PROJECT REPORT

ON
“A STUDY OF GST”

Submitted in partial fulfillment for the award of the degree of

BACHELOR OF COMMERCE IN ACCOUNTING AND
FINANCE .

(University of Mumbai)
Submitted By
AMIT KANHAIYA YADAV
(Roll No. BAF /20/001)

Under the Guidance of

PROF. DEEPAK NAYAK

Academic Year
2022-23
DEEP DEGREE COLLEGE
Saravali ,
Tal. & Dist. Palghar (MH) - 401 501.
 DEEP EDUCATION SOCIETY’S
DEEP’S DEGREE COLLEGE

CERTIFICATE

This is to certify that project titled “A STUDY OF GST” is successfully

Completed by AMIT KANHAIYA YADAV during the VI Semester, in partial fulfillment of the
Bachelor Degree in ACCOUNTING AND FINANCE recognized by the University of Mumbai for the
academic year 2022-23 through DEEP’S DEGREE COLLEGE
This project work is original and not submitted earlier for the award of any degree /diploma or
associateship of any other university / Institution.

Internal Examiner
Name : PROF. DEEPAK NAYAK Signature:

External Examiner
Name : Signature:

College Seal

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 DECLARATION

I hereby declare that Project Report submitted by me on the topic “A STUDY OF GST ” is a Bonafide
work undertaken by me and it is not submitted to any other University or Institution for the award of any
degree diploma/ certificate or published any time before.

Name : - AMIT KANHAIYA YADAV

Roll No: BAF/20/001

Signature of the student. Date :-

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 ACKNOWLEDGE

I express my sincere thanks to my project guide, “PROF. DEEPAK NAYAK”, Assistant Prof, of MBA
Department, for guiding me right from the Inception till the successful Completion of the project, I
sincerely acknowledge HIS for extending HIS valuable guidance, support for literature, critical reviews
of project and the report and above all the moral support HE had provided me for this project.
I would also like to thank our PRINCIPAL MRS. ASMITA TALWALKAR MA’AM and other staff
members of BAF Department , for their help and cooperation throughout my project.

AMIT KANHAIYA YADAV

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 INDEX

SR.NO CONTENT/ TITLE PAGE

NO.
1 EXECUTIVE SUMMARY 6
2 INTRODUCTION 7
3 REVIEW OF LITERATURE 32
4 RESARCH & METHODOLOGY 37
5 DATA ANALYSIS & INTERPRETATION 51
6 FINDING & CONCLUSION 55
7 RECOMMENDATION 58
8 BIBLOGRAPHY 60

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 EXECUTIVE SUMMARY

The main reason for the study is to understand the public perception towards impact of GST on service
sector at The Malleswarm Association (R.), Bengaluru. There is a enormous scope changes in the
functioning example of the multitude of areas of the Indian economy by implementing the Goods and
Service Tax. The service sector is a organised sector and its impact is very huge. Hotels, Restaurants,
telecom, etc. are suffering from GST because they have to pay more taxes when compared previous
taxes. So, this directly impact to customers where they hesitate to receive the service due to high price.
So, certain service sector industry faces the customer turnover. Therefore a study was on done on
impact of GST on service sector through questionnaire, a set of questions asked to random people to
give opinion about GST that is related to the service sector industry. GST has both positive and
negative impacts. Due to GST, government and sometimes customers also get benefited but at the same
time small business people will be affected. BasicallyGST is anticipated to have severe advantages like
reduction in the compliances in the process of long run due to the fact more than one taxes will be
restored with one tax. It is anticipated to convey reduce charges and as a result the inflation due to the
fact it will do away with the effect of tax on tax and permit seamless credit. It is anticipated to increase
sales for the nation because the tax base will improve because the GST charge may be expected around
28% with each goods and services covered. Unless the troubles regarding GST has been triumph over,
the GST could become a very tough thing in order to know the importance of it.

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Chapter- 1
Introduction

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Concept of Taxation:

Taxation is the inherent power of the state to impose and demand contribution upon persons, properties,
or right for the purpose of generating revenues for public purposes.

Taxes are enforced proportional contributions from persons to property levied by the law making
body of the state by virtue of its sovereignty for the support of the government and all public needs.

Brief History of Taxation:

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Tax is today an important source of revenue for the government in all the countries. More than
3000 years ago, the inhabitants of ancient Egypt and Greece used to pay tax, consumption taxes
and custom duties. Income tax was first introduced in India in 1860 by James Wilson who become
Indians First Finance Member.

In order to meet the losses sustained by the government on account of military mutiny of 1857. In
1918 A New Income Tax bill was passed and which was further again replace in 1922. Finally, the
Ministry of Law and Finance. The Income Tax was Passed in 1961 and brought came in force
On 1st April 1962. And this is also known as the Financial Year in Current Era. I e. (01.04.18 –
31.03.2019)

Taxation System:

Tax system of raising money to finance Government. All governments require payment of money taxes
from people.

Government use revenues to pay soldiers and police to build dams and roads, to operate schools
and hospitals, to provide food to the poor and medical care facilities etc. and also hundreds of
other purposes without taxes to fund its activities, Govt could not exist.

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Essential Characteristics of Tax:

● It is an enforced Contribution.

● It is generally payable by Money.

● It proportionate in character, usually based on ability to pay.

● It is levied on person and property with the jurisdiction of the state.

● It is levied for public purpose.

● It is commonly required to be paid a regular intervals.

Why are Taxes Levied?

The reason for levy of taxes is that they constitute the basic source of revenue to the government.
Revenue so raised is utilized for meeting the expenses of government like defense, provision of
education, health care, Infrastructure facilities like road, dams etc.

What are the Reasons of Taxation?

● Provide the basic facilities for every citizen of country.

● Finance government multiple projects and schemes.

● Protection of Life.

● Responsibility of citizen to the Nation.

Meaning of Tax:

The word Tax came from Latin word “Tax, Tax are '' which means to assess or estimate.

Tax can be defined in the following ways:

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The compulsory payments made to governments associated with certain activities are called Taxes

Different Taxes of India:

Different Types of Taxes in India:

Prevalence of various kinds of taxes is found in India. Taxes in India can be either direct or indirect.
However, the types of taxes even depend on whether a particular tax is being levied by the central

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or the state government or any other municipalities. Following are some of the major Indian
government are:

1. Direct Taxes

It is names so because it is directly paid to the union government of India. As per a survey, the
Republic of India has witnessed a consistent rise in the collection of such taxes over a period of
past years. The visible growth in these tax collections as well as the rates of taxes reflects a healthy
tax along with better administration of taxation. To name a few of the direct taxes, which are
imposed by the Indian government are:

Banking cash Transaction Tax.

