SGPC’s

Guru Nanak Institute of Management Studies

(Management Institute of G N Khalsa College), Matunga east, Mumbai – 400 019

General Project Report

Titled
“Impact of GST on Indian Economy”
In the partial fulfillment of the Degree of
MMS
By
Mr. Vinayak Subhash Padave
[Class-MMS, Division-B & Roll No-99]
Semester IV & Specialization: Finance
Batch: 2022-24

Under the Guidance of

Prof. Samidha Angne
(Project Guide)
 SGPC’s
Guru Nanak Institute of Management Studies
(Management Institute of G N Khalsa College), Matunga east, Mumbai – 400 019

CERTIFICATE

This is to certify that Mr. Vinayak Subhash Padave a student of Class: MMS
Semester: IV bearing Roll No. 99 has successfully completed the project titled,
“Impact of GST on Indian Economy”, in the partial fulfillment of the Degree of
MMS.

Place: Matunga, Mumbai

Date:

Name of the Project Guide: Prof. Samidha Angne

Signature of the Project Guide:

Signature Institutes Seal:

(Dr. Satwinder Singh Bedi)

Director

STUDENT DECLARATION
I hereby declare that the project titled “Impact of GST on Indian Economy” is
my own work conducted under the supervision of Prof. Samidha Angne.

I further declare that no part in this project work has been plagiarized without
proper citations and has not formed the basis for the award of any degree,
diploma, associate ship, fellowship previously.

Name of Student:

Signature of the Student:

 ACKNOWLEDGEMENT

I avail this opportunity to express my sincere, humble and deepest sense of

gratitude towards my Guide Prof. Samidha Angne for his valuable guidance and

tremendous efforts which she has taken to guide me to the path of success. Her

constructive feedback and endless encouragement always inspired to work hard

on the topic. Her determination and ambition to achieve goal in life is really

fascinating and inspired me. I wish to thank my friends for their suggestion and

co-operation in completion of this project. No one can successfully complete

work without blessings and wishes, so we thank and dedicate it to our loving

parents for their love and inspiration. Above all by grace of god we would

achieve it successfully.

Name of student
 TABLE OF CONTENTS

Sr
Title Page No.
No.

1 Executive Summary 1-2

2 Introduction of GST 3-18

3 Introduction of Indian Economy 19-23

4 Literature Review 24-26

5 Research Methodology 27-29

6 Data Analysis 30-57

7 Findings 58-60

8 Conclusion 61-62

9 Bibliography 63-64

10 Project Progress Report Duly Filled & Signed 65

11 Approved Project Synopsis 66

LIST OF GRAPHS
Sr No. Title Page No.

1 Do you now /aware about GST? 31

2 Dose you affected by GST? 31

3 What you think , life get simpler due to GST? 32

4 Impact of GST on yourlife? 32

5 What you think , to follow GST is difficult task ? 33

What you think GST has more positive effect than

6 negative? 33

7 Impact of GST on GDP 34

8 What you think about process to file return of GST? 34

What you think about impact of GST on indian

9 economy? 35

10 Give rating to GST out of 5 star. 35

Executive Summary

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1.1 Executive Summary:
The Goods and Services Tax (GST) is a significant indirect tax reform in India,
aimed at propelling economic growth by replacing the intricate and multi-
layered taxation regime with a simpler, transparent, and tech-driven
administration. The implementation of GST has been successful in removing
impediments to inter-state trade, projecting India as a common market, and
realizing the vision of "one nation, one tax, and one market". It has also been
effective in unifying the Indian market, simplifying compliance procedures, and
enhancing the tax base.

GST has been beneficial in expanding the tax base without hurting stakeholders'
sentiment and improving India's ease of doing business ranking. The GST
collection, refund, input credit, audit process, GST council reforms, GST
Network, and taxpayers' complaints require continuous improvement and time-
bound re-engineering to meet changing business requirements.

However, the introduction of GST has not yet led to the attainment of all
objectives, and it is too early to say that it has resulted in the attainment of these
targets. The preliminary analysis illustrates that it has been a promising move,
with some temporal adjustments required for effectiveness.

The GST being a process innovation has been implemented well hitherto, with
the effectiveness of implementation hinging on the extent to which the stated
objectives are attained. The GST Council needs to address capacity building
among lesser-endowed participants, such as small-scale manufacturers and
traders, and lower the overall compliance cost for their benefit.

In the long term, GST is expected to lead to lower tax rates and positively affect
macroeconomic indicators, including reducing inflation, increasing revenue
from taxes, fiscal deficit control, and promoting exports and FD. However, the
transition to GST has been challenging, with higher taxes and compliance costs
for consumers and small-scale manufacturers and traders.

In conclusion, the impact of GST on the Indian economy has been mostly
positive, with improvements in the tax base, ease of doing business, and
potential long-term benefits. However, there are challenges that need to be
addressed, such as capacity building and compliance costs, to ensure the full
potential of GST is realized.
2
Introduction of GST

3
2.1 Introduction of GST:

The Goods and Services Tax (GST) is a successor to VAT used in India on the
supply of goods and services. Both VAT and GST have the same taxation slabs.
It is a comprehensive, multistage, destination-based tax: comprehensive because
it has subsumed almost all the indirect taxes except a few state taxes. Multi-
staged as it is, the GST is imposed at every step in the production process, but is
meant to be refunded to all parties in the various stages of production other than
the final consumer and as a destination-based tax, it is collected from point of
consumption and not point of origin like previous taxes.

Goods and services are divided into 5 different tax slabs for collection of tax:
0%, 5%, 12%, 18% and 28%. However, petroleum products, alcoholic
beverages, and electricity are not taxed under GST and instead are taxed
separately by the individual state governments, as per the previous tax system.
There is a special rate of 0.25% on rough precious and semi-precious stones and
3% on gold. In addition a cess of 22% or other rates on top of 28% GST applies
on several items like aerated drinks, luxury cars and tobacco products. Pre-GST,
the statutory tax rate for most goods was about 26.5%; post-GST, most goods
are expected to be in the 18% tax range.

The tax came into effect from 1 July 2017 through the implementation of the
One Hundred and First Amendment to the Constitution of India by the
Government of India. 1 July is celebrated as GST Day. The GST replaced
existing multiple taxes levied by the central and state governments.

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Also, to boost GST billing in India, the Government of India, in association
with state governments, has launched an "Invoice Incentive Scheme" (Mera Bill
Mera Adhikaar). This will encourage the culture of customers asking for
invoices and bills for all purchases. The objective of the scheme is to bring a
cultural and behavioural change in the general public to ‘Ask for a Bill’ as their
right and entitlement.

The tax rates, rules and regulations are governed by the GST Council which
consists of the finance ministers of the central government and all the states.
The GST is meant to replace a slew of indirect taxes with a federated tax and is
therefore expected to reshape the country's $3.5 trillion economy, but its
implementation has received criticism.Positive outcomes of the GST includes
the travel time in interstate movement, which dropped by 20%, because of
disbanding of interstate check posts.

2.2 History:
2.2.1 Formation:
The reform of India's indirect tax regime was started in 1986 by V. P. Singh,
Finance Minister in Rajiv Gandhi’s government, with the introduction of the
Modified Value Added Tax (MODVAT). Subsequently, Prime Minister P. V.
Narasimha Rao and his Finance Minister Manmohan Singh, initiated early
discussions on a Value Added Tax (VAT) 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 Prime Minister Atal Bihari Vajpayee and his
economic advisory panel, which included three former RBI governors I. G.
Patel, Bimal Jalan and C. Rangarajan. Vajpayee set up a committee headed by
the Ministry of finance of West Bengal, Asim Dasgupta to design a GST model.

The Asim Dasgupta committee which 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 2015. It later came out 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

5
recommended rolling out GST as suggested by the Twelfth Finance
Commission.

After the defeat of the BJP-led NDA government in the 2004 Indian general
election and the election of a Congress-led 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 2011, 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.

The UPA introduced the 115th Constitution Amendment Bill on 22 March

2011[12] in the Lok Sabha to bring about the GST. It ran into opposition from
the Bharatiya Janata Party and other parties and was referred to a Standing
Committee headed by the BJP's former Finance Minister Yashwant Sinha. The
committee submitted its report in August 2013, but in October 2013 Gujarat
Chief Minister Narendra Modi raised objections that led to the bill's indefinite
postponement. The Minister for Rural Development Jairam Ramesh attributed
the GST Bill's failure to the "single handed opposition of Narendra Modi".

In the 2014 Indian general election, the Bharatiya Janata Party (BJP)-led NDA
government was elected into power. 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 then 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 for review 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 Constitution amendment Bill and the President Pranab
Mukherjee gave his assent to it.

A 21-member selected committee was formed to look into the proposed GST
laws.After GST Council approved the Central Goods and Services Tax Bill
2017 (The CGST Bill), the Integrated Goods and Services Tax Bill 2017 (The

6
IGST Bill), the Union Territory Goods and Services Tax Bill 2017 (The
UTGST Bill), the Goods and Services Tax (Compensation to the States) Bill
2017 (The Compensation Bill), these Bills were passed by the Lok Sabha on 29
March 2017. The Rajya Sabha passed these Bills on 6 April 2017 which were
then enacted as Acts on 12 April 2017. Thereafter, State Legislatures of
different States have passed respective State Goods and Services Tax Bills.
After the enactment of various GST laws, Goods and Services Tax was
launched all over India with effect from 1 July 2017. The Jammu and Kashmir
state legislature passed its GST act on 7 July 2017, thereby ensuring that the
entire nation is brought under a unified indirect taxation system. There was to
be no GST on the sale and purchase of securities. That continues to be governed
by Securities Transaction Tax (STT).

