INR 500, packaged food items, cream,
skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk,
sabudana, cashew nut, cashew nut in shell, raisin, ice, fish filet, kerosene, coal, medicine,
agarbatti (incense sticks), postage or revenue stamps, fertilizers, etc.

12% GST Slab Rate: Edibles such as frozen meat products, butter, cheese, ghee, packaged dry
fruits, animal fat, sausages, fruit juices, namkeen, ketchup & sauces, ayurvedic medicines, all
diagnostic kits and reagents, cellphones, spoons, forks, tooth powder, umbrella, sewing machine,
spectacles, indoor games such as playing cards, chess board, carrom board, ludo, apparels above
INR 1000, This category includes 17% of all goods and services.
18% GST Slab Rate: This category includes 43% of all goods and services. Pasta, biscuits,
cornflakes, pastries and cakes, preserved vegetables, jams, soups, ice cream, mayonnaise, mixed
condiments and seasonings, mineral water, more than INR 500 footwear, camera, speakers,
monitors, printers, electrical transformer, optical fiber, tissues, sanitary napkins, notebooks, steel
products, headgear and its parts, aluminum foil, bamboo furniture, AC restaurants that serve
liquor, restaurants in five-star and luxury hotels, telecom services.

28% GST Rate Slab: This category includes 19% of all goods and services. The remaining
edibles, such as chewing gum, bidi, molasses, chocolate that does not contain cocoa, waffles and
wafers coated in chocolate, pan masala, aerated water, personal care items such as deodorants,
shaving creams, aftershave, hair shampoo, dye, sunscreen, paint, water heater, dishwasher,
weighing machine, washing machine, vacuum cleaner, automobiles, motorcycles, Five star hotel
stays, race club betting, private lottery and movie tickets above INR.
 IMPACT ON ECONOMY

Indian economy is getting more globalized over the past two decades. On bringing GST
into practice, there would be amalgamation of Central and State taxes into a single tax
payment. It would also enhance the position of India in both, domestic as well as
international market. It is likely to improve the country’s tax to GDP ratio and also inhibit
inflation. The positive and negative impacts are discussed here.03

Positive impacts on the economy

Implementation of a single National GST will have major beneficial impact on all stake
holders. The key highlights of major such impact is
Advantages of GST in India
i Elimination of Cascading Effect & Barrier Free Tax Structure- GST will eliminate
cascading (tax on tax / compounding tax) impact on the production and distribution cost
of goods and services. This reduced cost of goods and service leading to accelerated GDP
growth. GST without tax barriers will leads to economies of scale in manufacturing
industry and reduces the supply chain cost.
ii Reduced Production Cost- GST is expected to reduce the production cost by 15% to
20% in many of the products in view of full input tax credit which will have favorable
impact on the prices of product.
iii Increase in Tax Revenue

GST will widen the tax base and improve the tax compliance higher tax: GDP ratio. The Tax:
GDP ratio is expected to increase by 2% as per FRBM report (Fiscal Responsibility and Budget
Management). This works out to rupees 70,000 to 80,000 crores of additional annual revenue to
the central and state governments.

iv Leads to Sustainable Growth in the Economy

GST will remove the tax distortions from the economy. This will lead to sustainable higher
growth based on competitive strength of the country. Simple tax system will attract more
productive investment for growth.

v Optimization and Comparative Cost Advantage

GST will eliminate the Inter State tax by which it will leads to optimization of physical facilities
to the extent of full capacity. If the manufacturing is done at full capacity industry will be
benefited by comparative cost advantage.

vi Tax Governance

The GST would improve tax governance

vii Positive effects on export and BOP (Balance of Payment) level)

In proposed GST the exporter will get the full tax credit, the export units will be able to quote
better price for their products and services in comparison with present scenario. Increased export
will ultimately have positive effect on the BOP (Balance of Payment) of the country.

viii Leads to Unique price and removes inequalities between the markets

As GST will lead to imposition of same tax rate on the goods and services everywhere in the
country and by implementing same tax rate it will removes the inequalities between the market
which we can seen in the market at present because of the tax rate differentials.

ix Leads to reduced chance for tax evasion

Since the proposed GST will charges full tax on the each and every transfer, it’s difficult for the
firms to evade tax from the payment. E.g.: e-commerce firms can’t evade tax by operating
business from the place where tax rates are comparatively less.

x Leads to centralized where housing for manufacturers

In the present tax system if the dealer and the ware house are from different states, then the
dealer needs to pay a Central Sales Tax of about 2%.This will increases the price of the
commodity. Thus companies use to setup a warehouse in each state. In GST as the CST gets
eliminated, the centralized where housing can be availed by the manufacturers. 104 Introducing
GST and Its Impact on Indian Economy.

xi Makes the tax structure simple and reduces the compliances

Multiple taxes that currently exist will no longer remain in the picture. This will reduces the
compliances to be fulfilled as compared to present situation
xii Ease in starting new business

With the implementation of GST in India, the procedure for GST registration would be
centralized and standardized similar to service tax registration. Under GST regime, business
would no longer have to obtain multiple VAT registration as a single GST registration would be
applicable across India. The procedure for obtaining GST registration would also be
standardized, thereby improving the ease of starting a new business in India.

xiii Increase in the GDP and Standard of Living

Since it is expected that with the implementation of GST the price level will reduced in the
economy, it will results in increase in the consumption level and growth in GDP of the economy.
According to study by NCAER (National Council for Applied Economics and Research)
complete implementation of GST could lift GDP growth by 0.9-1.7%.

xiv Formalization of Manufacturing

Input credit is proposed to be allowed only if the details declared by a taxpayer matches with the
details declared by vendors in their returns.03