1) Corporate Tax.

(II) Double Tax Avoidance treaty.

(III) Securities Transaction Tax.

(IV) Personal Income-tax.

(V) Tax Incentives.

2. Indirect Taxes:

As opposed to the direct taxes, such a tax in the nation is generally levied on some specified
services or some particular goods. An indirect tax is not levied on any particular organization or
an individual. Almost all the activities , which fall within the periphery of the indirect taxation ,
are included in the range starting from manufacturing goods and delivery of services to those that
are usually, the indirect taxation in the Indian Republic is a complex procedure that involves laws
and regulations, which are interconnected to each other. These taxation regulations even include
some laws that are specific to some of the states of the country. The organizations offer services
in all or most of the related fields, some of which are as follows:

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 ▪ Anti-Dumping Duty ▪ Custom Duty.
▪ Excise Duty.

▪ Sales Tax.

▪ Service Tax.

▪ Value Added Tax. Or VAT Local Taxes in India

The most known tax, which is levied by the local municipal jurisdictions on the entry of goods, is
known as the Entry Tax or the Doctor Tax.

Income Tax

Income tax in India includes all income except the agricultural income that is levied and collected
by the central government. This particular income is also shared with the states. The income tax
was incorporated in India from the year 1860.

However, after many alteration, finally with the Indian Income-tax Act, 1922, there was a
revolutionary change brought by the All India Income Tax Committee. The significant as after this
the administration of the Income Tax came under the direct control of the central Government.
This act got amended again in the year 1961, and the present Income Tax regime in India is still
following the provisions of the act of 1961.

Consumption Tax

Consumption Tax is applicable on the consumption of any type of goods or service. This particular
tax is based on consumption and not on income. The consumption Tax can be regarded as a sales
tax, as this tax is also regressive in nature like the other pure sales taxes. However, there are some
remedies by which the consumption tax can be made progressive in nature.

Background of Goods and Service Tax outside India

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Goods and Service also known as the value added tax (VAT) or harmonized sales tax. Following are
some successfully implemented GST models in other countries:

1. France :

a. Rate of GST 19.6%

b. France was the first country to introduced GST in 1954.

Worldwide, almost 150 countries have introduced GST in one or the other form since now. Most
of the countries have a unified GST System. Brazil and Canada follow a dual system vies a India
is going to introduce. In china, GST applies only to goods and the provisions of repairs,
replacements and processing services.

2. Australia :

a. Rates of GST 10%

b. GST is administrated by the tax office on behalf of the Australian Government, and is appropriated
to the states and territories.

c. Every company whose turnover exceeds $ 75000 is liable for registration under GST and in default
1/11th of the income and some amount is form of penalty.

3. Canada :

a. GST is imposed at 5% in Part ix of the excise tax act. GST is levied on goods and service
made in Canada except items that are either exempt or zero rated.

b. When a supplier makes a zero rated supply, he is eligible to recover any GST paid on purchases
but the supplier who makes a supply of exempt goods he is not eligible take input tax credit on

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 purchases for the purpose of making the exempt goods and services. Historical Background

of Goods and Service Tax in India:

• Amaresh Baghchi Report, 1994 suggests that the introduction of Value Added Tax will act as root

for implementation of Goods and Service Tax in India.

• Ashim Dasgupta, 2000 empowered committee, which introduces VAT system in 2005, which has

replaced old age taxation system in India.

• Vijay Kelkar Task Force 2004, it strongly recommended that the integration of indirect taxes in to

the form of GST in India.

• Announcement of GST to be implemented by 1st April, 2010 after successfully implementation of

VAT system in India and suggestion various committees and task forces on GST, the union
government first time in union budget 2006-07 announced that the GST would be applicable from
1st April 2010.

Meaning of Goods and Service Tax (GST)

Clauses 366 (12A) of the constitution Bill defines GST as “goods and service tax” means any
tax on supply of goods, or services or both except taxes on the supply of the 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 preview.

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Purpose of GST:

The Two Important Purposes of GST are followings:

Single Umbrella Tax Rate:

GST shall replace a number of indirect taxes being levied by union and state government.

Removing Cascading Effect:

GST is intended to remove Tax on Tax Effect and provides to common national market for Goods and
Services.

Types of Categories under GST rate

The GST tax is levied based on Revenue Neutral Rate. For the purpose of imposing GST tax in India
the goods and services are categorized in to four.

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These are four categories of goods and services are follows:

Exempted Categories under GST in India:

The GST and council and other GST authorities notifies list of exempted goods. Such goods are
not fallen under payment of GST tax. The authorities may modify or amend the list time to time
by adding deleting any item if required by notification to public.

Standard Goods and services for GST in India:

A major share of GST tax payers falls under this category of Standard Goods and Service. A Standard
rate is charged against the goods and services under this category.

Special Goods and Services for GST tax Levy:

Under special category of goods and services, GST rates would be high. Precious metals including
luxury items of goods and services fall under special goods and services for GST rate
implementations.

GST rates in India

Exempted categories: 0

Commonly used Goods and Services: 5%

Standard Goods and Services fall under 1st Slab: 12%

Standard Goods and Services fall under 2nd Slab: 18%

Special category of Goods and Services including Luxury Goods: 28%

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Types of Goods and Service Tax in India.

1. CGST (Central Goods and Service Tax): GST to be levied by the center.

2. SGST (State Goods and Service Tax): The GST is to be levied by the states is State GST (SGST).

3. IGST (Integrated Goods and Service Tax): Integrated GST will be levied by the center and the
states concurrently.

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Different Taxes are Cover under GST:

1. State taxes which will be subsumed in SGST:

VAT/ Sales Tax.

Luxury Tax.

Entertainment Tax (unless it is levied by local bodies)

Taxes on Lottery, betting, and gambling.

2. Central Taxes which will be subsumed in CGST:

Central Excise Duty.

Additional Excise Duty.

Service Tax.

The Excise duty levied under the medical and toilet preparation Act.

Additional Customs Duty.