2.2.2 Implementation:
The GST was launched at midnight on 1 July 2017 by the President of India,
and the Government of India. The launch was marked by a historic midnight (30
June – 1 July) session of both the houses of parliament convened at the Central
Hall of the Parliament. Though the session was attended by high-profile guests
from the business and the entertainment industry including Ratan Tata, it was
boycotted by the opposition due to the predicted problems that it was bound to
lead for the middle and lower class Indians. The tax was strongly opposed by
the largest opposition party, the Indian National Congress.[20][21] It is one of
the few midnight sessions that have been held by the parliament - the others
being the declaration of India's independence on 15 August 1947, and the silver
and golden jubilees of that occasion.After its launch, the GST rates have been
modified multiple times, the latest being on 10 May 2023 where taxpayer with
over ₹5 crore turnover in any financial year from 2017 to 2018 shall issue e-
invoices w.e.f. 1 August 2023.

Members of the Congress boycotted the GST launch altogether. They were
joined by members of the Trinamool Congress, Communist Parties of India and
the Dravida Munnetra Kazhagam. The parties reported that they found virtually
no difference between the GST and the existing taxation system, claiming that
the government was trying to merely rebrand the current taxation system. They
also argued that the GST would increase existing rates on common daily goods
7
while reducing rates on luxury items, and affect many Indians adversely,
especially the middle, lower middle and poorer income groups.

2.3 Tax:
Taxes subsumed

The single GST subsumed several taxes and levies, which included central
excise duty, services tax, additional customs duty, surcharges, state-level value
added tax and Octroi. Other levies which were applicable on inter-state
transportation of goods have also been done away with in GST regime. GST is
levied on all transactions such as sale, transfer, purchase, barter, lease, or import
of goods and/or services.

India adopted a dual GST model, meaning that taxation is administered by both
the Union and state governments. Transactions made within a single state are
levied with Central GST (CGST) by the Central Government and State GST
(SGST) by the State governments. For inter-state transactions and imported
goods or services, an Integrated GST (IGST) is levied by the Central
Government. GST is a consumption-based tax/destination-based tax, therefore,
taxes are paid by the state where the goods or services are consumed not the
state in which they were produced. IGST complicates tax collection for State
Governments by disabling them from collecting the tax owed to them directly
from the Central Government. Under the previous system, a state would only
have to deal with a single government in order to collect tax revenue.

2.4 HSN code:

India is a member of World Customs Organization (WCO) since 1971. It was
originally using 6-digit HSN codes to classify commodities for Customs and
Central Excise. Later Customs and Central Excise added two more digits to
make the codes more precise, resulting in an 8 digit classification. The purpose
of HSN codes is to make GST systematic and globally accepted.

The Harmonized System of Nomenclature (HSN) code is used for classifying

goods under the Goods and Services Tax (GST) in India. The HSN code is a
8
six-digit code that uniquely identifies a product. The first two digits of the code
identify the chapter, the next two digits identify the heading, and the last two
digits identify the subheading.

HSN codes will remove the need to upload the detailed description of the goods.
This will save time and make filing easier since GST returns are automated.

If a company has turnover up to ₹15 million (US$190,000) in the preceding

financial year then it need not mention the HSN code while supplying goods on
invoices. If a company has turnover more than ₹15 million (US$190,000) but
up to ₹50 million (US$630,000), then it needs to mention the first two digits of
HSN code while supplying goods on invoices. If turnover crosses ₹50 million
(US$630,000) then it needs to mention the first 4 digits of HSN code on
invoices.

2.5 Rate:
The GST is imposed at variable rates on variable items. The rate of GST is 18%
for soaps and 28% on washing detergents. GST on movie tickets is based on
slabs, with 18% GST for tickets that cost less than ₹100 and 28% GST on
tickets costing more than ₹100 and 28% on commercial vehicle and private and
5% on readymade clothes. The rate on under-construction property booking is
12%. Some industries and products were exempted by the government and
remain untaxed under GST, such as dairy products, products of milling
industries, fresh vegetables & fruits, meat products, and other groceries and
necessities.

Checkposts across the country were abolished ensuring free and fast movement
of goods. Such efficient transportation of goods was further ensured by
subsuming octroi within the ambit of GST.

The Central Government had proposed to insulate the revenues of the States
from the effects of GST, with the expectation that in due course, GST will be
levied on petroleum and petroleum products. The central government had
assured states of compensation for any revenue loss incurred by them from the
date of GST for a period of five years. However, no concrete laws have yet been

9
made to support such action. GST council adopted concept paper discouraging
tinkering with rates.

2.6 e-Way Bill:

An e-Way Bill is an electronic permit for shipping goods similar to a waybill. It
is an electronic bill; there is no requirement for a paper bill. It was made
compulsory for inter-state transport of goods from 1 June 2018. It is required to
be generated for every inter-state movement of goods beyond 10 kilometres (6.2
mi) and the threshold limit of ₹50,000 (US$630).

Registered GST Taxpayers can register in the e-Way Bill Portal using GSTIN.
Unregistered Persons/ Transporters can enroll in the e-Way Bill System by
providing their PAN and Aadhaar. Supplier/ Recipient/ Transporter can
generate the e-Way Bill.

The Validity of e-Way Bill is fixed as one day for every 200 Kms or part
thereof. The validity can be extended online before the expiry.

Contents of PART - A of the Form EWB - 01 can't be edited or modified once

generated. PART - B can be updated with Vehicle details/ RR/Airway Bill etc.

Intra-State e-Way Bill The five states piloting this project are Andhra Pradesh,
Gujarat, Kerala, Telangana and Uttar Pradesh, which account for 61.8% of the
inter-state e-way bills, started mandatory intrastate e-way bill from 15 April
2018 to further reduce tax evasion. It was successfully introduced in Karnataka
from 1 April 2018. The intrastate e-way bill will pave the way for a seamless,
nationwide single e-way bill system. Six more states Jharkhand, Bihar, Tripura,
Madhya Pradesh, Uttarakhand and Haryana will roll it out from 20 April 18. All
states are mandated to introduce it by 30 May 2018.

2.7 Reverse Charge Mechanism:

Reverse Charge Mechanism (RCM) is a system in GST where the receiver pays
the tax on behalf of unregistered, smaller material and service suppliers. The
10
receiver of the goods is eligible for Input Tax Credit, while the unregistered
dealer is not.

The central government released ₹352.98 billion (US$4.4 billion) to states as

GST compensation. For the implementation, this amount was given to states to
compensate for the revenue. Central government has had to face many
criticisms for delays in compensation.

2.8 Goods excluded from the GST:

Tobacco Products: Products like cigarettes and other tobacco-based items attract
separate taxes.

Alcohol for human consumption (i.e., not for commercial use).

Petrol and petroleum products (GST will apply at a later date), i.e., petroleum
crude, high-speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel.

2.9 QRMP Scheme:

This is a recent amendment in GST Taxation System. If a taxpayer opts for this
scheme he will have to file GST Returns on Quarterly basis instead of regular
monthly basis, but Tax payment will have to be done monthly. QRMP means
quarterly return monthly payment.

The Quarterly Return Filing and Monthly Payment (QRMP) Scheme is a

simplified compliance regime under the Goods and Services Tax (GST) in
India. It is available to registered taxpayers whose aggregate annual turnover
(PAN based) is up to ₹ 5 Crore in the current financial year and the preceding
financial year (if applicable) and have already filed their last due Form GSTR-
3B return.

2.10 Revenue distribution:

Revenue earned from GST (intra state transaction - seller and buyer both are
located in same state) is shared equally on 50-50 basis between central and
11
respective state governments. Example: if Goa has collected a total GST
revenue (intra state transaction - seller and buyer both are located in same state)
of ₹100 million (US$1.3 million) in January, then the share of central
government (CGST) will be ₹50 million (US$630,000) and the remaining ₹50
million (US$630,000) will be a share of Goa's state government GST (SGST)
for the month of January.

For distribution of IGST (inter state transaction - seller and buyer both are
located in different states) collection, revenue is collected by central
government and shared with state where good is imported. Example: 'A' is a
seller located in state of Goa selling a product to 'B' a buyer of that product
located in state of Punjab, then IGST collected from this transaction will be
shared equally on 50-50 basis between central and Punjab state governments
only.

2.11 GST Council:

GST Council is the governing body of the GST having 33 members, out of
which 2 members are of centre and 31 members are from 28 state and 3 Union
territories with Legislature. The council contains the following members (a)
Union Finance Minister (as chairperson) (b) Union Minister of States in charge
of revenue or finance (as member) (c) the ministers of states in charge of
finance or taxation or other ministers as nominated by each states government
(as member). GST Council is an apex member committee to modify, reconcile
or to procure any law or regulation based on the context of goods and services
tax in India. The council is headed by the union finance minister Nirmala
Sitharaman assisted with the finance minister of all the states of India. The GST
council makes recommendations to the Parliament of India to make or amend
laws related to the taxes on goods and services in India.

