Page 1 of 4

Journal for Studies in Management and Planning

Available at

http://edupediapublications.org/journals/index.php/JSMaP/

ISSN: 2395-0463

Volume 03 Issue 11

October 2017

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 259

Gst: A Financial Review: Difficulties And Effect

Ahead

THADOOR PHANI PRIYANKA

MBA

Abstract – Products and administration is extremely thorough assessment structure when executed at the national

level. It is one of the noteworthy advances towards the improvement of the nation. It is one of the greatest

assessment transformations which is good to go to incorporate the state and national economy to help the general

development of the nation. Directly organizations and organizations pay numerous assessments which expand the

cost of item and furthermore hamper the benefit level of the organization. Numerous assessment and complex tax

collection framework is one of the greatest obstacles for monetary development of the nation. Once the GST

framework is connected their eventual single duty framework which would record a noteworthy advancement in

complete backhanded tax collection change. Under the GST framework their eventual just on rate pertinent for the

two merchandise and enterprises. GST will make a business well disposed condition, as costs will fall and it would

likewise control the swelling rates.

Key Words: Goods and service tax, economic development, Indian economy and value added tax.

I. INTRODUCTION

Tax collection plays an imperative in financial

advancement of nation. With much anticipated GST

framework and top to bottom investigation, here we

are with last GST charge go by the parliament. Since

charges are implies for financing people in general

merchandise since they can't be appropriately

estimated in the market. Furthermore, government is

just the wellspring of subsidizing utilizing the tax

collection techniques. As charges are the drivers of

the economy. Duty administrations ought to be

planned in such a way, to the point that is does not

turn into the wellspring of mutilation in the market or

result in disappointment of market. Raising an

adequate measure of income is fundamental point of

assessment law in productive, successful and fair

way. Expense strategies are critical supporter of the

economy in both the cases effectiveness and value.

Great expense framework should keep in see the

issues of pay dispersion and furthermore centered on

methodologies to produce impose incomes to help

government uses on open administrations and

infrastructural improvement. GST remains for

Merchandise and Administration Expense.

Household exchange expense will be demanded as

esteem included assessment all merchandise and

ventures, practically speaking with a few exclusions.

VAT exempts all information sources including

capital products. Also it is general expense is on

household utilization. Essentially there is have to

change the tax assessment design, as twofold tax

collection framework demotivates the buyer from

utilization of items. It additionally impacts spending

example of open. Advancement of the economy

relies upon the buying energy of the nation. GST is

helpful and financially proficient method for

exhausting the utilization. Essentially there are not

very much exclusion since it has single rate and it

turns into a corresponding assessment on utilization.

One level of assessment is productive method for

accumulation, on the grounds that it either goes to the

state or focal level. Numerous level of duty is

contortion if there should be an occurrence of goal of

assessment gathering. Expense ought to go to the

state in which the concerned customer lives. This will

naturally occur if assess is exacted at the focal level

or state is in unitary level with the unparalleled level

of expense gathering. On the off chance that GST

must be actualized at focal level i.e. in one level, it

needs to confront many difficulties at focal level.

1.1 Literature Review

Poonam, 2017 in her study, she had cleared that GST

would be a very important step in the field of indirect

taxation. The cascading and double taxation effects

can be reduced by combing central and state taxes.

Consumer’s tax burden will approximately reduce to

25% to 30% when GST is introduced. After

introduction of GST concept, Indian manufactured

products would become more and more competitive

in the domestic and international markets. This

taxation system would instantly encourage economic

growth.GST with its transparent features will prove

easier to administer .In this paper the author has tried

to attempt to spot the concept of GST & its current

status in India. Paper has tried to give information

Page 2 of 4

Journal for Studies in Management and Planning

Available at

http://edupediapublications.org/journals/index.php/JSMaP/

ISSN: 2395-0463

Volume 03 Issue 11

October 2017

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 260

about GST system. The study also aims to be familiar

with the advantages and challenges of GST in Indian

scenario.

Shefali Dani has proposed that GST regime is a half- hearted attempt to rationalize indirect tax structure.

Approximately more than 150 countries have

implemented GST concept. As per researcher

government of India must study the GST regime set

up by various countries and also their fallouts before

implementing GST. IT is the need of hour that, the

government must make an attempt to insulate the vast

poor population of India, against the inflation due to

implementation of GST. There is no doubt, GST will

simplify its existing indirect tax system and will have

to help to remove inefficiencies created by the

existing current heterogeneous tax system, only if

there is a clear consensus over issues of threshold

limit, revenue rate, and inclusion of petroleum

products, electricity, liquor and real estate.