Negative side of GST

Price level of essential goods and services:The proposed GST may lead to increase the price of essential
products and services which are presently exempted from the taxation.

ii Negative effect on the real estate industry: As per the study undertaken by the Curtin University of
Technology, Perth in 2000, GST would negatively impact the real estate market as it would add up to 8%
to the cost of new homes and reduce demand by about 12%.

iii Negative effect on working capital: As the firms are supposed to make the payment of the tax on every
transfer the companies working capital requirement will shoots up by proportional to the purchase of
inputs for the value addition.

iv Emergence of transfer pricing issues: As the GST considers all the transaction for taxation purpose, this
procedure will increases the price of the transfer from one department to another for further process.

v Dual Control: There will be dual control on every business by Central and State Government. So
compliance cost will go up.03
SECTOR-WISE IMPACT OF GST IN INDIA

1. E-commerce E-commerce sector in India is making progress day by day and after
implementation of GST there is continuous growth in e-commerce sector's but seeing its long
term effect will be interesting because tax collection at source (TCS) mechanism is introduced by
GST law for ecompanies with which they are not too happy. Introduction of GST will increase
administrative cost of e-commerce companies because GST makes it necessary to collect tax
collection at source which disrupts the relation between buyer and seller. Current rate prevailing
in India for TCS is 1%.

2. PharmaTaking about overall impact of GST, pharma and healthcare industries is the most
benefitingsector. It will set a degree of performance for generic drug makers, it boost medical
tourism and also elucidate tax framework. So a major concern which will arise for pharma sector
is pricing tax structure. So this sector is expecting a tax relaxation as it will result in making
healthcare services affordable to all at easy rates. The healthcare sector remain exempted from
the GST and all the inputs of this sector will be taxed at the rate of 18% which will result in
increasing the operating cost of healthcare sector.

3. Telecommunication After implementation of GST prices of telecom sector will arrive down.
Through effectively managing the inventory and by strengthening their warehouse manufactures
will get the benefit of saving on cost. For handset manufacturer it will be more convenient to sell
their equipment because GST has revoke the requirement of setting state specific bodies and
transfer stocks as will add on saving the logistics costs.Tax rate under GST on this sector is 18%
which was 15% previously. With higher tax credit is unlikely to exceed 1% of the revenue.

4. Textile As we know textile industry generate large number of jobs for skilled and unskilled
workers in India. It also gives 10% in the total export, and it will continue to grow under GST
also. GST would affectsmall and medium enterprises through affecting the cotton and textile
industry because it formerly attracted zero central excise duty (optional). Expected rate is 15%
after GST which will have a reasonable impact on the industry. The impact will be neutral or a
little negative compared to other present system of taxation. But they will be benefited with
reduce cost of transportation, saving etc.
5. Real Estate In Indian economy real estate is a most essential sector, and it also has a huge role
in employment generation. We can't evaluate the impact of Goods and Service Tax on real estate
completely because it heavily depend on prevailing tax rates. This sector has brought a lot of
essential transparency and accountability to the industry; it is due to the implementation of GST.
Tax rate under GST on under-construction real estate projects will be 12% only and which is not
fixed at 18% because it will reduce land cost.

6. Agriculture Agriculture sector is the base of Indian economy as a large part of population
depends on agriculture and it also is also contributing a major part in Indian GDP it has 16% part
in overall GDP. Implementation of GST will resolve the major issue of agriculture sector which
is transportation of agriculture products. Implementation of Goods and Service Tax is a notch
towards building one national agricultural market on account of comprising all type of taxes on
marketing of agricultural products. Under GST tax rate is nil in seeds, 12% on tractors, 5% on
fertilizers and 12% is on fertilizers.

7. FMCG FMCG sector is another most essential sector and it is taking important benefit through
saving in logistics and transportation cost and Goods and Service Tax has also terminated the
requisite for various sales depots. Under FMCG, by and large tax burden would reduce. The
major relief would be in Soap and Hair oil segment.

8. Freelancers Freelancer is still a promising industry in India and the rules regulation related to
it also very uncertain yet. But due to the GST implementation it will become easy for freelancer
to file their taxes online and it is also easy to do. As previously they are taxed as service provider
but the new tax format brings lot of transparency and answerability in freelancers.

9. Automobiles Automobile industry is a biggest producing sector as it produces a huge number

of cars which is mostly used by the giant population of India. In the earlier tax structure, a
number of taxes laid on this sector, such as road tax, value added tax, sales tax, motor vehicle tax
etc. GST submerged the all taxes previously collected individually by government. There is a
decrease in tax burden on majority of manufactured goods after GST implementation. A view at
key components of manufacturing like automobile sector discloses that tax rate will be reduced
in automobile sector and main advantage would go to SUV segment.
10. Startups GST will fit well in Indian startup scene due to the increasing limit of registration;
tax credit on purchase etc. previously in India there was different VAT laws in different state
which create a lot of confusion to the companies which have PAN India presence. But after the
introduction of GST this problem is resolved as a uniform tax structure is followed all over the
country .07

A EFFECTONCONSUMERGOODSANDSERVICES

When it comes to consumer goods and services, the main concerns are food and the services
sector. For these, the GST brings goodandnotso goodnews.Thegoodnewsisthat food products are
charged 0%. The not so good news is thatservices in general are seeing an increase of 18% from
15%.

On the other hand, theimplementation of GST increases the tax on footwear and garments priced
at INR 500 from the previous 14.41% to 18% but those priced lower than INR 500 are taxed
lower at 5%. For ready-made garments, the rates are lowered to 12% from 18.16%. Mobile
services rates are slightly increased, though, because of the new 18% rate, from 15% before.
When it comes to direct-to-home and cable services, the new fixed rate of 18% can be
considered ageneralreductionascomparedtotheprevious10%-30%range and the additional service
tax of 15%.