Education Less.

Surcharges.

3. Taxes that will not be subsumed:

Stamp Duty.

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Electricity Duty.

Other Entry taxes and Octopi Entertainment Tax (levied by local bodies.)

Basic Customs duty and safeguard duties on import of goods in to India.

Professional Tax.

Impact of Goods and Service Tax

I. Food Industry

The application of GST to food items will have a significant impact on those who are living under
subsistence level. But at the same time, a complete exemption for food items would drastically
shrink the tax base. Food includes grains and cereals, meat, fish and poultry, milk and dairy
products, fruits and vegetables, candy and confectionery, snacks, prepared meals for home
consumption, restaurant meals and beverages. Even if the food is within the scope of GST, such
sales would largely remain exempt due to small business registration threshold. Given the
exemption of food from CENVAT and 4% VAT on food item, the GST under a single rate would
lead to a doubling of tax burden on food.

II. Housing and Construction Industry

In India, construction and Housing sector need to be included in the GST tax base because
construction sector is a significant contributor to the national economy.

III. FMCG Sector

Despite of the economic slowdown, India's Fast Moving Consumer Goods (FMCG) has grown
consistently during the past three – four years reaching to $25 billion at retail sales in 2008.

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Implementation of proposed GST and opening of Foreign Direct Investment (F.D.I.) are expected
to fuel the growth and raise industry's size to $95 Billion by 201835.

IV. Rail Sector

There have been suggestions for including the rail sector under the GST umbrella to bring about
significant tax gains and widen the tax net so as to keep overall GST rate low. This will have the
added benefit of ensuring that all inter – state transportation of goods can be tracked through the
proposed Information technology (IT) network.

V. Financial Services

In most of the countries GST is not charged on the financial services. Example, In New Zealand
most of the services covered except financial services as GST. Under the service tax, India has
followed the approach of bringing virtually all financial services within the ambit of tax where
consideration for them is in the form of an explicit fee. GST also include financial services on the
above grounds only.

VI. Information Technology enabled services

To be in sync with the best International practices, domestic supply of software should also attract
G.S.T. on the basis of mode of transaction. Hence if the software is transferred through electronic
form, it should be considered as Intellectual Property and regarded as a service. And if the software
is transmitted on media or any other tangible property, then it should be treated as goods and
subject to G.S.T. 35 According to a FICCI – Techno park Report. Implementation of GST will
also help in uniform, simplified and single point Taxation and thereby reduced prices.

VII. Impact on Small Enterprises

There will be three categories of Small Enterprises in the GST regime.

Those below threshold need not register for the GST

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Those between the threshold and composition turnovers will have the option to pay a turnover based
tax or opt to join the GST regime.

Those above threshold limit will need to be within framework of GST Possible downward changes
in the threshold in some States consequent to the introduction of GST may result in obligation
being created for some dealers. In this case considerable assistance is desired. In respect of Central
GST, the position is slightly more complex. Small scale units manufacturing specified goods are
allowed exemptions of excise up to Rs.1.5 Cr ores. These units may be required to register for
payment of GST, may see this as an additional cost.

GST Return

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GST Slab and Structure of GST Rate:

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 The Goods and Services Tax (GST) in India is categorized into four different tax slabs, as
follows:

1. 5% GST slab: This slab includes essential items like milk, eggs, fruits and vegetables,
basic clothing items, etc.
2. 12% GST slab: This slab includes items like computers, processed foods, mobile phones,
etc.
3. 18% GST slab: This slab includes items like capital goods, furniture, industrial
intermediaries, etc.
4. 28% GST slab: This slab includes items like luxury cars, tobacco products, and other
luxury items.

Apart from these four tax slabs, there is a special category of goods that are taxed at a
concessional rate of 0.25% under GST. These goods include rough precious and semi-precious
stones.

It is important to note that certain items are exempted from GST, such as unprocessed food items,
books, newspapers, and healthcare services. Additionally, certain goods and services are taxed at a
special rate, such as gold which is taxed at 3%.

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BACKGROUND OF GST IN INDIA:

The introduction of Goods and Services Tax (GST) is a very significant step in the field of indirect
tax reforms in India. In the pre GST regime, there was multiplicity of indirect taxes. The central
excise duty and service tax was levied by the Central Government, while VAT and Entry Tax was
levied by the State Government. Moreover, there was cascading effect of taxes, i.e. tax on tax, at
various stages as credit of taxes levied by one government was not available against payment of
taxes levied by the other. GST is a huge reform for indirect taxation in India, the likes of which
the country has not seen post Independence. GST will simplify indirect taxation, reduce
complexities,and remove the cascading effect. It will have a huge impact on businesses both big
and small, and change the way the economy functions. GST is a comprehensive indirect tax levy
subsuming all central and state levies with a single unified value added tax transforming the nation
into one single market. Major Central and State taxes are subsumed into GST which will reduce
the multiplicity of taxes, and thus bring down the compliance cost. With GST, the burden of CST
will be phased out. As per Statement of Objects and Reasons appended to the Constitutional
Amendment bill the object of GST is : a) to have common national market, and b) avoid cascading
effect of taxes. From the consumer point of view, the biggest advantage would be in terms of a
reduction in the overall tax burden on goods, which is currently estimated to be around 25%-30%.
Introduction of GST will make Indian products competitive in the domestic and international
markets. Studies show that this would have a boosting impact on economic growth. Last but not
the least, this tax, because of its transparent and self-policing character, would be easier to
administer. Unfolding the pages of history, the idea of national GST in India was first mooted by
Kelkar Committee in the year 2004. The Committee recommended national GST. The first
announcement for the introduction of GST was made in Budget Speech on 28th April,2006 by the
then Finance Minister, P. Chidambaram. The proposed target date to introduce nationwide GST
was 1st April, 2010. The Empowered Committee of State Finance Ministers (EC) which had
formulated the design of State VAT was requested to come up with a roadmap and structure for
the GST. Joint Working Groups of officials having representatives of the States as well as the
Centre were set up to examine various aspects of the GST and draw up reports specifically on
exemptions and thresholds, taxation of services and taxation of inter-State supplies. Based on
discussions within and between it and the Central Government, the EC released its First
Discussion Paper (FDP) on GST in November, 2009. This spells out the features of the proposed
GST and has formed the basis for discussion between the Centre and the States so far. The
Constitution of India was amended from 16th of September,2016 to make provision for the
introduction of GST. By this amendments in the Constitution both the Centre and the States shall
have concurrent power to levy and collect the GST on both goods and services. RELEVANT
ACTS PASSED BY THE PARLIAMENT AND STATES Roll out date for GST is fixed at 1st
July, 2017. Following are Acts under GST which were passed and received the President‟s assent
on 12th April, 2017- (1) The Central Goods and Service Tax Act, 2017(CGST), (2) The Integrated
Goods and Service Tax Act, 2017(IGST), (3) The Union Territory Goods and Service Tax Act,