Members of GST Council

S.No. Member Portfolio

1 Nirmala Sitharaman Union Finance Minister
2 Pankaj Chaudhary Union Minister of State (Finance)

12
3 Buggana Rajendranath Finance Minister, Andhra Pradesh
4 Chowna Mein Deputy Chief Minister, Arunachal Pradesh
5 Ajanta Neog Finance Minister, Assam
Vijay Kumar
6 Finance and Commercial Taxes Minister, Bihar
Chaudhary
Minister of Finance and Commercial Tax,
7 O. P. Choudhary
Chattisgarh
8 Atishi Minister of Finance, Delhi
Minister for Transport and Panchayat Raj, Housing,
9 Mauvin Godinho
Protocol and Legislative Affairs, Goa
10 Kanubhai Desai Finance Minister, Gujarat
11 Dushyant Chautala Deputy Chief Minister, Haryana
Sukhvinder Singh
12 Chief Minister, Himachal Pradesh
Sukhu
13 Rajeev Rai Bhatnagar Advisor to Lieutenant Governor, Jammu & Kashmir
Minister for Planning and Finance, Commercial
14 Rameshwar Oraon Taxes and Food, Public Distribution, and Consumer
Affairs, Jharkhand
Minister for Home Affairs, Law & Parliamentary
15 Siddaramayya
Affairs, Karnataka
16 K. N. Balagopal Finance Minister, Kerala
17 Jagdish Devda Deputy Chief Minister, Madhya Pradesh
18 Devendra Fadnavis Deputy Chief Minister, Maharashtra
Minister For Medical, Health, and Family Welfare
19 Sapam Ranjan Singh
Department, Manipur
20 Conrad Sangma Chief Minister, Meghalaya
21 Lalduhoma Chief Minister, Mizoram
22 Neiphiu Rio Chief Minister, Nagaland
23 Niranjan Pujari Minister of Finance and Excise, Odisha
24 K. Lakshminarayanan Public Works Minister, Puducherry
25 Harpal Singh Cheema Finance Minister, Punjab
26 Diya Kumari Deputy Chief Minister, Rajasthan
Minister for Tourism, Civil Aviation and Industries,
27 Bedu Singh Panth
Sikkim
28 Thangam Thennarasu Minister for Finance, Human Resource Management,

13
 Tamil Nadu
Mallu Bhatti
29 Finance Minister, Telangana
Vikramarka
30 Pranjit Singha Roy Finance Minister, Tripura
Minister for Finance, Parliamentary Affairs, and
31 Suresh Kumar Khanna
Medical Education, Uttar Pradesh
32 Premchand Aggarwal Finance Minister, Uttarakhand
Chandrima
33 Minister of State for Finance, West Bengal
Bhattacharya

2.12 Goods and Services Tax Network (GSTN):

The GSTN software is developed by Infosys Technologies and the information
technology network that provides the computing resources is maintained by the
NIC. "Goods and Services Tax Network" (GSTN) is a nonprofit organization
formed for creating a sophisticated network, accessible to stakeholders,
government, and taxpayers, to access information from a single source (portal).
The portal is accessible to the tax authorities for tracking down every
transaction, while taxpayers have the ability to connect for their tax returns.The
GSTN's authorized capital is ₹100 million (US$1.3 million) in which initially
the Central Government held 24.5 per cent of shares while the state government
held 24.5 per cent. The remaining 51 per cent were held by non-Government
financial institutions, HDFC and HDFC Bank hold 20%, ICICI Bank holds
10%, NSE Strategic Investment holds 10% and LIC Housing Finance holds
11%.

However, later it was made a wholly owned government company having equal
shares of state and central government.

2.13 Criticism:
Technicalities of GST implementation in India have been criticized by global
financial institutions/industries, sections of Indian media, and opposition
political parties in India. World Bank's 2018 version of India Development
Update described India's version of GST as too complex, noticing various flaws

14
compared to GST systems prevalent in other countries; most significantly, the
second-highest tax rate among a sample of 115 countries at 28%.

GST's implementation in India has been further criticized by Indian

businessmen for problems including tax refund delays and too much
documentation and administrative effort needed. According to a partner at PwC
India, when the first GST returns were filed in August 2017, the system crashed
under the weight of filings.

The opposition Indian National Congress has consistently been among the most
vocal opponents of GST implementation in India with party President, Rahul
Gandhi, slamming BJP for allegedly "destroying small businessmen and
industries" in the country. He went on to pejoratively dub GST as "Gabbar
Singh Tax" after an ill-famed, fictional dacoit in Bollywood. Claiming the
implementation of GST as a "way of removing money from the pockets of the
poor", Rahul has called it as a "big failure" while declaring that if the Congress
party is elected to power, it will implement a single slab GST instead of
different slabs. In the run-up to the elections in various states of India, Rahul
has intensified his "Gabbar Singh" criticisms on Modi's administration.

According to an estimate, 230,000 small businesses shut down due to

complications of compliance with the GST.

2.14 Challenges in GST Implementation in India:

The introduction of the Goods and Services Tax (GST) was a landmark reform
in India's taxation system, aimed at streamlining and simplifying multiple taxes
into a singular, unified system. However, like any significant overhaul, its
implementation came with a set of challenges:

o Technological Hurdles: The GST regime brought in the need for

businesses to file taxes online through the GSTN portal. However,
frequent technical glitches, server downtimes, and difficulties in
navigating the portal posed significant challenges, especially for small
businesses unfamiliar with digital tax filing.

o Complex Return Filing Process: With multiple return forms to be filled

and regular filings required, many businesses found the process intricate
15
 and time-consuming. Adopting automated billing software that assist in
accurate form selection, auto-population of details, and timely submission
can be instrumental.

o Compliance Costs: The transition to the GST system necessitated changes

in business processes, IT systems, and skill up-gradation, leading to
increased compliance costs for businesses.

o Input Tax Credit (ITC) Challenges: While the ITC mechanism aimed to
prevent the cascading effect of taxes, businesses faced issues in availing
and reconciling ITC due to mismatches in invoices between suppliers and
recipients.

o Multiple Tax Slabs: The GST system introduced different tax rates for
various goods and services. This multi-tiered structure led to confusion
about the correct tax rate applicable to specific products or services.

o Transition Issues: The shift from the old tax regime to GST led to
challenges related to the carry-forward of tax credits, stock transition
provisions, and more.

o Training and Education: There was a significant knowledge gap among

businesses, especially SMEs, regarding GST's nuances. Proper training
and education became essential to ensure compliance and make the most
of the new system.

In conclusion, while the GST regime aimed at simplifying the tax landscape in
India, its initial phase presented several challenges. However, with the right
tools and continuous learning, businesses can navigate this landscape efficiently
and ensure compliance.

2.15 Features of GST:

o Change of taxation from production to consumption: This will lead to
reduce in revenue of production states. Central government promised to
cover this revenue reduction.
o Elimination of Cascading of taxes: as all taxes will be covered within
GST, there will be no Cascading of taxes. There will be a reduction in
16
 end consumption cost.
o Interlocking of taxation all along the supply chain: This will enhance
tax compliance. There will be a reduction in corruption with tax
inspectorsetc.
o Single indirect tax window: Almost all indirect taxes are subsumed
exempting few like custom duty etc. Until now five rates have been
proposed. Zero rate for essential commodities, 5% for cosmetics of daily
use like soaps, shampoos, 12%, standard 18% and 28%for singlegoods

2.16 Significance:
GST is the most important tax revenue for State , as exempted good are coming
under taxable goods. It is expected to bring down the incidence of harassment
and corruption that trade and industry encounter. This study consist of various
sections of society.Through this study we had check averness among the people
regarding GST.

This study help us to check to individual impact , economical impact , aggregate

impact of indian economy
o High GDP: GDP is more comprehensively covered in consumption
based taxation regime and thus leads to high GDP growth.
o High Tax to GDP ratio: as tax compliance increases, tax to GDP ratio
increases.
o Ease of Doing Business: complexity of taxation regime reduces and this
helps in easing business practices.
o Common economic market: There will be no transport delays at state
borders. This will contribute to efficiency of businesses.
o Low inflation: due to elimination of Cascading of taxes.

The process of registration for GST is different from other registrations in

different ways such as:-

Permission from CGST and SGST Act for registration is required.

If one authority rejects the process for registration there will be automatic
rejection by the other authority.
There shall be no rejection of application without giving a solid reason to the
applicant.
17
Application shall be considered to be granted under CGST/SGST Act if the
application for registration has been granted under SGST Act/CGST Act.
The non-residential and casual taxable person would also require registration
from GST

18
Introduction of Indian
Economy

19
3.1 Introduction:
The economy of India has transitioned from a mixed planned economy to
a mixed middle-income developing social market economy with notable public
sector in strategic sectors. It is the world's fifth-largest economy by nominal
GDP and the third-largest by purchasing power parity (PPP); on a per capita
income basis, India ranked 136th by GDP (nominal) and 125th by GDP
(PPP). From independence in 1947 until 1991, successive governments
followed Soviet model and promoted protectionist economic policies, with
extensive Sovietization, state intervention, demand-side economics, natural
resources, bureaucrat driven enterprises and economic regulation. This is
characterised as dirigism, in the form of the Licence Raj. The end of the Cold
War and an acute balance of payments crisis in 1991 led to the adoption of a
broad economic liberalisation in India and indicative planning. Since the start of
the 21st century, annual average GDP growth has been 6% to 7%. The economy
of the Indian subcontinent was the largest in the world for most of recorded
history up until the onset of colonialism in early 19th century.
Nearly 70% of India's GDP is driven by domestic consumption; country
remains the world's fourth-largest consumer market. Apart from
private consumption, India's GDP is also fueled by government
spending, investments, and exports. In 2022, India was the world's 8th-largest
importer and the 10th-largest exporter. India has been a member of the World
Trade Organization since 1 January 1995. It ranks 63rd on the Ease of doing
business index and 40th on the Global Competitiveness Index. With 476 million
workers, the Indian labour force is the world's second-largest. India has one of
the world's highest number of billionaires and extreme income inequality.
During the 2008 global financial crisis, the economy faced a mild slowdown.
India endorsed Keynesian policy and initiated stimulus
measures (both fiscal and monetary) to boost growth and generate demand. In
subsequent years, economic growth revived. The period between 2004 and 2014
is referred to as India's lost decade as India fell behind other BRIC economies.
In 2021–22, the foreign direct investment (FDI) in India was $82 billion. The
leading sectors for FDI inflows were the service sector, the computer industry,
and the telecom industry. India has free trade agreements with several nations
and blocs, including ASEAN, SAFTA, Mercosur, South Korea, Japan,

20
Australia, UAE, and several others which are in effect or under negotiating
stage.
The service sector makes up more than 50% of GDP and remains the fastest
growing sector, while the industrial sector and the agricultural sector employs a
majority of the labor force. The Bombay Stock Exchange and National Stock
Exchange are some of the world's largest stock exchanges by market
capitalisation. India is the world's sixth-largest manufacturer, representing 2.6%
of global manufacturing output. Nearly 65% of India's population is rural, and
contributes about 50% of India's GDP. India faces high unemployment,
rising income inequality, and a drop in aggregate demand. India's gross
domestic savings rate stood at 29.3% of GDP in 2022. In recent years,
independent economists and financial institutions have accused the government
of manipulating various economic data, especially GDP growth. India's
overall social spending as a share of GDP in 2021–22 will be 8.6%, which is
much lower than the average for OECD nations.