B. EFFECT ON TRANSPORTATION

Under GST, cab and taxi rides are taxed lower, from 6% to 5%. For those who who travel by air,
GST is favorable as the tax rate is lowered to 5% for the economy class and 12% for
businessclass. Train fare, meanwhile, is mostlyunaffected as the change is minimal, from 4.5% to
5%. Those who travel by sleeper are not affected by the tax rate change but those who travel first
class are charged more.

C. EFFECT ON THE ENTERTAINMENT AND

HOSPITALITY INDUSTRIES
Amusement park rates increase with GST taking effect as the previous tax rate of 15% has been
raised to 28%. Movie tickets are similarly increasing as they are categorized under the 28% rate.
For hotels, no GST are to be charged for room rates priced lower than INR 1,000. However,
room rateshigher than INR 5,000 get a 28% tax rate. For 5-star hotel restaurants, the rate is 18%
for those that serve alcohol and 12% for those that don’t. Smaller hotels and restaurants are only
charged 5% if their annual turnover does not exceed INR 50 Lakh.

D. MAJOR PROPERTY OR ASSET ACQUISITIONS

GST reduces under-construction property costs as the tax rate is set at 18% but this can still be
lowered to an effective rate of 12% as the property builder can avail of input tax
credits.Ontheother hand,buyingacar(mostmodels)inIndia can become slightly less expensive as
the tax rate is fixed at 28% with an additional cess of either 1%, 3%, or 15% dependingon
whichsegment the car beingpurchased belongs. In contrast, investing in jewelry can become
slightly more expensivebecauseofthe3%(from2%in most statesofIndia) rateongold and
the5%charged onthecraftingofthejewelry.

E. EFFECTS ON FINANCIAL PRODUCTS AND

SERVICES

Indians who buy insurance policies, unfortunately, are seeingincreases

intheirpremiumswiththeimplementationof GST as the tax rates have been raised for general,
health, and life insurance. On the other hand, the tax rate change on mutual fund returns under
GST is mostly minimal. This is because the GST is charged on the mutual fund’s Total Expense
Ratio (TER). The rate is only 3% so the effect is going to be marginal.

Since they belong to the service industry, bankingservices and the services provided by other
financial service companies are subject to the 18% rate, which is higher thanthe previous 15%.
Debit cards, fund transfers, ATM withdrawals, cheque book or draft issuance, bills collections,
charges on cash handling, and more are affected. Even money sending services are affected.
Companies that provide money transfer services, nevertheless, are expected to try to be
competitive so it’s worth observing how they change their rates. It’s advisable to observe these
changes on sites like Moneytransfercomparison.com to find out which ones are trying to be
competitive and which ones are taking advantage of GST to justify higher than expected rate
increases.

F. EFFECTONSTARTUPS
The GST regime is believed to be good for the Indian startup sector as it carries with it tax credit
on purchases, a simple compliance model, increased limits for registration,and the abilityto
promote the free flow of goods and services. It takes away the complication and confusion of the
previous VAT laws, especially for those in the ecommerce industry. GST may stir inflation but
there’s the optimistic view that the undesirable effects will not last long, and will eventually be
offset by the positive impact of an improving economy.

G. EFFECTONINFLATION

Given the sampling of effects mentioned earlier, it can be said that GST is mostly viewed as an
inflationary measure. However, the Indian government believes otherwise.Hasmukh Adhia,
Revenue Secretary, says that consumer price inflation with GST implemented will go down by
2% by the end of 2017. Naturally, not many are convinced by this claim. The fact thatthe tax rate
on services has been raised to 18% from around 15% is already expected to raise inflation above
levels experienced before the institution of GST.

MS Mani, a senior director of Deloitte, in an interview with Forbes India, said that the
inflationaryeffect of GST will be temporary or short-term. This is because, according to Mani,
the rates have been kept close to the existing exciseduty and state tax rates. For Mani, the
exemption (0% rate) of consumer products for the masses and the higher (28%) taxes on those
consumed by the rich will keep inflation in check. This is expected to improve the flow of input
credit with GST in place.

H. EFFECTONECONOMICACTIVITY
It’s difficult and too early to evaluate whether or not GST has positively affected economic
activity. The Indian government,however,believesthattheyareontherighttrack 17

Contribution of GST Towards Economic Development:

An economy has to function in the ecosystem. We cannot separate the economy from an
ecosystem as the ecosystem provides factors of production such as land, labour, capital etc with
which economy has to function. Sustainable economic growth is managing the resources in such
a way that present human needs are fulfilled and resources are so efficiently utilized that they
don’t get deleted and remain available for future generations. The introduction of GST in India is
expected to provide much needed stimulant growth to the economy as it has transformed the base
of indirect tax structure towards free flow of Goods and services. It is expected to remove the
cascading effect of taxes. Further the benefit of GST to the economy can be removal of myriad
of taxes and less compliance and simplified tax policy as compared to earlier one. It will also
lead to fall in manufacturing cost of goods and services which will reduce the burden from
consumer’s head, lower the burden less a person has to spend money to buy the product. Due to
lower price of product the demand may increase leading to increased production indirectly to
meet the demand. Hence production of goods is also expected to increase. GST is an attempt to
normalize the taxes applied on various goods and services. This will cut off the cascading effect
of the taxes and in turn bring out a better place for the customers and suppliers. With GST
brought into place a uniform price shall be maintained throughout the country and most of the
food items are exempted under GST such as bread, buttermilk, milk, fresh fruits and vegetables
etc. thus ensuring the contribution towards zero hunger and moreover implementation of GST
has led to decline in prices of cotton textiles, wool, silk and synthetic fibres. Further on account
of increase in economic activity resulting in higher growth, new employment opportunities will
increase which will directly benefit the urban poor. Moreover, health sector and education sector
services are exempted from getting taxed under GST regime. These services contribute to basic
human needs the exemption for these services will enable the poor to have cheaper accessibility.
Thus GST may have direct impact on accomplishing sustainable development goals. Thus by
reducing price of goods consumed and exempting basic goods of daily consumption the GST
regime ensures to contribute towards economic growth of the country.11

GST's Expected Economic Benefits in India

 It eliminates the cascading impact of taxes, i.e. it eliminates tax on tax.