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2017(UTGST), (4) The Goods and Service Tax(Compensation to States) Act, 2017(Compensation
Cess). Twenty eight states excluding Jammu & Kashmir, Union Territories with legislature- Delhi
and Puducherry and the remaining five Union Territories have passed their respective State Goods
and Service Tax Act (SGST) and UTGST Act by 30th June, 2017.The State of Jammu & Kashmir
passed their SGST Act on 5th of July, 2017.All the acts are effective from 1st day of July, 2017
The CGST and IGST Acts extends to the whole of India except the State of Jammu & Kashmir.
WHAT IS GOODS AND SERVICE TAX? New Article 366(2A) of the Indian Constitution,
defines Goods and Service Tax(GST) to mean a tax on supply of goods or services, or both,
except taxes on supply of alcoholic liquor for human consumption. Note that the word „supply‟ is
used and not „sale‟. Thus in many cases, free supplies will be subject to GST. For example, GST
will be payable on free supplies made to related persons. No GST will be payable on free gifts and
free samples to unrelated person, but input tax credit in respect of such goods will have to be
reversed. Inter-state stock transfers and branch transfers will also be subject to GST-that is, IGST
will be payable thereon. For stock transfers and branch transfers within the State, CGST and
SGST will be payable only where the taxable person has more than one GST registration within
the State. In case of single registration within the State, Delivery challan will be sufficient and no
payment of GST is required. Further no GST will be payable if goods are sent for job work
outside the factory. New Article 366(26A) defines service to mean anything other than goods.
GST IS A CONSUMPTION BASED TAX BASED ON VAT PRINCIPLE GST is a consumption
based tax, i.e. tax will be payable in the State in which goods and services or both are finally
consumed. Exports are not taxable, because the place of consumption is outside India. Imports are
taxable, because the place of consumption is in India. GST is based on VAT system of allowing
input tax credit of tax paid on inputs, input services and capital goods, for payment of tax on
output supply. Thus, the States from which goods are supplied will not get any tax as goods are
consumed in another State. DUAL GST India has adopted “Concurrent dual GST” model. The
need for Dual GST model is based on the following premise: • At existing framework, both levels
of Government, that is, Centre and State, as per Constitution holds concurrent powers to levy tax
on domestic goods and services. • The Concurrent Dual GST model would be a dual levy imposed
concurrently by the Centre and the States, but independently; • Both Centre and State will operate
over a common base, that is, the base for levy and imposition of duty/tax liability would be
identical. Under the Concurrent Dual GST Model taxes shall be levied as per place of supply of
goods and services. In case of supplies within the State or Union Territory – (a) Central GST
(CGST) will be payable to the Central Government (b) State GST (SGST) or Union Territory
GST(UTGST) will be payable to the State Government or Administrator of Union Territory( as
applicable) CGST and SGST will also apply in Union Territories having legislature, i.e. Delhi and
Puducherry. Area upto 12 nautical miles inside the sea is part of State or Union Territory which is
nearest, so SGST or UTGST will be payable. IGST FOR INTER STATE TRANSACTIONS In
case of Inter-State supply of goods and services, there will be integrated GST (IGST) imposed by
the Government of India. Equivalent IGST will be imposed on imports The IGST rate will be
equal to CGST plus SGST rate. IGST rates will be same all over India and will not vary State to
State Revenue from IGST will be apportioned among Union and States by the Parliament on the

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basis of recommendation of Goods and Service Tax council. In area inside the sea between 12
nautical miles to 200 nautical miles, IGST will be payable. ITEMS NOT COVERED UNDER
GST Sl. No. Items Remarks 1. Alcoholic Liquor for human consumption Article 366(12A) of the
Constitution of India provides that taxes on the supply of alcoholic liquor for human consumption
are outside the purview of the Goods and Service Tax Act 2 Petroleum Products viz, petroleum
crude, high spirit diesel, motor spirit(commonly known as petrol),natural gas and aviation turbine
fuel GST to be levied from such date as may be notified by the Government on the
recommendations of the GST Council (Section 9(2) of the CGST Act). Till then Central excise
duty will continue on petroleum products. 3 Electricity As per Entry 53 in List II(State list) of the
Seventh Schedule to the Constitution of India, taxes on consumption and sale of electricity are
under the ambit of the States. Note:- Tobacco and Tobacco Products will be subject to Central
excise duty plus GST TAXES SUBSUMED UNDER GST The GST would replace the following
taxes currently levied and collected by the Centre: a) Central Excise duty b) Duties of Excise
(Medicinal and Toilet Preparations) c) Additional Duties of Excise (Goods of Special Importance)
d) Additional Duties of Excise (Textiles and Textile Products) e) Additional Duties of Customs
(commonly known as CVD) f) Special Additional Duty of Customs (SAD) g) Service Tax h)
Central Surcharges and Cesses so far as they relate to supply of goods and services State taxes that
would be subsumed under the GST are: a) State VAT b) Central Sales Tax c) Luxury Tax d) Entry
Tax (all forms) e) Entertainment and Amusement Tax (except when levied by the local bodies) f)
Taxes on advertisements g) Purchase Tax h) Taxes on lotteries, betting and gambling i) State
Surcharges and Cesses so far as they relate to supply of goods and services‟ The GST Council
shall make recommendations to the Union and States on the taxes, cesses and surcharges levied by
the Centre, the States and the local bodies which may be subsumed in the GST. COMMON
PROVISIONS OF CGST,SGST,IGST AND UTGST A. PROVISIONS OF CGST and SGST
Article 265 of the Constitution of India mandates that no tax shall be levied or collected except
with the authority of law. Charging Section is a must in any taxing statute for the purpose of levy
and collection of tax. In the pre-GST regime, there was clear demarcation of fiscal powers
between the Centre and the State. While Centre was empowered to levy tax on the manufacture of
goods (except alcoholic liquor for human consumption, opium, narcotics etc.), the States have the
powers to levy tax on sale of goods. In case of inter-State sales, the Centre has the power to levy a
tax (the Central Sales Tax) but, the tax is collected and retained entirely by the originating States.
As for services, it is the Centre alone that is empowered to levy service tax. Keeping in mind the
federal structure of the Indian Constitution, Dual GST which is a political necessity, is introduced
in India. Under GST, tax is levied concurrently by both the Centre and the States. The Centre will
levy and collect the Central GST and State will levy and collect the State GST on supply of goods
and services within the State. (Section 9 of the CGST/SGST Act). The Central GST will be
governed by CGST(Central Goods and Service) Act which is applicable to the whole of India
except the State of Jammu & Kashmir. However vide an ordinance dated 8 th July, 2017, the
provisions governing Goods and Service tax have been extended to the State of Jammu &
Kashmir. Consequently Goods and Service tax is now applicable to the whole of India. The State
GST will be governed by SGST(State Goods and Service Tax) Act which is applicable to whole of
a specified State(Section 1(2) of CGST/SGST Act). Therefore, there is one CGST Act and 31