II. RESEARCH PROBLEM

The concept of Goods and Service Tax (GST) is one

of the biggest revolutions in decades around the

world. But it seems that India is taking very slow

steps to meet target. This research intends to focus on

understanding concept of goods and service tax and

its impact on Indian economy.

Objectives of The Study

1. To study the concept of Goods and Services Tax

(GST)

2. To study the impact of GST on Indian Economy

3. To understand how GST will work in India.

Research Methodology

The study focuses on study of Secondary data

collected from various books, national &

international journals, government reports,

publications from various websites which has been

published and focused on various aspects of Goods

and Service tax.

Concept of Goods and Service Tax

GST or Goods and Services Tax is applicable on

supply of goods and services. It will replace the

current taxes of excise, VAT and service tax.

Currently there are different VAT laws in different

states. This creates problems, especially when

businesses sell to different states. Also, most

businesses have to pay and comply with 3 different

taxes – excise, VAT, and service tax.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. 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.

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. Supply of

goods and services are base for charging tax. GAT is

very comprehensive indirect taxation system on

manufactured product and services, sale and

consumptions of goods and services at national

level.GST is going be one of the biggest tax reforms

after independence till the date. GST is very

comprehensive indirect taxation system on goods

manufactured and services provided. It is one of the

biggest tax reforms 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.

GST – How It Works In India?

GST is based on the grounds of VAT. Same set-off

system is also available in the respect of the taxes

paid in the previous level against GST charged at

time of sale. Following are some of the module of

GST.

Components: GST will be basically divided

into two components i.e. namely, Central Goods and

Service Tax and also State Goods and Service.

Page 3 of 4

Journal for Studies in Management and Planning

Available at

http://edupediapublications.org/journals/index.php/JSMaP/

ISSN: 2395-0463

Volume 03 Issue 11

October 2017

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 261

Applicability: GST will be also applicable to

all the Goods and Services sold and provided in

India, only except from the list of exempted goods

which fall outside its purview.

Payment: At central and State level GST will be paid

separately.

Credit: The facility of Input Tax Credit at

Central level will only be available in respect of

Central Goods and Service tax.

Impact of GST on Indian Economy

Expect reduction in prices of:

 FMCG goods such as shampoos, chocolates

 Eating out

 Small cars

 DTH

Increase in prices of:

 Luxury cars

 Tobacco

 Aerated beverages

 Textiles

Advantages of GST

For Citizen

Simpler tax system

 Reduction in prices of goods and services

due to elimination of cascading.

 Uniform prices throughout the country.

 Transparency in taxation system.

 Increase in employment opportunities.

For Trade/Industry

 Reduction in multiplicity of Taxes

 Mitigation of cascading /double taxation

 More efficient neutralization of taxes

especially for exports

 Development of common national market.

 Simpler tax regime-fewer rates exemption.

For Central/ State Governments.

A unified common national market to boost Foreign

Investment and “Make in India” campaign

Boost to export /manufacture activity, generation of

more employment, leading to reduced poverty and

increased GDP growth.

Improving the overall investment climate in the

country which will benefit the development of the

states.

Uniform SGST and IGST rates to reduce the

incentives for tax evasion.

Reduction in compliance costs as no requirement of

multiple records keeping.

Challenges of GST in Indian Context

GST will be the biggest reform in Indian taxation

since 1947, but there are many challenges for its

successful implementation. These are as under

 Consent of States: For implementing it is

critical that GST bill is passed by the

respective state Governments in state

assemblies so as to bring majority. This is a

herculean task.

 Revenue Neutral Rate (RNR): It is one of

Prominent Factor for its success. We know

that in GST regime, the government revenue

would not be the same as compared to the

current system. Hence, through RNR

Government is to ensure that its revenue

remains the same despite of giving tax

credits.

 Threshold Limit in GST: While achieving

broad based tax structure under GST, Both

empowered committee and Central

Government must ensure that lowering of

threshold limit should not be a “taxing”

burden on small businessmen in the country

 Robust IT Network: Government has

already incorporated Goods and service tax

network (GSTN). GSTN has to develop

GST portal which ensure technology support

for GST Registration, gst return filing, tax

payments, IGST settlements etc. Thus there

should be a robust IT backbone

 Extensive Training to Tax Administration

Staff: GST is absolutely different from

existing system. It, therefore, requires that

tax administration staff at both Centre and

state to be trained properly in terms of

concept, legislation and Procedure.

Additional Levy on GST: The Purpose of additional

Levy is to compensate states for loss of revenue

while moving to GST. We acknowledge that

fundamental purpose of GST is to make “INDIA” as

one state where inter-state movement of goods is

common. In this situation, it would defeat the very

purpose of GST in the country.