 Goods demand and consumption are expected to rise.
 VAT, CST, Service tax, CAD, SAD, and Excise are among the bundled indirect taxes
that have been eliminated.
 When compared to the present tax system, there will be less tax compliance and a
simpler tax policy.
 Manufacturing costs are reduced as a result of decreased taxation in the manufacturing
sector. As a result, consumer goods prices are expected to fall.
 Lower the burden on the ordinary man, i.e., the general public will have to spend less
 money to get the same expensive goods sooner. • More demand will lead to increased
supply. As a result, there will be an increase in the production of products. • Control
of black money circulation, as the system used by merchants and shops would be
subjected to obligatory scrutiny.
Long-term boost to the Indian economy
 ADVANTAGES, DISADVANTAGES, CHALLENGES, LIMITATIONS,BENEFITS
ECT….

Challenges

With respect to Tax Threshold: The threshold limit for turnover above which GST would be
levied will be one area which would have to be strictly looked at. First of all, the threshold limit
should not be so low to bother small scale traders and service providers. It also increases the
allocation of government resources for such a petty amount of revenue which may be much more
costly than the amount of revenue collected. The first impact of setting higher tax threshold
would naturally lead to less revenue to the government as the margin of tax base shrinks; second
it may have on such small and not so developed states which have set low threshold limit under
current VAT regime.

With respect to nature of taxes: The taxes that are generally included in GST would be excise
duty, countervailing duty, cess, service tax, and state level VATs among others. Interestingly,
there are numerous other states and union taxes that would be still out of GST.

With respect to number of enactments of statutes: There will two types of GST laws, one at a
centre level called ‘Central GST’ and the other one at the state level is ‘State GST’. As there
seems to have different tax rates for goods and services at the Central Level and at the State
Level, and further division based on necessary and other property based on the need, location,
geography and resources of each state.

With respect to Rates of taxation: It is true that a tax rate should be devised in accordance
with the state’s necessity of funds. Whenever states feel that they need to raise greater revenues
to fund the increased expenditure, then, ideally, they should have power to decide how to
increase the revenue.

With respect to tax management and Infrastructure: It depends on the states and the union
how they are going to make GST a simple one. Success of any tax reform policy or managerial
measures depends on the inherent simplifications of the system, which leads to the high
conformity with the administrative measures and policies. 02
Wall Street firm Goldman Sachs, in a note „India: Q and A on GST- Growth Impact Could Be
Muted‟, has put out estimates that show that the Modi government‟s model for the Goods and
Services Tax(GST) will not raise growth, will push up consumer prices inflation and may not
result in increased tax revenue collections There appears to be certain principle loopholes in the
GST model imposed by the union government which may be ineffective in delivering the desired
result.

1. The principle ideology behind implementation of GST-one country one tax is not suitable for
India. Previously there were 32 taxes which include service tax, excise duty, sale tax and 29 state
VAT taxes and after implementation of GST it comes to 31 taxes which include IGST, CGST and
29 SGST which again bear complicated tax structure in the country and rebuts the principle of
one country one tax.

2. Another principle ideology behind implementation of GST-one rate of tax is not possible in
India due to, According to the 101st amendment in the constitution, Article 246 A states that
parliament and legislative assembly can impose taxes on goods and services. Hence not only
union government but also state government had power to have own GST rate.Article 279 A of
the constitution states that GST council has only recommendatory powers, now it‟s up to state
government to levy its own GST rate and distorts the entire GST uniformity rate system of the
country

3. Government had incorporated goods and services tax network(GSTN), which is responsible
for developing GST portal to ensure services like GST registration, GST return filling, IGST
settlement, etc. which requires robust IT network. It is widely known that India is in an
embryonic stage as far as IT network connectivity is concerned.

4. Trained and skilled man power with updated GST subject knowledge are not easily available,
this had created an additional work load on professionals across industry.

5. The Indian insurance market is not so developed as less than 10% of the population has
insurance. This was the reason behind the government initiative „PradhanMantriJeevan Bema
Yojna‟ however with the implementation of GST insurance premiums have become expensive
by 300 basis points which will become difficult for insurance companies to penetrate the market
and would work as an unfavourable factor against insurance awareness schemes. The
government initiative „PradhanMantri Jan DhanYojna‟ initiated that every citizen of have a bank
account will face difficulties as the tax on financial services had raised by 3% in the new goods
and services tax regime.

6. The telecommunication sector assumes a serious problem as on the one hand the government
is initiating digital India and on the other hand telecom services is getting costlier as telecom
services will attract GST tax rate of 18% which is 3% higher than the previous service tax rate,
even when India‟s rural teledensity is not even 60%.

7. The GST administration intends to keep petroleum products out of the ambit of GST, being
petroleum products have been a major contributor of inflation in India.