21
3.2Data:
The following table shows the main economic indicators in 1980–2022 (with
IMF staff estimates in 2023–2028). Inflation below 5% is in green The annual
unemployment rate is extracted from the World Bank, although
the International Monetary Fund finds them unreliable.
GDP GDP
GDP
Yea per GD per Inflati Unemploym Governm
GDP grow
r capit P capit on rate ent ent debt
th
a a
201 6,78 5,23 2,03 1,57 7.40
5.80% 5.40% 67.10%
4 1 4 9 4 %
201 7,16 5,46 2,10 1,60 8.00
4.90% 5.40% 69.00%
5 0 5 4 6 %
201 7,73 5,84 2,29 1,73 8.30
4.50% 5.40% 68.90%
6 5 0 5 3 %
201 8,27 6,11 2,70 1,95 6.80
3.60% 5.40% 69.70%
7 7 2 3 8 %
201 9,02 6,59 2,70 1,97 6.50
3.40% 5.30% 70.40%
8 3 1 3 4 %
201 9,54 6,89 2,83 2,05 4.20
4.80% 5.30% 75.00%
9 0 8 6 0 %
-
202 9,10 6,51 2,67 1,91
5.80 6.10% 8.00% 88.50%
0 1 8 2 3
%
202 10,3 7,35 3,15 2,23 9.10
5.50% 6.00% 83.70%
1 71 5 0 4 %
202 11,9 8,39 3,39 2,39 7.20
6.70% 7.30% 81.00%
2 01 8 0 2 %
202 13,1 9,18 3,73 2,61 6.30
5.50% 8.70% 81.90%
3 20 3 2 3 %
202 14,2 9,89 4,10 2,84 6.30
4.60% n/a 82.30%
4 61 2 5 8 %

22
3.3 Sectors:
 Agriculture, forest, and fishing
 Micro, Small, and Medium Enterprises (MSME)
 Mining, resources, and chemicals
 Petroleum
 Chemicals and fertilizer
 Transportation and telecommunications
 Defence and energy
 Infrastructure and constructions
 Finance and trade
 Retail
 Industries
 Tourism
 Films, entertainment and music industry
 Banking

23
Literature Review

24
4.1 Literature Review:
According to agoo Mawuli ―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.

BOOK : GST Law andpractice

AUTHOR: S. S. Gupta

YEAR OF PUBLICATION: 2017

CONCLUSION : Impact of gst on business are vary as per

organization structure .it's up to the organization to determine the
impact of various factor on their finance and re-arrange the business in
order to ensure that the adverse impact is minimized.

BOOK : GST in INDIA - A Comprehensive Guide Book by Clear Tax

YEAR OF PUBLICATION : 2017

CONCLUSION : This ebook will help me understand the basics of

GST, important terminologies and concepts, and how this might affect
business in the long run.

Articles on Impact of GST:

Article 1 - FM Jaitly Hints at Further Rejig of GST Linking GST
Changes To Gujarat Polls 'Juvenile Politics', Says Arun Jaitley. Also
rejecting the Congress's one-tax demand, Arun Jaitley said while there
is scope for further rationalization, it could be decided only by the
revenues that flow in. Also stated that next round team will focus on
5% and 12% slaps ,which have about 250 items each.

25
26
Research Methodology

27
5.1 SCOPE OF THE STUDY:
The study was conducted to analyze the effectiveness of implementing GST.
It covered the opinions of the professionals, traders and the general public,
consumers. It brought to light the beneficial impacts of GST
.This study emphasizes the reason for transition from VAT to GST. This study
was conducted With help of different sections of society for example students,
housewife , employees , self- employed , etc.

5.2 Objective of the project:

 To Evaluate the economic impact of GST implementation on various
sectors of the Indian economy.
 To Assess the effectiveness of GST in simplifying the tax structure and
reducing tax evasion.
 To Analyze the challenges faced by businesses and consumers during
the transition to the GST regime.

5.3 Limitation of the Project:

 Time Constraints: The study may be limited by time constraints,
particularly in conducting in-depth case studies and stakeholder
interviews.
 External Factors: External economic shocks or policy changes
unrelated to GST implementation may influence the observed
outcomes, making it challenging to attribute causality solely to GST.

5.4 Sources Of Data:

This study is intended to identify the impact of GST on Indian economy.

The study is descriptive in nature, based on simple random method. The

primary data was collected from the respondents (Traders, General public and
Experts) about the perception of the present GST system and their expectations
in the forth coming GST.

28
The Secondary data was collected through reputed Journals, Newspapers,
Books, Websites, GST portal. This study brings out suggestions and inferences
drawn from the analysis of both primary and secondary data.

 Primary Data Collection:

The necessary primary data having dealt under various chapters of data analysis
which have been collected through survey method (questionnaire) from General
public Businessmen: Here refers to Traders‟. It includes wholesalers, retailers
and these traders deal in consumer goods, essential goods and other
goods.General Public: This includes public of different sections of society.

 Secondary Data Collection:

The necessary secondary data having dealt under various chapters of data
analysis which have been collected through reputed Journals, Newspapers,
Books, Websites, GST portal.

5.5 Methodology to be Used:

o Literature Review:
Conduct a comprehensive review of existing literature, including academic
journals, government reports, and industry publications.Identify key theories,
concepts, and empirical findings related to the impact of GST on the Indian
economy.
o Data Collection:
Gather data from official sources such as the Reserve Bank of India (RBI),
Ministry of Finance, Central Board of Indirect Taxes and Customs (CBIC), and
other relevant government agencies.Collect data on economic indicators pre and
post-GST implementation, including GDP growth, tax revenue, inflation rates,
investment patterns, and business competitiveness.
Ensure data accuracy, reliability, and consistency to facilitate robust analysis.
o Comparative Analysis:
Utilize econometric techniques to conduct comparative analysis between pre
and post-GST periods.Compare trends and patterns in key economic indicators
to assess the impact of GST on the Indian economy.
Identify significant differences, correlations, and causal relationships to draw
meaningful conclusions about the effectiveness of GST implementation.

29
Data Analysis

30
Data Analysis:
6.1 Primary Data Analysis:

1. Do you now /aware about GST?

Do you now /aware about GST?

YES
NO
YES
100%

Response: all 30 respondent stated that they are aware about GST

2. Dose you affected by GST?

13%

Dose you affected by GST?

YES
NO

87%

31
Response: 26 Respondent YES and 4 Respondent NO

3. What you think , life get simpler due to GST?

Chart Title 20% What you think , life get simpler

due to GST?
YES
NO

80%

Response: 24 Respondent YES and 6 Respondent NO

4. Impact of GST on yourlife?

Chart Title

7%
10% Impact of GST on yourlife?
BEST
10% BETTER
GOOD
BAD
73%

Response: 22 Respondent BEST, 3 BETTER, 3 GOOD and 2 BAD

32
 5. What you think , to follow GST is difficult task ?

Chart Title

13% 10% What you think , to follow GST is

3% difficult task ?
STRONGLY AGREE
AGREE
DISAGREE
STRONGLY DISAGREE

73%

Response: 3 Respondent STRONGLY AGREE, 1 AGREE, 22

DISAGREE and 4 STRONGLY DISAGREE

6. What you think GST has more positive effect than negative?

Chart Title

10% 10%
What you think GST has more posi-
tive effect than negative?
STRONGLY AGREE
AGREE
DISAGREE
STRONGLY DISAGREE

80%

Response: 3 Respondent STRONGLY AGREE, 24 AGREE, 0

33
DISAGREE and 3 STRONGLY DISAGREE

7. Impact of GST on GDP

Chart Title

10% 13%
Impact of GST on GDP
10%
BEST
BETTER
GOOD
BAD

67%

Response: 4 Respondent BEST, 20 BETTER, 3 GOOD and 3 BAD

8. What you think about process to file return of GST?

Chart Title

10%
What you think about process to file
return of GST?
EASY
DIFFICULT

90%

Response: 27 Respondent EASY and 3 Respondent DIFFICULT

34
 9. What you think about impact of GST on indian economy?

Chart Title

7%
10% What you think about impact of GST
on indian economy?
POSITIVE
NEGITIVE
NOT SURE

83%

Response: 25 Respondent POSITIVE, 3 NEGITIVE and 2 NOT SURE

10.Give rating to GST out of 5 star.

Chart Title

10%
Give rating to GST out of 5 star.
7%
5 STAR
7% 4 STAR
3 STAR
57% 2 STAR
20% 1 STAR

Response: 17 Respondent 5 STAR, 6 Respondent 4 STAR, 2

35
Respondent 3 STAR, 2 Respondent 2 STAR and 3 Respondent 1STAR
6.2 Secondary Data Analysis:

6.2.1 GST RATES IN INDIA:

Table 1 shows that the percentage of taxes before and after

implementation of GST, like on package products we pay 4-5% taxes
but after the implementation of GST it would be total 18%, which
shows that all package products would turn costly which will affect
common man. After package products we see that on readymade
garments we also pay 4-5% of taxes but after GST it will be 18% so our
readymade garments would also be costly like this jewellery, mobile,
credit cards etc. would also turn costly but cars, home appliance etc.
would be cheaper.