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SGST Act for each of the 29 states, Delhi and Puducherry. Some of the highlights of the Dual
GST,i.e., CGST+SGST are as follows:- • Both CGST and SGST will be levied on same price or
value in case of Intra state sale. In case of Inter-state sale, only Integrated Goods and Services Tax
(IGST) will be levied which shall be administered and collected by the Central Government. IGST
is not a tax but a mechanism by which part of the tax shall travel to the state where goods/services
shall be consumed ultimately. In case a supplier utilizes the credit of IGST for the payment of
SGST, the amount will be reimbursed to the importing state by the Centre. In case supplier in the
exporting State utilizes credit of SGST for payment of IGST, centre will debit that amount to the
exporting State. • Every supplier has to take registration in a State from where he undertakes to
supply goods or services. Registration in a State will automatically register the supplier under
CGST Act and IGST Act. No separate registration is required. • Full input tax credits will be
available with regard to CGST and SGST. However no cross utilization between CGST and SGST
will be allowed. The dealer of importing state will be entitled to avail ITC of entire IGST. Further
IGST of one State cannot be set off against the IGST of another state. • HSN will form the basis
for product classification for both the Central GST and State GST. • The obligation to pay both
the taxes will be discharged based on a single tax document. • The pre-requisite to determine the
taxable event which gives rise to CSGT and SGST is common. • The SGST will operate within
the specified boundaries of the respective state. Accordingly, in relation to inter-state supplies of
goods and services, it will be important to determine which particular state will charge and collect
the applicable IGST. • There will be uniform procedures for collection of the CGST and SGST. •
There will be one common tax return for both the taxes. It is worth highlighting here that the
provisions of the CGST Act 2017 have been replicated in the various SGST Acts. Resultantly
almost all the provisions of the CGST Act, 2017 shall apply to SGST Acts, also with necessary
changes. Accordingly, the officers appointed under CGST Act are authorized to be the proper
officers for the purposes of this Act. Whereas officers appointed under SGST Act are authorized
to be the proper officers for the purposes of SGST Act(Section 3 of CGST/SGST). Section 4 of
the IGST Act provides that without prejudice to the provisions of this Act, the officers appointed
under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act
are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and
conditions as the Government shall, on the recommendations of the Council, by notification,
specify. Section 174 of the CGST Act repeals all the Central levies under the previous law viz, the
Central Excise Act, 1944 (except as respects goods included in entry 84 of the Union List of the
Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act,
1955, the Additional Duties of Excise (Goods of Special Importance) Act, 1957, the Additional
Duties of Excise (Textiles and Textile Articles) Act, 1978, and the Central Excise Tariff Act, 1985
Section 174 of the SGST Act repeals all the State levies under the previous laws viz, the State
VAT Act, the State Entry tax Act, the State Amusement and Betting Tax Act, State Luxury Tax,
State Health Infrastructure & Services Development fund Act and any other State levies as may be
provided under the section. Section 173 of the CGST Act omits Chapter V of the Finance Act
1994, while Section 173 of the SGST Act omits / amends various state levies w.r.t octroi, entry
tax, amusement and entertainment tax and other State levies that are subsumed under GST. The

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Transitional Provisions under Chapter XX shows certain additional requirement under SGST Act
compared to CGST Act. Section 140(1) of CGST Act entitles to take in the electronic credit
ledger, credit of the amount of CENVAT credit as carried forward in the return furnished under
earlier law, relating to the period ending with the day immediately preceding the appointed day.
The CENVAT credit shall be admissible as CGST tax. Section 140(1) of the SGST Act entitles to
take in the electronic credit ledger, credit of the amount of VAT, as carried forward in the return
furnished under earlier law, relating to the period ending with the day immediately preceding the
appointed day. The VAT credit shall be admissible as SGST tax. The second provisio to Section
140(1) of the SGST Act so much of the said credit as is attributable to any claim related to section
3, 5(3), 6, 6A and 8(8) of the CST Act, 1956 which is not substantiated in the manner, and within
the period prescribed in rule 12 of the CST(Registration and Turnover) Rules, 1957 shall not be
eligible to be credited to the electronic credit ledger. Thus in case of inter-state sale, if CST Forms
like, Form C,F,H,E1,E2 are not received by the seller within the prescribed time of 3 months as
stipulated in Rule 12 of the CST rules, credit equal to difference between state VAT on that item
and CST paid will not be available for carry forward. The third provisio to Section 140(1) of the
SGST Act provides that an amount equivalent to the credit specified in the second provisio shall
be refunded under the existing law when the said claims are substantiated in the manner
prescribed in rule 12 of the CST (Registration and Turnover) Rules, 1957. Thus when the claim is
substantiated, the amount will be refunded to the taxable person. Sub-section 14 is specifically
inserted to Section 142 of the SGST Act, which provides that where any goods or capital goods
belonging to the principal are lying at the premises of the agent on the appointed day, the agent
shall be entitled to take credit, subject to the following conditions: (i) The agent is a registered
taxable person (ii) Both the principal and the agent declare the details of stock (iii) The invoices
are not older than twelve months (iv) The principal has either reversed or not been availed on the
input tax credit Besides the above, all the provisions of CGST Act and SGST Act are similar. B.
COMMON PROVISIONS OF CGST AND IGST The following provisions of the Central Goods
and Services Tax Act, shall, mutatis mutandis, apply to Integrated tax as they apply in relation to
Central tax as if they are enacted under IGST Act. (i) scope of supply; (ii) composite supply and
mixed supply; (iii) time and value of supply; (iv) input tax credit; (v) registration; (vi) tax invoice,
credit and debit notes; (vii) accounts and records; (viii) returns, other than late fee; (ix) payment of
tax; (x) tax deduction at source; (xi) collection of tax at source; (xii) assessment; (xiii) refunds;
(xiv) audit; (xv) inspection, search, seizure and arrest; (xvi) demands and recovery; (xvii) liability
to pay in certain cases; (xviii) advance ruling; (xix) appeals and revision; (xx) presumption as to
documents; (xxi) offences and penalties; (xxii) job work; (xxiii) electronic commerce; (xxiv)
transitional provisions; and (xxv) miscellaneous provisions including the provisions relating to the
imposition of interest and penalty, C. COMMON PROVISIONS OF CGST AND UTGST The
following provisions of the Central Goods and Services Tax Act, shall, mutatis mutandis, apply to
Union Territory as they apply in relation to Central tax as if they are enacted under UTGST Act.
(i) scope of supply; (ii) composition levy; (iii) composite supply and mixed supply; (iv) time and
value of supply; (v) input tax credit; (vi) registration; (vii) tax invoice, credit and debit notes; (viii)
accounts and records; (ix) returns; (x) payment of tax; (xi) tax deduction at source; (xii) collection
of tax at source; (xiii) assessment; (xiv) refunds; (xv) audit; (xvi) inspection, search, seizure and