8. Small traders are confused with the GST tax rate application and increasing cost of
operations, as they are unable to afford the cost of computer and accounting staff for
maintenance of record and filling of returns under GST. 06
 Opportunities

An end to cascading effects: This will be the major contribution of GST for the business and
commerce. At present, there are different state level and centre level indirect tax levies that are
compulsory one after another on the supply chain till the time of its utilization.

Growth of Revenue in States and Union: 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.

Reduces transaction costs and unnecessary wastages: If government works in an efficient

mode, it may be also possible that a single registration and single compliance will suffice for
both SGST and CGST provided government produces effective IT infrastructure and integration
of such infrastructure of states level with the union.

Eliminates the multiplicity of taxation: One of the great advantages that a taxpayer can expect
from GST is elimination of multiplicity of taxation. The reduction in the number of taxation
applicable in a chain of transaction will help to clean up the current messthat is brought by
existing indirect tax laws.

One Point Single Tax: Another feature that GST must hold is it should be ‘one point single
taxation’. This also gives a lot of comforts and confidence to business community that they
would focus on business rather than worrying about other taxation that may crop at later stage.

Reduces average tax burdens: Under GST mechanism, the cost of tax that consumers have to
bear will be certain, and GST would reduce the average tax burdens on the consumers.

Reduces the corruption: It is one of the major problems that India is overwhelmed with. We
cannot expect anything substantial unless there exists a political will to root it out. This will be a
step towards corruption free Indian Revenue Service.02
 Benefits of GST

1. GST provide comprehensive and wider coverage of input credit setoff, you can use service
tax credit for the payment of tax on sale of goods etc.

2. CST will be removed and need not pay. At present there is no input tax credit available for
CST.

3. Many indirect taxes in state and central level included by GST, You need to pay a single GST
instead of all.

4. Uniformity of tax rates across the states.

5. Ensure better compliance due to aggregate tax rate reduces.

6. By reducing the tax burden the competitiveness of Indian products in international market is
expected to increase and there by development of the nation.

7. Prices of goods are expected to reduce in the long run as the benefits of less tax burden would
be passed on to the consumer. 02

Experts have enlisted the benefits of GST as under:

It would introduce “one country one tax”

It would absorb all the indirect taxes at the central and state level thus eliminating the

cascading effect of tax It would bring down the prices of goods and services which in turn will
help the companies as consumption will increase

Higher threshold for registration which will exempts many small traders and service providers.

In the GST system, when all the taxes are integrated it would eliminate the number of
compliances like return filling

It would help to eliminate the separate tax imposition on goods and services which requires the
transaction to split its value among goods and services leading to greater complications
It would wider the tax regime by covering all the sectors including the unorganised sectors thus
widening the tax base. This would lead to better and more revenue collection by the
government.

GST would simplify the working procedures and would minimise the tax burden of E-commerce
and logistics companies

Employment generation for youths as GST trained experts 06

Manufacturers will get the benefit of tax credit, thus the tax burden on producer will be reduced
and it will foster growth through more productions.

Under GST structure no entry tax is charged for goods manufactured or sold in any part of India.
Thus as a result delivery of goods and services between two states can easily be made without
any check posts or toll plazas and goods of perishable nature can easily be transported reducing
the preservation or warehousing cost. According to an estimate by CRISIL, the logistics cost for
manufacturer of bulk goods will get reduced significantly about 20%. It is expected boost e-
commerce throughout the nation.

Introduction of GST has made taxation simple. The end consumer now knows exactly how
much tax is being charged to them and on what basis. It will increase the faith of the customers
towards tax structure of the country.

The tax credit phenomena in GST structure is expected to boost up producers to purchase raw
materials from different registered dealers and is hoped to bring up more vendors and suppliers
under the purview of taxation.

GST regime will increase the competitiveness of India in the global market as custom duties
applicable on exports is removed hence reducing the cost of transaction.

Ambiguity between goods and services has been removed , this will make various legal
proceedings in relation to gods and services as a result distinction between material and service
shall no longer exist which will reduce tax evasion.
Unlike earlier tax system under GST registration has been centralised which will make starting a
new enterprise much more easily and consequent expansion will be easy which is an added
advantage for SMEs. Further under GST exemption limit is 25 lakhs giving relief to over 60% of
small trades and dealers.

High inflationary impact would be on telecom, real estate, construction, air and road transport
etc.

Thus services would increase the consumers cost. Thus in the nutshell it could be said that GST
being a new concept in India may have some repercussions but its advantages cannot be ignored.
If we consider previous impacts of GST introduction and for time being ignore its few
disadvantages it seems that in long run the economy would be benefitted at its best by this major
tax reform.11

BENEFITS OF GST

GST will enable seamless credit across the entire supply chain and across all states using a
single tax base.

The implementation of a Goods and Services Tax would eliminate the cascading effects of taxes
on the production and distribution costs of goods and services.

Theelimination of cascading effects , i . e .tax on tax, will significantly improve the

competitiveness of original goods and services in the market, resulting in a positive impact on
the country's GDP growth.

Revenue will rise under the GST regime as the dealer base expands by capturing value addition
in the distributive trade and as compliance improves.

The GST regime is expected to increase transparency in the indirect tax framework while also
lowering the rate of inflation.
Exports will be zero-rated in their entirety under the GST regime, as opposed to the current
system, where refunds of some taxes are not permitted due to the fragmented nature of indirect
taxes between the Centre and the States.

All taxes paid on exported goods or services, or on inputs or input services used in the supply of
such export goods or services, will be refunded.

By eliminating rate arbitrage between neighboring states as well as that between intra and inter-
state sales, uniform GST rates will reduce the incentive for evasion. Harmonization of laws,
procedures and tax rates will make compliance easier and more straightforward.