Here we can conclude that after implementation of

GST common man will suffer because he would not
BEFORE GST AFTER GST
be able to satisfy his wants completely but there
would be no

Package Products 4-5% 18%

Readymade Garments 4-5% 18%

Jewellery 3% 18%

Mobile & Credit card 15% 18%

Cars 30-40% 18%

Home appliance 12.5% & 14.5% (Excise & VAT) 18%

Tax before and after implementation of GST

Table 2 reveals the impact of GST after implementation, it can be

understood clearly from the table which shows the rate of goods
increasing and decreasing after implementation of GST this table also
shows some goods on which there is no implementation of GST. The
first row shows the goods whose rate will decrease after GST and
second row shows increase in rates of goods after GST.Thus these were
some of the items which are affected after the implementation of Goods

36
and Services Tax.
Decrease No GST Increase
Television Bread White and Mobile phone
Refrigerator whole Meal Computer
Air Cooking oil Eye – pad &
Conditioner Mutton tablet
Home theater system Diesel Digital photo
Hair dryer Petrol printing
Electric fan & toaster Rice Transportation of
Gas cooker Fresh vegetable goods
double burner Fresh fish Drinking water
Electric iron Powdered milk Magazines
Cotton bath Public transport Fish ball
towel Motor oil Canned sardine &
Toothbrush Engine oil tuna
Dettol, antiseptic Lipstick
Chairs Motor cycle 110cc
Watches
Table 3 Expected price movement for items upon implementation of GST

6.2.2 Impact of GST on Various Sectors:

 Fast moving consumer goods sector:
The Indian FMCG sector is the fastest growing sector in the economy.
FMCG sector is the major contributor in both direct and indirect taxes in
the economy. Implementation of Goods and services tax will majorly
influence Indian economy. The current rate of taxation in FMCG sector is
around 22 to 25% and after GST rate is expected to be much lower which
will result in reduction of prices of consumer goods.

 Traders:
The impact of tax on the wholesaler or retailer would be limited to the value
addition. The tax paid at earlier stages (except SGST of other states) would

37
be available as set off for payment of GST on supplies. Therefore traders
would prefer to buy/ receive supplies with invoice. The tax payable as a
percentage of the supply value would be small whereby the compliance
would be more cost effective than evasion. Cost of products and services
would reduce due to the cascading effect of tax being reduced. Traders in
GST regime can concentrate on growth into large entities instead of
remaining small and fragmented.

 Manufacturers:
The manufacturing sector in India is not only plagued with concerns
ranging from decline in exports and infrastructure spending but also with
the burden of complying with a complex indirect taxation system. Multiple
indirect tax legislations have led to significant compliance and
administrative costs, classification and valuation disputes and generally
impaired the ease of doing business in this sector.The implementation of
GST will significantly improve the competitiveness and performanceFor
most industrial products, GST rates have been slated at 18%. Today a
manufacturer pays about 28-30% as taxes, so this means an average saving
of around10%.
GST will affect the manufacturing sector in the following ways:
State Incentives & Area based incentives Presently, companies have set up their
manufacturing units with significant investment outlays based on incentives
offered by states under their respective investment promotion policies.
However, under the GST regime, such flexibility given to the states is likely to
be curtailed to achieve the intended effect of uniformity.
Further, GST will only be credited to the state where the supplies are consumed,
as opposed to the present situation where the producer state is credited with
central sales tax on inter- state sales. This would lead to a loss of revenue for the
producer states and therefore such states may not be in a financial position to
continue offering such incentives.
In addition to above, manufacturing units enjoy exemption of taxes based on
their location in specified backward areas, capital investment etc. There is no
clarity under the GST on the treatment of such area based exemptions resulting
in loss of unutilized portion of such incentives.
Increased working capital

38
Impact on working capital may be significant for the manufacturing sector.
Currently, stock transfers are not subject to tax. However, under the GST
regime, stock transfers are deemed to be supplies and are subject to GST.
Though GST paid at this stage would be available as credit, realization of this
GST would only occur when the final supply is concluded. This would likely
result in cash flow blockages and therefore companies would have to rethink
their supply chain management strategies to minimize this impact on their
cashflows.
Free supplies & Discounts
Under the present indirect tax regime, free supply of goods is not subject to
VAT. GST law stipulates that specific transactions without consideration would
also be treated as supplies. Accordingly, free samples may be subject to GST,
leading to increase in overall costs.
Since GST law stipulates that post supply discounts are to be excluded from the
transaction value, provided such discounts are known at or before the time of
supply of goods and are linked to the invoices for such supply. Thus, companies
may also need to analyze existing post supply discounts/incentive schemes
where the quantum of discount is not known at the supply stage.
Supply chain restructuring
Currently, the supply and distribution models are structured to optimize indirect
tax impact arising at various levels of value addition. Transition to GST will
result in such decisions being
taken to optimize business efficiency (as opposed to indirect tax efficiency).
Currently, firms spend a high 5-8% as product distribution and warehousing
cost. GST would lead to lower transportation and distribution costs.

With the advent of GST, it is hoped that such warehousing and logistics
decision would be based on economic efficiency such as costs and locational
advantages vis-a-vis key customers.

Also with overall reduction of cascading effect of taxes, especially on the post-
manufacture stage of the supply chain, manufacturing sector stands to benefit
significantly and have a positive effect on the cost of manufactured products in
the hands of consumers. However, concerns remain on specific issues such as
the additional 1% origin tax, increased cash flow issues on account of GST
payable on stock transfers and increased costs owing to exclusion of petroleum
fuels from the ambit of GST.

39
Yet the lower taxes, simplified tax structure, seamless tax credit facility and
technology driven easy tax compliance system offered by GST provide an ideal
platform to increase manufacturing‘s share of GDP from the current 17.4% to
25% by 2025.

There would be a saving in taxes absorbed at various stages of manufactures

thereby reducing the cost of goods sold. This would make them more
competitive both in domestic and international markets. The exports would be
cheaper as taxes paid at earlier stages could be refunded. The difference
between large manufactures and small would reduce. The indignity of
harassments and bribe for honest manufacturers would substantially reduce over
a period of time.

 E-commerce:
Currently, the federal indirect tax structure with different tax regimes in various
states has led to confusion and uncertainty on the tax treatment of online
marketplaces and aggregators. GST will help remove the ambiguity that
currently exists in this sector and insulate such operators from ad hoc laws and
arbitrary levies imposed by state governments. However, it may result in higher
compliance challenges for the e- commerce sector

Compliance costs

Under the new regime, every electronic commerce operator would need to
collect tax at source and deposit applicable GST when payments are to be made
to the supplier.

In the current regime, e-commerce players are treated only as service providers
and are therefore required to comply with only one central service tax
legislation. Under GST, with the burden of TCS @ 1%, such electronic
commerce operators will also be required to undertake additional compliances
in states where the supplier is located.

However, it has been kept at 1%, which is the lowest. Thus, E-commerce
consumers are likely to remain unaffected once GST sets even as players like
Flipkart and Amazon prepare to deduct 1% of the payment it makes to sellers

40
under the new tax regime. This will not significantly increase the onus and
compliance burden on electronic commerce operators.

Stock transfers to be taxed Under the GST Law, specified transactions without
consideration would also be treated as supplies. Intra-state and inter-state stock
transfers, between branches or warehouses of a single e- commerce entity,
would be deemed to be supplies, subject to GST. Though the tax paid would be
available as credit to the entity, this may result in cash flow blockages.

Credit available only when tax is paid Credit can only be claimed on taxes
which have been paid to the credit of the government. However, removal of
cascading effect and consolidation of taxes could bring in significant benefits
such as unrestrictive cross utilization of credits of service tax paid on input
services like

warehousing, logistics, commission of marketplace. The GST will therefore

facilitate seamless credit across supply chains, with tax set offs available across
the production value chain, both for goods and services, therefore bringing
down the overall cost of supplies. This cost benefit would be ultimately passed
on to the customers or help in increasing the books of the companies.

 Real Estate:
Indian real estate sector is estimated to account for about 5% of India's gross
domestic product and is considered the second-largest employer in the country.
Real estate sector is already subject to multiple taxation, the implementation of
GST is theoretically expected to help the consumers and builders.

The GST regime will be a game changer for real estate sector and the 12% GST
on construction projects meant for sale to buyers will boost the sector.

Ambit of GST under real estate is likely to result in more transparency, which
will significantly reduce tax evasion through more efficient transaction-tracking
methods and improved enforcement and compliance. Since GST may be levied
on a single value, the current issue of levying tax on tax (VAT on central excise
duty) is likely to be removed.

41
Transfer of (completed) properties may continue to be outside the purview of
GST and be liable only to applicable stamp duties. However, on procurement of
materials for civil construction, GST will be applicable.

At present, developers pay various non- creditable taxes on supplies like excise
duty,customs duty, CST, entry tax etc. on the procurement side, and the buyers
pay service tax and VAT on purchase of residential units when booked prior to
their completion. GST will replace these multiple taxes with a single tax and all
the developers will get the input credit on the material they are using in
construction, thus ensuring a smooth flow of credits through the chain which in
turn will reduce costs for all players.

Also, the present tax laws provides an abatement of 75% on service tax to be
paid for property valuing less than one crore, whereas properties valuing more
than one crore allows only 70% of abatement resulting in a pay out of service
tax at the rate of 4.50%. In addition to above, applicability of VAT & stamp
duty is also there. However, abatements will be removed and stamp duty will
continue under GST, increasing the overall tax liability.

Affordable housing will continue to be exempted from service tax underGST.

The heavily taxed real estate sector welcomes a single stable 12% GST rate,
inclusive of the value of land and with full input tax credits. Thus, the actual tax
incidence under GST will be lower than the existing multiple indirect taxes on
the sector. Also, the GST rate for work contracts will also be offset by input
credits thereby providing a seamless and simplified tax policy.

The implementation of GST will broadly benefit real estate sector by ensuring a
uniform tax structure and improve tax compliance by developers. It looks at
bringing in greater transparency for the sector and may minimize unscrupulous
transactions. GST will have a cascading effect for the home buyers, as
developers with more margins in their hands will be able to restructure the cost
of the products in favour of consumers thereby reducing the property prices.