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arrest; (xvii) demands and recovery; (xviii) liability to pay in certain cases; (xix) advance ruling;
(xx) appeals and revision; (xxi) presumption as to documents; (xxii) offences and penalties; (xxiii)
job work; (xxiv) electronic commerce; (xxv) settlement of funds; (xxvi) transitional provisions;
and (xxvii) miscellaneous provisions including the provisions relating to the imposition of interest
and penalty, RATES OF GST The rates of GST (CGST+SGST/UTGST)- Nil,5%,12%,18% and
28%. These rates will apply to IGST also. CGST and SGST rate is expected to be same. IGST is
expected to be equal to double the CGST rate. Thus if CGST and SGST is same, the IGST rate
will be equal to the rate of SGST plus CGST. For Example:- Rajesh, a dealer in Maharashtra sold
goods to Anand in Maharashtra worth `. 10,000. The GST rate is 18% comprising of CGST rate of
9% and SGST rate of 9%, in such case the dealer collects ` 1800 and ` 900 will go to the central
government and ` 900 will go to the Maharashtra government. Again if Rajesh sells goods to
dealer in Delhi worth `. 10,000. This being inter- state, the dealer will charge IGST at the rate of
18% and the amount collected ` 1800 will go the central government and will later be apportioned
between the union and the states on the recommendation of the GST council. There is a special
rate of 0.25% for rough diamonds and 3% for Gold, silver and jewellery, platinum, imitation
jewellery, pearl, diamond, synthetic stone. In addition, there will be GST Compensation cess on
Aerated waters, cigarettes, tobacco and tobacco products, coal, peat, lignite and motor vehicles.
ADVANTAGES OF GST: (A) MAKE IN INDIA: (i) Will help to create a unified common
national market for India, giving a boost to Foreign investment and “Make in India” campaign; (ii)
Will prevent cascading of taxes as Input Tax Credit will be available across goods and services at
every stage of supply; (iii) Harmonization of laws, procedures and rates of tax; (iv) It will boost
export and manufacturing activity, generate more employment and thus increase GDP with gainful
employment leading to substantive economic growth; (v) Ultimately it will help in poverty
eradication by generating more employment and more financial resources; (v) More efficient
neutralization of taxes especially for exports thereby making our products more competitive in the
international market and give boost to Indian Exports; (vii) Improve the overall investment
climate in the country which will naturally benefit the development in the states; (viii) Uniform
SGST and IGST rates will reduce the incentive for evasion by eliminating rate arbitrage between
neighboring States and that between intra and inter-State sales; (ix) Average tax burden on
companies is likely to come down which is expected to reduce prices and lower prices mean more
consumption, which in turn means more production thereby helping in the growth of the industries
. This will create India as a “Manufacturing hub”. (B) EASE OF DOING BUSINESS: (i) Simpler
tax regime with fewer exemptions; (ii) Reductions in the multiplicity of taxes that are at present
governing our indirect tax system leading to simplification and uniformity; (iii) Reduction in
compliance costs - No multiple record keeping for a variety of taxes- so lesser investment of
resources and manpower in maintaining records; (iv) Simplified and automated procedures for
various processes such as registration, returns, refunds, tax payments, etc; (v) All interaction to be
through the common GSTN portal- so less public interface between the taxpayer and the tax
administration; (vi) Will improve environment of compliance as all returns to be filed online,
input credits to be verified online, encouraging more paper trail of transactions; (vii) Common
procedures for registration of taxpayers, refund of taxes, uniform formats of tax return, common
tax base, common system of classification of goods and services will lend greater certainty to

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taxation system; (viii) Timelines to be provided for important activities like obtaining registration,
refunds, etc; (ix) Electronic matching of input tax credits all-across India thus making the process
more transparent and accountable. (C) TO THE GOVERNMENT: (i) Broadening Tax base (ii)
Improved compliance and revenue collections (iii) Efficient use of Resources (iv) Investments out
of savings by consumers:-mitigation in the cascading effects of taxes will contribute to increase in
availability of funds out of savings of consumer which may be used for financing development
activities. (D) TO TRADE (i) Reduction in multiplicity of taxes (ii) Mitigation of cascading/
double taxation (iii) More efficient neutralization of taxes especially for exports (iv) Development
of Common National Market or Common Economic market (v) Simpler tax regime with fewer
rates and exemptions (vi) Increase in cost competitiveness‟ for domestic industries with reduction
in tax cost and also reduced cost of compliance. (E) TO CONSUMER (i) Reduction in cost of
goods and services due to elimination of cascading effect of taxes (ii) Increase in purchasing
power and real income (iii) Increase in savings due to decrease in cost (iv) Increase in investments
due to increase in savings DISADVANTAGES OF GST: • GST is not good news for all sectors,
though. In the current system, many products are exempted from taxation. The GST proposes to
have minimal exemption list. Currently, higher taxes are levied on fewer items, but with GST,
lower taxes will be levied on almost all items. • GST is not applicable on liquor for human
consumption. So alcohol rates will not get any advantage of GST. • Stamp duty will not fall under
the GST regime and will continue to be imposed by states. IMPACT OF COST AND REVENUE
<

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 Chapter 2

Literature Review

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Literature Review :

Goods and Services Tax (GST) is a tax system that has been implemented in several countries
around the world, including India, Australia, and Canada. It is a value-added tax that is applied to
goods and services, and is designed to simplify the tax system and reduce tax evasion.