Common procedures for taxpayer registration, tax refunds, uniform tax return formats, a
common tax base, a common system of classification of goods or services, and timelines for each
activity will provide greater certainty to the taxation system.

GST is heavily reliant on technology. The common portal will serve as the taxpayer's interface
with the tax authorities (GSTN). Various processes, such as registration, returns, refunds, tax
payments, and so on, will be simplified and automated. 07

IV. BENEFITS OF GST

The implication of GST assures a single taxation system in the entire country for all goods and
services making tax compliance easier and more effective. They are:-

To The Economy - It will simplify India's tax structure, broaden the tax base, and create a
common market across states. This will lead to increased compliance and increase India's tax-to-
gross domestic product ratio.

To The Corporate - It will be beneficial for India Inc. as the average tax burden on companies
will fall. Reducing production costs will make exporters more competitive

To The Exporters - The subsuming of major Central and State taxes in GST, complete and
comprehensive setoff of input goods and services and phasing out of Central Sales Tax (CST)
would reduce the cost of locally manufactured goods and services. This will increase the
competitiveness of Indian goods and services in the international market and give boost to Indian
exports.

To Industry - Manufacturing sector in India is one of the highly taxed sectors in the world. A
complex and high taxation structure has the tendency to render products uncompetitive in the
international market or consume large portions of the cost arbitrage available in manufacturing
set-ups in low cost economies such as India. GST when enforced would eliminate complexities
in the present taxation structure and consequently prevent the loss of nearly 50% of the
advantage of lower manufacturing costs that India has over the western nations. "A well-
designed GST is the most graceful method to get rid of distortions of the existing process of
multiple taxation" Sanjay Pant, Commissioner Service Tax, Bangalore.

To The Centre And State - Approximately $ 15 billion a year of profits are predicted by the
government with the implementation of GST as it is speculated to bring about raise in
employment, promotion of exports and consequently a significant boost in overall economic
growth. "The implementation of a comprehensive GST in India is expected to lead to efficient
allocation of factors of production thus leading to gains in GDP and exports. This would translate
into enhanced economic welfare and returns to the factors of production, viz. land, labour and
capital" Mr. Premnath Hegde H.N., Chartered Accountants, Premnath Hegde and Co. Another
positive aspect of this proposal is that it is aimed at equitable division of tax burden between the
manufacturing and services. "GST will be the biggest reform after 1991 and its implementation
alone would add 1.5-2 percentage point to India's GDP growth. It will provide a tremendous
stimulus and can solve several issues like inflation and fiscal deficit" - Mr. Adi Godrej Chairman
of the Godrej Group.

To The Individuals And Companies - With the collection of both the central and state taxes
proposed to be made at the point of sale , both components will be charged on the manufacturing
costs and the individual will benefit from lowered prices in the process which will subsequently
lead to increase in consumption thereby profiting companies. 10

BENEFITS OF GST
FOR BUSINESS AND INDUSTRY
Easy Compliance: A robust and comprehensive IT system would be the foundation of the GST regime in
India. Therefore, all tax payer services such as registrations, returns, payments, etc. would be available to
the taxpayers online, which would make compliance easy and transparent.
Uniformity of Tax Rates and Structures: GST will ensure that indirect tax rates and structures are
common across the country, thereby increasing certainty and ease of doing business. In other words, GST
would make doing business in the country tax neutral, irrespective of the choice of place of doing
business.
Removal of Cascading: A system of seamless tax-credits throughout the value-chain, and across
boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden
costs of doing business.
Improved Competitiveness: Reduction in transaction costs of doing business would eventually lead to an
improved competitiveness for the trade and industry.
Gain to Manufacturers and Exporters: The subsuming of major Central and State taxes in GST, complete
and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would
reduce the cost of locally manufactured goods and services. This will increase the competitiveness of
Indian goods and services in the international market and give boost to Indian exports. The uniformity in
tax rates and procedures across the country will also go a long way in reducing the compliance cost.
FOR CENTRAL AND STATE GOVERNMENTS
Simple and Easy to Administer: Multiple indirect taxes at the Central and State levels are being replaced
by GST. Backed with a robust end-to-end IT system, GST would be simpler and easier to administer than
all other indirect taxes of the Centre and State levied so far.
Better Controls on Leakage: GST will result in better tax compliance due to a robust IT infrastructure.
Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition,
there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
Higher Revenue Efficiency: GST is expected to decrease the cost of collection of tax revenues of the
Government, and will therefore, lead to higher revenue efficiency.
FOR THE CONSUMER
Single and transparent tax proportionate to the value of goods and services: Due to multiple indirect taxes
being levied by the Centre and State, with incomplete or no input tax credits available at progressive
stages of value addition, the cost of most goods and services in the country today are laden with many
hidden taxes. Under GST, there would be only one tax from the manufacturer to the consumer, leading to
transparency of taxes paid to the final consumer.
Relief in Overall Tax Burden: Because of efficiency gains and prevention of leakages, the overalltax
burden on most commodities will come down, which will benefit consumers. 20
Manufacturers will get the benefit of tax credit, thus the tax burden on producer will be reduced
and it will foster growth through more productions.

Under GST structure no entry tax is charged for goods manufactured or sold in any part of India.
Thus as a result delivery of goods and services between two states can easily be made without
any check posts or toll plazas and goods of perishable nature can easily be transported reducing
the preservation or warehousing cost. According to an estimate by CRISIL, the logistics cost for
manufacturer of bulk goods will get reduced significantly about 20%. It is expected boost e-
commerce throughout the nation.

Introduction of GST has made taxation simple. The end consumer now knows exactly how
much tax is being charged to them and on what basis. It will increase the faith of the customers
towards tax structure of the country.