 Banking:
Banks have always been a huge pillar of the Indian economy and taxpayers are
literally banking on them for financial needs.
42
In India, most of the banking and financial services are exposed to service tax,
at the rate of 15%. Under the new tax regime, GST rate for financial services
transactions, such as banking, mutual funds, insurance and stock broking has
been increased to 18% from 15% earlier. Thus, financial services transactions to
become marginally costlier.

GST applies to all services wherein there is a supply of services for

consideration. So, in banking transactions such as credit card payments, fund
transfer, ATM transactions, processing fees on loans etc., where the banks are
levying charges, increased tax rates would apply. This would have a slight
inflationary impact.

Also, Interest on loans, trading in securities, foreign currency and retail services
will also fall within the ambit of GST. Thus, it appears that imposing GST on
banking and financial services will make the financial services costly.

However, interest on fixed deposits, bank account deposits etc. which do not
attract a charge will remain so even under the new regime.

Since GST is a destination-based tax, it might be a challenge to determine the

destination of certain services (at present, services are taxed at the place of
rendering the service). This may lead to a difficulty in determining state GST,
central GST or inter-state GST on B2B and B2C transactions.

 Automobiles:
Buyers of passenger vehicles in the premium segment will be key beneficiaries
of GST, which will reduce the effective duty on such models. Prices of small
cars will more or less remain the same as their will only be a minor hike in the
duty under the GST.

Cars will be taxed at the top rate of 28% plus a cess in the range of 1% to 15%.
Small cars will be charged 1% cess on top of 28% tax, mid- sized cars will
attract 3% cess and luxury cars 15% cess on top of the peakrate.

A current levy of Indirect taxes on cars varies from 30% to 45%. The rates of
GST are as per the expectations of the industry and almost all segments of the

43
industry have benefitted by way of a reduced overall tax burden in varying
degree.

Moreover, elimination of cascading effect and offset of input tax credit at every
stage ofvalue chain will reduce the cost. By and large, the impact of GST may
be positive for car segment of automobile sector. There will be several key
beneficiaries of GST including some really giant companies.

Industry experts opine that GST will lead to the dropping of on road price of
vehicles by 8%. Lower prices can be construed as indirect stimulus to boost
volumes. Key beneficiaries would be Maruti Suzuki, M&M and Eicher Motors.

However, demand for commercial vehicles may be hit in the medium term. GST
will subsume local taxes, reduce time at check-posts and ease logistics hurdles.
With fleet productivity increasing, operators may not feel the need to expand
mid-term.

Further, GST will also enable the auto dealers to get input tax credit for the GST
paid by them at the time of acquiring the vehicles from the OEMs. Similar
benefit will accrue to them on the spare part/servicebusinesses.

A reduced overall tax burden will pave the way for stimulating demand and
strengthening the automotive market in the country.

 Agriculture:
The implementation of GST would boost the economic growth by the means of
wider tax base, compliance in tax payment and by pushing balance of trade on
favorable side.

One of the most radical decisions taken at the GST council meet was to fix the
applicable GST rate at zero per cent for most of the primary farm produce.

The central government currently taxes neither production/sale of farm produce

nor agricultural incomes. Under GST also, there will be no VAT and the cesses
too are supposed to be subsumed within the zero per cent GST. Thus, there will
be no impact of GST on the farming community.

44
However, the rates on fruit and vegetable juices, jam, sauces, purees, mixes,
concentrates and a host of processed foods have been set at 12 to18%.

Taking into consideration food consumed by the poor, food grain and milk have
been exempted from taxes. Cereals will be taxed at 5%. Under the new GST
law, dairy farming, poultry farming and stock breeding are kept out of the
definition of agriculture. Therefore, these will be taxable under GST.

The main impact of GST in agriculture would bring is the inflation with
currently 4% VAT being increased to 8% on many food items including cereals
and grains as the exemption under VAT is limited to unprocessed food. The
most affected from the inflation would be the consumers living below poverty
line.

Also, the incidence of taxation on agro processing industry would also help in
reducing the cost of heavy machinery required for producing agricultural
commodities.

Implementation of GST is essential to improve the transparency, reliability,

timeline of supply chain mechanism. Since most of the agricultural
commodities are perishable in nature. An improved supply chain mechanism
due to GST would reduce the time taken for inter-statetransportation and would
ensure reduction in wastage and cost for the farmers/ retailers.

GST system seeks to replace multiple taxes and tariffs and has set free the
decisions on warehousing and distribution from tax considerations. Under GST,
the logistics and transportation will be more cost and time efficient, thereby
curtailing the wastage of precious food as well.

Moreover, with the ease of availing tax credit under GST regime, it is expected
to boost inter- state trade leading to achieving the objectives of National
Agricultural Market. Both CGST and SGST will be levied on import of goods
and services into the country. Exports, however, will be zero-rated, meaning
exporters of goods and services need not pay GST on their exports.

About its implications on agricultural sector, it could be concluded that though

the overall tax burden on consumers will be less in new tax regime, but
certainly it would have inflationary pressure on the food articles especially
processed one which may lead to restoring the consumption towards fresh farm
products.
45
The implementation of GST is going to benefit a lot, the farmers/ distributors in
the long run as there will be a single unified national agriculture market which
will help them to sell their produce for the best available prices.

 Pharmaceuticals:
The Indian pharmaceutical industry is the principal supplier of generic drugs all
over the world, with 80% of all AIDS drugs produced in India. The UN has
provided licenses to six Indian pharmaceutical labs to make generic anti-AIDS
medicine for all the developing nations. Indian pharmaceutical companies
manufacture 20% of all generic drugs used around the world.

GST in India is likely to have a far-reaching impact on several aspects of

business including pricing of products and services, supply chain, IT systems,
accounting, tax compliance framework & re-skilling of talent.

The pharmaceutical industry was hoping the GST rate on life-saving drugs
would be zero, even as it has been capped at 5% and that of all other
formulations at 12%. The rates in the GST regime are slightly higher than what
prevail now.

In the GST regime, essential drugs that treat malaria, HIV-AIDS, tuberculosis,
and diabetes fall in the 5% bracket. Almost all other drugs are in the 12% net.

Nicotine polacrilex gum is the only pharmaceutical product to be charged at the

rate of 18%. Cipla, the brand which produces nicotine gums, will probably be
impacted from the rate fixed at 18%. More than the tax rate, the bigger worry
for the companies is the disruption the new tax regime will bring.

Medicines to be get costlier as active pharmaceutical ingredient, or raw

materials, will be taxed at 18%.

Distributors and stockiest are upset at the loss they might have to incur with the
increase in the effective tax rate. The effective tax rate on formulations, now
9%, has been increased to 12% and trader margins have been built into the tax
rate.

Under the current tax laws on pharmaceutical products, in many states VAT is
on maximum retail price, which is on a single point. Due to this, the distribution
46
channel does not pay VAT. Thus, for them paying tax under GST coupled with
three returns a month is a humongous task.

Earlier, ayurvedic drugs or medicines were charged an average VAT of 4% and

excise of 1.5% due to the excise free manufacturing zone benefit. Under GST,
ayurvedic medicines could get costlier as they would be taxed at the rate of
12%.

No clarification has been provided by the government on the issue of

manufacturers operating in excise-free manufacturing zones paying more tax
under GST. Most of these manufacturers are competitive in the pharmaceutical
industry is due to the excise benefit as they are situated in remote places.

The Pharma industry also GST specifically provides for refund of accumulated
credit resulting out of increased rate for inputs vis-a- vis reduced rate of output.
This is positive news for the Pharma industry, which has been struggling with a
high amount of blocked credit in the current regime. Also, special provisions for
duty-free movement of goods under job work model, which is prevalent in the
pharmaceutical industry and fundamental to its operations, have been provided
in the new regime.

GST law also provides seamless transition of entire credit balance as on the cut
over date under the present indirect tax laws.

Also, continuity of the area-based indirect tax benefits under the GST regime is
critical as this may also indirectly impact the cost of medicines and ultimate
price to be paid by the patients.

Since GST on inter-state sale of goods would be creditable, there is an

opportunity to remodel current supply chain structure to ensure lower logistics
cost and bring in significant operational efficiency which should have a positive
impact on the profitability of the companies.

The sector is hopeful of making refund process fast and simple, this coupled
with savings in warehousing and logistics cost may anticipate a positive impact.

A lot of the times, medicines are provided without bills in India. GST would
curb such practices as providing medicine without the bill would not be
beneficial for anyone in the distribution chain.

47
The government needs to still provide clarification on the inclusion of the
current benefit for the manufacturers under excise for operating from the excise
free manufacturing zones. The pharmaceutical industry is also asking for more
information on the implementation of GST on the MRP of pharmaceutical
products.

 FMCG & Retail:

GST would have significant impact on the way businesses operate and one of
the sectors which would be significantly impacted by GST is the retail sector.
Its impact on FMCG firms will depend on their product mix, given that the tax
rates have gone up for some products and have fallen for others.

The tax fitments announced by the GST council has evoked a mixed response
from the FMCG sector, with some viewing it as positive, while many others
have expressed disappointment.

Beverage companies, for instance, said the effective tax rate of 40% on
sweetened aerated water and flavored water under GST was against the stated
policy of maintaining parity with the existing weighted average tax, which is
significantly below 40%. Aerated beverages have been placed in the highest tax
slab of 28% and in addition will attract a cess of12%.

Apart from driving supply chain efficiencies, bringing untaxed players into the
tax net, a large section of the industry still operates in the unorganized segment,
thus GST will level the playing field for the larger, established players in the
industry.

However, the GST rate structure shows that not all FMCG companies stand to
benefit from the new regime.