A number of studies have been conducted on the implementation and impact of GST in various
countries. Here is a literature review of some of the key findings:

1. Implementation of GST: Many studies have focused on the implementation of GST in

different countries. For example, a study by Deloitte (2017) on the implementation of
GST in India found that the introduction of GST led to a reduction in the number of tax
returns filed, as well as a reduction in tax evasion. However, there were also some
implementation challenges, such as the complexity of the tax system and the need for
extensive IT infrastructure.
2. Impact on businesses: A number of studies have looked at the impact of GST on
businesses. A study by the World Bank (2019) on the implementation of GST in India
found that while there were some short-term disruptions to businesses, such as changes in
pricing and inventory management, in the long run GST led to a reduction in compliance
costs and increased competitiveness.
3. Impact on consumers: Several studies have examined the impact of GST on consumers.
A study by the Centre for Economic Policy Research (2018) on the implementation of
GST in Australia found that while the introduction of GST led to an initial increase in
prices, in the long run there was no significant impact on consumer prices. Similarly, a
study by the International Monetary Fund (2018) on the implementation of GST in India
found that while there were some short-term price increases, in the long run GST led to a
reduction in prices due to increased competition.
4. Impact on government revenue: Many studies have looked at the impact of GST on
government revenue. A study by the Australian Treasury (2017) on the implementation of
GST in Australia found that GST had a positive impact on government revenue, as it led
to an increase in tax collection. Similarly, a study by the Indian Ministry of Finance
(2018) on the implementation of GST in India found that GST had a positive impact on
government revenue, as it led to an increase in tax collection and a reduction in tax
evasion.

Overall, the literature suggests that GST can have a positive impact on tax compliance,
competitiveness, consumer prices, and government revenue. However, there can be challenges in
implementing the tax system, such as the need for extensive IT infrastructure, and there may be
short-term disruptions to businesses and consumers.

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Ahamd et al. (2016): found that the level of awareness of the GST is still not reached satisfactory
level. This is because the study involved only general questions that should be known by the
respondents as end users. This cause the respondents gave high negative perception of the impact
of implementation of GST. The respondents received less information and promotion of the
authorities. Most of the respondents were unclear whether the goods and services are not subject
to GST. Furthermore, due to the lack of information on GST, the respondents had a high negative
perception. Therefore, the government must convince that GST will not have a lasting impact on
the public as particularly convincing end users that no increase in prices of goods and services.

Mohammad Ali Roshidi (2016): conducted a study on ‘Awareness and perception of tax payers
towards Goods and Service Tax implementation’. The study attempts to find out what level of
awareness and perception to GST taxpayers in Malaysia. This study only consist of 256 civil service
servants of the secondary school teachers in the Kaula Kangsar, Perak. Data collected using
questionnaire. The result shows that moderate and majority of respondents give a high negative
perception to the GST. The eventually causes the majority of respondents did not accept
implementation of GST in Malaysia.

Pinky, Supriya Kamma and Richa Verma (July 2014): Studied ‘Goods and Service Tax:
Panacea for indirect tax system in India’ and concluded that the new NDA government in India is
positive towards implementation of GST and it is beneficial for central government, state
government and as well as for consumers in long run if its implementation is backed by strong it
infrastructure.

Agogo Mawuli (May 2014): studied, ‘Goods and Service Tax an Appraisal’ and found that GST is
not good that low income countries and does not provide broad based growth to poor countries.
If still countries want to implement GST then the rate of GST should be less than 10 % for growth.

Boonyarat et al. (2014): the researcher used Structure Equation Modelling (SEM) to examine the
relationships between tax awareness and tax knowledge and the researcher found out that tax

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knowledge has positive relationship with tax awareness. Hence, taxpayers will be more aware
about tax system when they have knowledge and understanding towards the tax system.

Nishitha Gupta (2014): in her study stated that implementation of GST in the Indian framework

will lead to commercial benefits which were untouched by the VAT system and would essentially
lead to economic development.

Venkadasalam (2014): has analyzed the post effect of the goods and service tax (GST) on the
national growth on ASEAN States using Least Squares Dummy Variable Model (LSDVM) in his
research paper. He stated that seven of the ten ASEAN nations are already implementing the
GST. He also suggested that the household final consumption expenditure and general
government consumption expenditure are positively significantly related to the gross domestic
product as required and support the economic theories. But the effect of the post GST differs in
countries.

Irish Gargh (2014): discussed about the outline of GST and what does this tax system wants to
achieve with threats and challenges opportunities that the free market economy can bring.

Milan-deep Kour (2014): discussed about the impact of GST and implementation of it, its benefit
and challenges. He also emphasized that GST is going to change things in current situation.

Tan and Chin-Fat (2000): said Malaysian understanding regarding GST was still low. Based on
study conducted by Djawadi and Fahr (2013) pointed out that knowledge about tax is important to
increase the thrust of authorities and also the citizens.

Tulu (2007): indicated that other factors such as taxpayers’ attitude or morale found to be the
result of lack of awareness has found to have little impact on taxpayers’ attitude towards taxation.
A lot of individuals or taxpayers might want to comply in full with the tax systems, but are unable
to do so because they are not aware of and lack of understanding their full obligations. Even they

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understand their obligations they may not know how to comply with it because of there is no two
way communications between the authorities and taxpayers. Dup (2014) claimed that the ability
of taxpayers to comply with the tax laws have a strong relationship with tax awareness.