The tax credit phenomena in GST structure is expected to boost up producers to purchase raw
materials from different registered dealers and is hoped to bring up more vendors and suppliers
under the purview of taxation.

GST regime will increase the competitiveness of India in the global market as custom duties
applicable on exports is removed hence reducing the cost of transaction.

Ambiguity between goods and services has been removed , this will make various legal
proceedings in relation to gods and services as a result distinction between material and service
shall no longer exist which will reduce tax evasion.

Unlike earlier tax system under GST registration has been centralised which will make starting a
new enterprise much more easily and consequent expansion will be easy which is an added
advantage for SMEs. Further under GST exemption limit is 25 lakhs giving relief to over 60% of
small trades and dealers.

High inflationary impact would be on telecom, real estate, construction, air and road transport
etc.

Thus services would increase the consumers cost. Thus in the nutshell it could be said that GST
being a new concept in India may have some repercussions but its advantages cannot be ignored.
If we consider previous impacts of GST introduction and for time being ignore its few
disadvantages it seems that in long run the economy would be benefitted at its best by this major
tax reform.
 Advantages of GST:

1. GST is structured to simplify the current indirect system by removing multiple taxes. It creates
India as a single market.

2. It taxes goods and services at the same rates so many disputes are eliminated on tax matter. 3.
GST will be levied only at the final destination of consumption based on VAT principle and not
at various points (from manufacturing to retail outlets). This will help in removing economic
distortions and bring about development of a common national market.

4. The procedural cost is reduced due to uniform accounting namely, CGST, SGST, IGST have to
be maintained for all types of taxes.

5. The reduced tax burden on companies will reduce production cost making exporters more
competitive at national and international level.

6. More business entities including unorganized will come under the tax system thus widening
the tax base. This may lead to better and more tax revenue collections.

7. Many businesses create depots and go downs in different states simply because there is a
difference in tax rates. Now that GST will come, this difference between states will vanish. It
would help to remove the tax difference as a bias, thereby helping businesses.04

GST Advantages

The Goods and Services Tax (GST) replaced the Value Added Tax (VAT) system. It
is a tax on products and services manufactured, consumed, and sold in India. It replaced or
consolidated all indirect taxes levied on products and services by the federal government and
state governments. The Goods and Services Tax (GST) prioritises long-term gains. This new
system has benefited a wide range of industries. The following are some of the benefits of the
Goods and Services Tax (GST): -
1. This method aided in the reduction of tax evasion.
2. Control over the circulation of black money
3. Due to a lower burden of taxes, there is a reduction in overall costs.

Goods and Services Tax (GST) merged all the indirect taxes into one. This made the
tax system easier and simpler for all service and business.
 4. The Goods and Services Levy (GST) consolidated all indirect taxes into a single tax.
For every service and business, this made the tax system easier and simpler.
5. The Goods and Services Tax (GST) decreases non-receipted sales and lowers the
incidence of corruption.
6. Not only removal of cascading tax effect, i.e. tax on tax but also Increase in the
production of goods and services
7. Expected to increase the revenue of the government.
8. The burden has been decreased on the final taxpayer, i.e. Consumer at the end.
9. Removal of multiple taxations. 13

Dis-advantages of GST in India

1. There will be dual control on every business by Central and State Government. So compliance
cost will go up.

2. All credit will be available on from online connectivity with GST Network. Hence, small
businesses may find it difficult to use the system

3. VAT and service tax on some products may become higher than the current levels.

4. States may lose autonomy to change their tax rates.

5. Manufacturing states would lose big revenue

6. Service sector may oppose because they have to register in every state with central and state
government. So every business at all India level will have around 60 registrations while they are
having just one today. Moreover their rates will also go up.

7. Retail business may oppose because their taxes will go up and they will also have to deal with
Central Government now in addition to States.

8. GSTN may not work optimally for quite some time.04

i Price level of essential goods and services - The proposed GST may lead to increase the price
of essential products and services which are presently exempted from the taxation.
ii Negative effect on the real estate industry - As per the study undertaken by the Curtin
University of Technology, Perth in 2000, GST would negatively impact the real estate market as
it would add up to 8% to the cost of new homes and reduce demand by about 12%.

iii Negative effect on working capital - As the firms are supposed to make the payment of the tax
on every transfer the companies working capital requirement will shoots up by proportional to
the purchase of inputs for the value addition.

iv Emergence of transfer pricing issues - As the GST considers all the transaction for taxation
purpose, this procedure will increases the price of the transfer from one department to another for
further process.

v Dual Control - There will be dual control on every business by Central and State Government.
So compliance cost will go up.03

GST Negative Effects

The Goods and Services Tax (GST) replaced the Value Added Tax (VAT) system. It
is a tax on products and services manufactured, consumed, and sold in India. It replaced or
consolidated all indirect taxes levied on products and services by the federal government and
state governments. The Goods and Services Tax (GST) prioritises long-term gains. Working
hard for the future has its disadvantages as well. The following are some of the drawbacks of
the Goods and Services Tax (GST):-
1. The Goods and Services Tax (GST) has increased the cost of transactional fees
between banking institutions. Transaction costs have been raised from 15% to 18%.
2. The Goods and Services Tax (GST) has increased the cost of insurance premiums.
3. It has had an adverse effect on the real estate market. Because of the Goods and
Services Tax (GST) (GST). The price of real estate has increased from 8% to 12%. It is
anticipated, however, that it will not endure in the long run.
4. Because the Goods and Services Tax (GST) excludes fuel, the price of petrol
constantly deviates from the principles of commodity unification.
5. The Goods and Services Tax (GST) has progressed to a more complicated structure for
company owners.
6. Prior to the Goods and Services Levy (GST), only a few retail items were subject to a
 tax of up to 4%. However, the Goods and Services Tax (GST) has increased the cost of
clothing and garments.
7. The Goods and Services Tax (GST) has an impact on the aviation industry. Prior to the
introduction of the Goods and Services Tax (GST), the service tax on airline tickets
ranged from 6% to 9%. However, they have already been surpassed, with tax rates
ranging up to
 15%, almost twice the rate set by the government before.
8. There was no change in the tax system with the introduction of the Central Goods and
Services Tax (CGST) and State Goods and Services Tax (SGST), which replaced the
Service Tax or Central Excise, Value Added Tax (VAT), and Central Sales Tax (CST).
There are still numerous levels to the tax structure. 13