The rates for various FMCG segments have mostly been along expected lines.
Items of mass consumption like toothpaste, soaps, hair oil etc. have been put
under the 18% tax slab, significantly lower than the 22-24% tax rate they have
been paying. This is in accordance with the government‘s stance of keeping tax
rates low for mass consumption products. In fact, the GST rate schedule
indicates that nearly 81% of all items are in the 18% tax bracket or below. The
remaining 19% fall in the 28% tax slab.
48
The FMCG companies, whose tax incidence has come down under the GST
regime, are likely to pass it on to the consumers in the form of lower prices.
Lower prices could potentially support volume growth for certain products,
particularly in the rural segment. It is believed that it could result in a faster
consumption shift from unbranded to branded products, spurring volume growth
for FMCG companies. Simultaneously, it will also bring operational efficiency
with rationalization of supply chain by removing bottlenecks. Analysts also
point out that tax exemption provided to several critical products required for
food processing like jaggery, cereals and milk would benefit this industry.

However, surprisingly some of the widely consumed products have been placed
under the highest tax slab of 28% which is slightly higher than the rate levied
earlier. Higher tax rate in paints, baby food, detergents and shampoo is a real
dampener since these are daily-use, mass consumption items. Manufacturers
will have to pass on the higher tax incidence to consumers in the form of higher
prices of these goods.

Most of the items belonging to the premium category have been put under the
highest tax slab of 28%. These include health supplements, skin care, aerated
drinks, and liquid soap, among other goods. But this is not going to have a
particularly negative impact on manufacturers as they had been paying similar
taxes earlier.

For most other FMCG majors, the GST rate structure is likely to be neutral or
marginally positive, as their broad portfolios would see a mixed impact. In case
of HUL, for instance, tax incidence has reduced for soap, toothpaste and tea, but
increased for detergent, shampoo and skin care. For Godrej consumer products,
lower tax incidence on soaps and insecticides is a positive, but higher tax rate
for hair dye is a negative.

In addition to the above, following are to be considered:

Increased availability of input tax credit

However, the GST charged on the aforementioned transactions would be

creditable. This would eliminate the cascading effect of taxes and could lead to
reduction in effective tax cost for various products.

But, a higher rate of GST on certain products could offset the benefit of
increased credit availability mentioned above and lead to higher tax cost.
49
Promotion schemes

Retailers currently offer various marketing schemes such as ―Buy one get one
free‖, free samples, etc. to customers. At present, the products given free of cost
are not liable to sales tax. However, in the GST regime, supply of goods by one
person to another without consideration could also be liable for taxation. This
would lead to increased cost of promotion and also pose a challenge as regards
the valuation to be adopted for calculating GST on such goods.

Further, FMCG companies could generate substantial savings in logistics and

distribution costs as the need for multiple sales depots will be eliminated.
Currently, FMCG companies pay nearly 24-25% including excise duty, VAT
and entry tax and a lower rate of 18% will yield significant reduction in taxes.
Also, warehouse rationalization and reduction of overall tax rates is expected to
generate saving.

Thus, several of the rapidly moving consumer goods companies such as HUL,
ITC, P&G will benefit immensely by this tax structure of a GST rate equaling to
18%. Also, much relies on the exemptions which are being retained along with
the excise benefits. Benefits aren‘t expected to be huge and will happen slowly
as per several of the analysts.

At present, the CVD on import of goods, excise duty on goods manufactured in

India, CST on inter-state procurement of goods and service tax on input
services, are a cost to the retailers.

 Energy:
The energy sector is a key driver for economic growth but remains plagued by
policy and regulatory bottlenecks. Lack of pass through of indirect taxes
contributes to the inefficiencies that have crept into this sector. Unfortunately,
this legacy issue is set to continue under the new GST regime, with generation
and sale of electricity being kept outside the purview of GST but capital goods
and services used in the energy sector being brought within the GST net.

New GST rate slabs for coal and capital goods are expected to bring cheer to the
power sector. Coal, the key raw material for about 60% of the power produced

50
in the country, has been placed under the 5% slab, while capital goods and
intermediate industries will be under the 18% slab.

Thus, the 5% rate for coal, down from 11.7% in the current tax regime is a
major breather as it would help reduce the final tariff which would be passed on
to the consumers.

At the same time, capital goods falling in the 18% tax slab would also help the
power project developers to reduce their cost and hence the capacity charge will
reduce.

Currently, tax concessions and exemptions, both at the central and state level
are available on specified goods and services which are used in the energy
sector. However, with the GST regime generally set to trim such exemptions
and concessions, the effect on the energy sector may be significant.

Increased cost of energy projects

While goods and services required for setting up energy projects will be subject
to GST, they will not be creditable for the generating entity leading to a
cascading of indirect taxes. Also, there is no clarity on whether the various
concessions/ exemptions available for setting up energy projects will continue
under the GST regime.

Moreover, removal of concessional rate for inter-state procurement for EPC

contracts would not allow the project owners to structure their procurements as
inter-state sales to reduce tax costs.

In the absence of such tax exemptions and concessions, there is a possibility of

a significant increase in project costs.

Impact on renewable energy

With a view to encourage clean energy, multiple tax concessions and

exemptions have been extended to the renewable energy sector. As a result,
green energy is generally available at reduced tariff rates. However, there is no
clarity on whether such benefits would be extended under the GST regime. It is
necessary that the government continues to offer tax breaks to the renewable
energy sector, for it to remain a competitive option to conventional fuel based
energy.

51
Therefore, a lower tax rate of 5% on renewable energy equipment would not
result in any increase in the renewable energy costs and the cost of energy
projects in India. This would remove GST incidence at the terminal stage, and
also enable suppliers to obtain tax refunds of their own input costs.

Further, energy is a core sector in any economy since power is a key

requirement for every commercial activity. Any tax distortion faced by this
sector on account of electricity being outside the ambit of GST, will have a
cascading effect on the rest of the economy, negating some of the very benefits
sought to be brought about by the introduction of GST. Accordingly, it is felt
that the Government has missed an opportunity by not integrating generation
and distribution of electricity with other supplies which interact with it, under
the umbrella of GST.

Therefore, the viability of the energy sector, under the current GST regime,
would depend upon the exemptions and concessionary tax which may be put in
place to counter the impact of different tax regimes on the input and output side.
Exemptions in renewable will need to be grandfathered for this sub-sector to
remain viable.

 Telecom:
From the conventional belief of being a communication service provider to
providing multiple streams of value added services, the telecommunication
(telecom) sector has become one of India‘s core economic drivers.

Presently, the telecom industry faces several shortcomings such as cascading

effect of taxes, issues with the classification of services, etc. that hamper the
growth of this sector.

One of the major concerns for telecom service providers is the denial of cenvat
credit on telecom towers. However, under the GST regime, telecom would be
allowed to avail such input tax credit for utilization against output GST liability.

In order to achieve the desired goal of expanding the telecom business and
accomplishing socio- economic development, it is essential that the cost of the
telecom service provider goes down, which will result in lower tariff rates and

52
broader consumer base. Considering an overall objective, the proposed GST
framework seems to have addressed the concerns of the telecom sector.

The seamless flow of credit under the GST regime will help reduce the overall
cost and eventually the benefit can be passed on to the end-user by lowering
tariff rates. There would be pertinent increase in free cash flow which can be
used in business development opportunities.

All service related sectors are expected to be negatively-effected as the service

tax rate is 15% currently and GST rate on telecom has been fixed at 18%. Even
a moderate rise in tax could hit demand and profits. Given the data volumes are
slowing and with the launch of Reliance Jio, the times ahead for telecom
companies are going to be tough and this will be reflected in their stock prices
as well.

Also, most telecoms have obtained centralized service tax registration certificate
and undertake centralized compliances. However, under the GST Law, separate
registration would be required in each state from where the services are
rendered leading to increased compliance requirements as compared to the
current regime.Telecoms would still need to advocate with the Government for
unresolved issues under GST such as double taxation on account of free
supplies to service provider, absence of provision for transition of input tax
credit, lack of clarity on telecom‘s eligibility to claim credit relating to passive
infrastructure etc.

The telecom sector is vibrant, price-sensitive and has a high growth potential.
Strong policy support from the government under GST is crucial for overall
development.

 Transportation Industry:
GST on transport sector will result in more efficient cross state transportation. It
will bring down the logistics cost, reduced times for transportation. Currently all
the 29 states of India collect taxes at different rates on goods that move across
the state borders that‟s why the tax on transportation is collected multiple times.
This will make long delays at different interstate checkpoints for reviewing by
state authorities who checks for the application of relevant taxes and other
levies. This causes the delays for an average of 6 to 7 hours. GST would replace
53
around 15 state and federal taxes and tariffs for a single tax at the point of sale
of goods.

 Textiles Industry:
It is expected that the tax rate in GST would be higher in textile industry as per
the current tax rate. Cotton and wool fibre which are currently exempted from
tax would come under tax in GST but the textile industry may be beneficial
from GST as manufacturing costs ,may be reduced due to subsume of various
taxes like octroi, entry tax, luxury tax etc. There will be few drawbacks also but
GST will support the industry in long run.