SUGGESTIONS:

Filing 37 returns per GSTIN is very time consuming and costly matter, where in every one may
not have the resources to meet up the compliance. So processes must be simplified.

Reverse charge payable by registered dealers in case of purchase from non registered dealer
shall be completely withdrawn.

An intense and deep training is needed to make the work force entirely capable of handling the
new tax regime. Moreover workshops and conferences may add up to increase the knowledge
about GST.

Concept of input tax credit requires a large volume of data to be matched between supplier and
receiver. These processes shall be simplified.

Rates shall be rationalized and unified to make India competitive and in interest of economic
development of the country and reduce complications.

GST should not lead to regional imbalance in items of resources and responsibility among
governments. A due care of it shall be taken.

A proper monitoring system shall be constructed to manage unreal registrations and refunds
filed as these are the areas where loopholes invisibly exist.11

Procedure of filing GST return should be made simple and number of GST forms should be less or a simple
one-page form should be there to file the returns.
 Controversial issues of GST should be resolved so that businessmen may not be confused about tax rate,
GST form etc. and may file their return very easily.
Automatic tax calculation procedure should be there in IT software of GSTN so that taxpayer may not
confuse about amount of tax.
GST slabs should be reduced to one or two.
Petroleum products should be brought under GST as this time petrol and diesel rate is all time high of
Rs. 74 and Rs. 68 respectively that is increasing inflation and unrest among public.
No state should be allowed to levy local/state tax on GST goods on the name of revenue loss as central
government is already compensating the loss for first 5 years.
All GST forms should be designed and uploaded on GSTN portal as soon as possible and should be
designed so easy to fill that businessmen may fill them at their own and should not require to roam about
tax professionals to file their GST. 16

GST will Improve Ease of Starting a Business in India:

While starting a new business in India, businesses currently have to get VAT registration from
the State’s Sales Tax department. Since, each State has different procedures and fees for VAT
registration, it is hard for businesses operating in multiple States to obtain and maintain
compliance with VAT regulations. With the implementation of GST in India, the procedure for
GST registration would be centralized and standardized similar to service tax registration. Under
GST regime, business would no longer have to obtain multiple VAT registration – as a single
GST registration would be applicable across India. The procedure for obtaining GST registration
would also be standardized, thereby improving the ease of starting a new business in India.
Integration of Multiple Taxes in GST Currently goods and products are taxed under the VAT
regime implemented by State Government and services are taxed under the service tax regimen
implemented by the Central Government. As VAT is implemented by State Governments, each of
the State has different VAT rates, VAT regulations and VAT procedures – leading to
complications. Further, in addition to VAT and Service Tax, there are various other tax
regulations that businesses must comply with like Central Sales Tax (CST), Additional Customs
Duty, Purchase Tax, Luxury Tax, etc.,04
5. FINDINGS AND DISCUSSIONS
The key findings of the present study are reported below.
GST is one of the biggest indirect tax reforms in India

. The major reason for such a transformation is to eradicate the cascading effects of tax and to boost the
tax base of Central Government.

It is probably the best tax structure implemented in India since independence and it is expected to
promote impartial tax structure throughout the nation as a whole.

GST is a comprehensive taxation system that subsumes all indirect taxes of states and central regimes
and cumulated economy into a flawless national market. But, it fails to follow the principle of diversity.
As GST replaces all the indirect taxes, these will reduce the government existing revenue and it tends to
increase the rates of other direct taxes and even the prices of other goods too which in turn will raise the
burden of the people.

It will provide India a world-class and a smart tax system for its simplicity and transparency.

It will lead to better tax administration and control, which in turn will reduce tax evasion practice
thereby, enhance the indirect tax revenue of the Government.

GST is based on the concept of “One Nation and One Tax” hence it will reduce complexities and will
improve the transparency in the present taxation system.

Moreover, it is expected to provide a sigh of relief to industry, trade, agriculture, and consumers because
of its comprehensive and wider coverage of input tax set-off and service tax set-off.

The tax burden for the customers and cost of compliances for the dealers are expected to be reduced.

Dual model of GST will widen the Central Government’s tax base through the levy of central taxes both
on goods and services.

GST will make India industry-friendly and it will help in attracting more foreign investments. Thereby,
will generate more employment opportunities in the near future. GST will play a dynamic role towards
the growth and development of our country.

It will help to foster country’s economic growth rate, keep up sound and stable price level, and promote
export but its implementation should be backed by strong IT infrastructure.

Indian products would become more competitive in the domestic as well as in the international markets
and thereby, lead to growth in India’s real GDP.

Especially, sectors like FMCG, Pharmaceuticals, Automobile, Infrastructure, Textile, IT, Agriculture,
Food Industry, Transport, Real estate industry, media & entertainment industry will be benefitted from it
whilst, hospitality, alcoholic products as well as e-commerce sector will suffer due to its implementation.

Finally, it is expected that this new indirect taxation reform will elevate overall Indian welfare as well as
the welfare of all Indian states in the long run.18