4.2.3 Monthly National Revenue collection:

Monthly National Revenue Collections

M 2023- 2022- 2021- 2020- 2019- 2018- 2017-

ont 24 23 22 21 20 19 18
h

Ap ₹187, ₹167, ₹139, ₹32,29 ₹113,8 ₹103,4 NA

ril 035 540 708 4 65 59
crore ( crore ( crore ( crore ( crore ( crore (
US$23 US$21 US$17 US$4. US$14 US$13
billion billion billion 0 billio billion billion
) ) ) n) ) )

Ma ₹157, ₹140, ₹97,8 ₹62,00 ₹100,2 ₹94,01 NA

y 090 885 21 9 89 6
crore ( crore ( crore ( crore ( crore ( crore (
US$20 US$18 US$12 US$7. US$13 US$12
billion billion billion 8 billio billion billion
) ) ) n) ) )

Ju ₹161, ₹144, ₹92,8 ₹90,91 ₹99,93 ₹95,61 NA

54
ne 497 616 00 7 8 0
crore ( crore ( crore ( crore ( crore ( crore (
US$20 US$18 US$12 US$11 US$13 US$12
billion billion billion billion billion billion
) ) ) ) ) )

Jul ₹165, ₹148, ₹116, ₹87,42 ₹102,0 ₹96,48 ₹21,57

y 105 995 393 2 83 3 2
crore ( crore ( crore ( crore ( crore ( crore ( crore (
US$21 US$19 US$15 US$11 US$13 US$12 US$2.
billion billion billion billion billion billion 7 billio
) ) ) ) ) ) n)

Au ₹159, ₹143, ₹112, ₹86,44 ₹98,20 ₹93,96 ₹95,63

gu 069 612 020 9 3 0 3
st crore ( crore ( crore ( crore ( crore ( crore ( crore (
US$20 US$18 US$14 US$11 US$12 US$12 US$12
billion billion billion billion billion billion billion
) ) ) ) ) ) )

Se ₹162, ₹147, ₹117, ₹95,48 ₹91,91 ₹94,44 ₹94,06

pte 712 686 010 0 7 2 4
mb crore ( crore ( crore ( crore ( crore ( crore ( crore (
er US$20 US$18 US$15 US$12 US$12 US$12 US$12
billion billion billion billion billion billion billion
) ) ) ) ) ) )

Oc ₹172, ₹151, ₹130, ₹105,1 ₹95,38 ₹100,7 ₹93,33

tob 003 718 127 55 0 10 3
er crore ( crore ( crore ( crore ( crore ( crore ( crore (
US$22 US$19 US$16 US$13 US$12 US$13 US$12
billion billion billion billion billion billion billion
) ) ) ) ) ) )

No ₹167, ₹145, ₹131, ₹104,9 ₹103,4 ₹97,63 ₹83,78

ve 929 867 526 63 91 7 0
mb crore ( crore ( crore ( crore ( crore ( crore ( crore (
er US$21 US$18 US$16 US$13 US$13 US$12 US$10
billion billion billion billion billion billion billion
55
 ) ) ) ) ) ) )

De ₹164, ₹149, ₹129, ₹115,1 ₹103,1 ₹94,72 ₹84,31

ce 882 507 780 74 84 6 4
mb crore crore ( crore ( crore ( crore ( crore ( crore (
er US$19 US$16 US$14 US$13 US$12 US$11
billion billion billion billion billion billion
) ) ) ) ) )

Jan ₹172, ₹157, ₹140, ₹119,8 ₹110,8 ₹102,5 ₹89,82

uar 129 554 986 75 18 03 5
y crore crore ( crore ( crore ( crore ( crore ( crore (
US$20 US$18 US$15 US$14 US$13 US$11
billion billion billion billion billion billion
) ) ) ) ) )

Fe ₹168, ₹149, ₹133, ₹113,1 ₹105,3 ₹97,24 ₹85,96

bru 337 577 026 43 66 7 2
ary crore crore ( crore ( crore ( crore ( crore ( crore (
US$19 US$17 US$14 US$13 US$12 US$11
billion billion billion billion billion billion
) ) ) ) ) )

Ma ₹178, ₹160, ₹142, ₹123,9 ₹97,59 ₹106,5 ₹92,16

rch 484 122 095 02 7 77 7
crore ( crore ( crore ( crore ( crore ( crore ( crore (
US$22 US$20 US$18 US$16 US$12 US$13 US$12
billion billion billion billion billion billion billion
) ) ) ) ) ) )

An ₹168, ₹149, ₹123, ₹94,73 ₹101,8 ₹98,11 ₹82,29

nu 000 772 608 1.91 44 4 4
al crore ( crore ( crore ( crore ( crore ( crore ( crore (
Av US$21 US$19 US$15 US$12 US$13 US$12 US$10
era billion billion billion billion billion billion billion
ge ) ) ) ) ) ) )

56
4.2.4 EXAMPLE OF GST:
EXAMPLE 1.

Let us examine this with an example of car as a product with overall rate of tax
being considered same under existing and under GST regime – to illustrate
elimination of tax on tax.

Previous Tax Structure:

Example of Car: Existing

Cost of Manufactures 4,00,000
Excise + Infrastructure cess @ 10% 40,000
Dealer Cost 440000
Margin @ 10 % 44,000
Sale Price for delear 4,84,000
VAT 12% 58,080
Price to customer 5,42,080

Here, the Dealer Cost is Rs.4,40,000/-, including excise duty and

infrastructure cess of Rs.40,000/-. The law does not permit excise duty
and cess paid on purchases to be set off against the dealer‟s liability,
adding to the overall cost. Rs. 40,000 is included while determining the
sale price (10% margin is added), and taxed once again when the sale is
affected. This results in tax cascading down to the end customer, and an
increase in the cost of the car.

GST Tax Structure:

Example of Car: GST

Cost of Manufactures 4,00,000
Margin @ 10 % 44,000
Sale Price for delear 4,44,000
CGST@11% 48,400
57
 SGST@11% 48,400
Price to customer 5,36,800
Tax liability :
Saving to Consumer 5,280
the example, the taxes paid by dealer (CGST + SGST) to manufacturer is not
added to cost. This is because GST allows the dealer to set off the tax liability
of CGST+SGST. This is one of the fundamental features of GST, which allows
seamless credit from manufacturer to dealer, and eliminates the cascading
effect.

58
Findings

59
7.1 Findings:
 The majority of respondents believed that life has become simpler due to
GST, indicating a positive perception.

 When asked about the impact of GST on their lives, the majority of
respondents rated it as BEST

 A majority of respondents found the process to file GST returns easy,

 The majority of respondents viewed the impact of GST on the Indian

economy positively,

 When asked to rate GST on a scale of 1 to 5 stars, the majority of

respondents gave it 5 stars,

 The implementation of GST has led to changes in tax rates for various
products, affecting their prices differently.

 The FMCG sector is expected to benefit from lower tax rates under GST,
leading to reduced prices of consumer goods.

 Traders are likely to benefit from reduced compliance costs and increased
competitiveness.

 The manufacturing sector stands to benefit from lower taxes, simplified

tax structures, and improved supply chain efficiency.

 The impact of GST on the agricultural sector includes improved supply

chain mechanisms, reduced wastage, and potential inflationary pressure
on processed food items.

 The pharmaceutical industry may benefit from seamless transition of

credit balances, refund of accumulated credit, and improved supply chain
efficiency under GST.

 The retail sector, particularly FMCG firms, will see varying impacts
based on product mix and tax rate changes.

60
 The transport sector is expected to become more efficient with reduced
logistics costs and streamlined interstate transportation under GST.

 The textiles industry may experience higher tax rates under GST,
potentially impacting manufacturing costs.

 These findings highlight the diverse impacts of GST implementation

across different sectors of the Indian economy, with varying implications
for businesses, consumers, and economic growth.

61
Conclusion

62
8.1 Conclusion:
. The report highlights the positive outcomes of GST, such as simplifying the
tax structure, enhancing the tax base, and improving ease of doing business. It
emphasizes the successful removal of impediments to inter-state trade and the
unification of the Indian market under the vision of "one nation, one tax, and
one market." Despite these achievements, challenges remain, including the need
for capacity building among small-scale manufacturers and traders and
addressing compliance costs to fully realize the benefits of GST.

The historical background of GST implementation in India is traced back to the

early discussions on a Value Added Tax (VAT) at the state level in the 1980s.
The journey towards GST culminated in the introduction of the GST Bill in the
Lok Sabha in 2011, facing opposition and delays before finally being passed in
2017. The report details the formation of the GST Council, the rates and
regulations governing GST, and the introduction of initiatives like the e-Way
Bill system to streamline the taxation process.

Furthermore, the report sheds light on the impact of GST on various sectors,
including the FMCG industry, travel time in interstate movement, and the
elimination of check posts, leading to more efficient transportation of goods. It
discusses the revenue distribution mechanism of GST, where revenue earned
from intra-state transactions is shared equally between the central and state
governments. The report also touches on recent amendments like the QRMP
Scheme and the challenges faced by the central government in compensating
states for revenue losses.

In conclusion, the project report provides a comprehensive overview of the

impact of GST on the Indian economy, highlighting both the successes and
challenges associated with this significant indirect tax reform.

63
Bibliography

64
9.1 Bibliography:
https://www.gst.gov.in/

https://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India)

https://en.wikipedia.org/wiki/Economy_of_India

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

http://www.gstseva.comhttps://economictimes.indiatimes.comhttps://
www.google.co.in/search?q

65
 PROJECT WORK- PROGRESS REPORT
Name of the Student: Vinayak Subhash Padave Class & Roll No.: MMS B - 99

Project Guide: Prof. Samidha Angne

Project Title : Impact of GST on Indian Economy.

Next
Sr. Student Project Guide
Date Topic Discussed Meeting
No. Signature Signature
Date

66
67
 FUNCTION MANAGEMENT PROJECT SYNOPSIS FORMAT

Student Name: Vinayak Subhash Padave Class & Roll No.: M.M.S & B - 99

Specialization: Finance

PROJECT TITLE:
A Study of Fundamental Analysis of Private Banking Sector in India.

1. OBJECTIVES OF THE PROJECT:

 To analyze the financial performance and stability of selected banks within the
private banking sector.
 To identify key financial indicators and ratios relevant for evaluating the
fundamental health of banks.
 To assess the comparative financial strengths and weaknesses of different banks
operating within the sector.
 To provide insights into the investment potential and risk profiles of banks for
investors and stakeholders.

2. LIMITATIONS OF THE PROJECT:

 Scope of analysis
 Economic and regulatory factors

3. METHODOLOGY TO BE USED:

 Data Collection
 Selection of Banks
 Fundamental Analysis

4. SOURCE/S OF DATA:
 Sources of Primary Data: Survey

 Sources of Secondary Data: Annual Reports, Regulatory Filings, Financial

Databases And Industry Reports.

5. PRIMARY DATA COLLECTION INSTRUMENT:

(Approved/Not Approved) Date:

Project Guide: Name & Signature: Prof. Samidha Angne

68