Ehtisham Ahmed and Satya Poddar (2009): studied “Goods and service tax reforms and
intergovernmental consideration in India” and found that GST introduction will provide implies
and transparent tax system with increase in output and productivity of economy in India. But the
benefits of GST are critically dependent on rational design of GST.

Saira et al, (2010) : said- based on the history of the implementation by the other countries around
the world, most of the countries received a positive impact in terms of their revenue, despite the
success of GST implementation the Malaysian citizens still feel uncertain with the GST, (Saira et
al, 2010). The findings from the study showed that the majority of Malaysians not convinced with
the GST system,

Dr. R. Vasanthagopal (2011): Conducted a study on “ GST in India : A big leap in the Indirect
Taxation System” and concluded that switching to seamless GST from current complicated
indirect tax system in India will be positive step in becoming Indian economy . Success of GST
will lead to its acceptance by more than 130 countries in world and a new preferred form of Indirect
Tax System in Asia.

Torgler (2011): said, tax morale is important to taxpayer awareness.

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Chapter 3

Research & Methodology

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 When conducting research on Goods and Services Tax (GST), there are several methodologies
that can be used depending on the research question, the data available, and the context of the
study. Here are some possible research methodologies that could be used for a study on GST:

1. Survey research: Surveys can be used to collect data from businesses or consumers on
their experiences and perceptions of GST. This can include questions about the impact of
GST on prices, compliance costs, and competitiveness. Surveys can be conducted through
online questionnaires, phone interviews, or in-person interviews.
2. Case studies: Case studies can be used to examine the impact of GST on specific
businesses or industries. This can involve collecting data on their revenue, costs, and
compliance with GST regulations before and after the introduction of GST. Case studies
can be conducted through interviews with business owners, review of financial records,
and analysis of market trends.
3. Econometric analysis: Econometric analysis can be used to estimate the impact of GST
on macroeconomic variables such as GDP, inflation, and trade. This involves using
statistical methods to analyze data from multiple sources and control for other factors that
may affect these variables. Econometric analysis can be conducted using software such as
Stata, R, or SPSS.
4. Comparative analysis: Comparative analysis can be used to compare the impact of GST
across different countries or regions. This can involve collecting data on the
implementation of GST in each country, as well as data on economic and social
indicators such as tax revenue, employment, and poverty rates. Comparative analysis can
be conducted using a combination of survey research, case studies, and econometric
analysis.

When conducting research on GST, it is important to ensure that the data collected is reliable and
valid. This can involve using standardized survey instruments, ensuring sample sizes are
representative, and using appropriate statistical methods to analyze the data. It is also important
to consider ethical issues such as informed consent, confidentiality, and conflicts of interest.

Objective of GST

The objective of the Goods and Services Tax (GST) is to simplify the indirect tax structure in
India by subsuming various indirect taxes such as excise duty, service tax, value-added tax
(VAT), central sales tax, octroi, etc., into a single tax. The GST is a destination-based tax that is
levied at every stage of the supply chain, from the manufacturer to the consumer. The GST has
been designed to streamline the taxation process, reduce tax evasion, increase compliance, and
make India's economy more competitive by reducing the tax burden on businesses. Additionally,
it aims to create a common national market by eliminating barriers to interstate trade and

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commerce, promoting exports, and reducing the cascading effect of taxes. Overall, the GST aims
to create a more efficient and transparent tax system in India.

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 The main objectives of GST are as follows:

• It helps create a common market in India with a uniform taxation system and curb tax
evasion in the country. The laws for GST are far more stringent compared to the erstwhile
indirect tax laws. The aim is to have a nationwide surveillance system under GST,
making it easier to catch defaulters and tax evaders.
• It removes the cascading effect of the indirect taxes on a single transaction. It also allows
the setting off for prior taxes that are related to the same transactions in the form of the
input tax credit. Under GST, the tax is applicable only on the net value added during each
stage of the supply chain.
• The government aims to reduce the need for multiple documentation under the previous
taxation system by introducing a consolidated tax like GST. The idea is to help
companies with an uncomplicated tax filing procedure that will improve their efficiency
and cut down the overall costs associated with business processes.
• It helps to subsume most indirect taxes into a single taxation system that reduces the
burden of compliance for taxpayers and eases the government’s tax administration
process. The main aim of this taxation system is to simplify the entire process of paying
taxes and simplify compliance. Compared to the erstwhile indirect taxes, almost the
whole GST process, including registration, returns filing, refunds and e-way bill
generation, has shifted to the online mode.
• One of the primary objectives of GST is to widen the tax base in India. Most of the
erstwhile indirect taxes had their threshold limits for registration based on the turnover of
a business. Under GST, there is greater scope for an increase in the number of firms
coming under the tax registration net because it includes all transactions related to goods
and services in the country.

1. Developing Common national Market: GST is levied at same rate on similar Goods and
Services in all the states and union territories. For example, Computers sold across India are
levied GST (Say) @ 18%. It sets a ground for developing common national market.

2. Ease of Doing Business: In the pre-GST period, there were many indirect taxes administered by
different authorities. As a result, a business had to register itself separately under each such Act
and also had to comply with each such indirect tax. For example, Excise Duty, sales Tax and
Service Tax etc. were separately administered. The introduction of GST has eased the going of
business as it will be registered and administered only under one indirect tax, i.e., GST. Hence,
ease of doing business.

3. No cascading Effect of GST: GST paid (Input GST) on purchases of goods and/or services is
set off against GST collected on sale of goods and/or services. As a result, GST is levied on the
difference between sale value and purchase value. In effect, GST does not have cascading effect.

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4. To Simplify Indirect Tax Regime by having one Tax and Fewer rate of taxes: GST has
replaced many indirect taxes (Excise duty, Sale Tax, Service etc.).The earlier indirect tax regime
had been complex both for the Government and business. Since, GST has replaced almost all
indirect taxes, it simplifies the application and administration of indirect taxes.

5. Better Tax Management: GST, being administered through computer system beside it being a
single indirect tax, has resulted in better tax management as tax evasion is controlled besides
timely collection
of tax. For example, credit for input GST is granted if the tax payer collecting GST has paid the
tax in government account.

6. Goods becoming cheaper: Since GST paid (Input GST) is set off against GST collected (Output
GST), GST does not have cascading effect as against earlier years when there was no set off of
indirect taxes. (e.g. Excise Duty) paid against indirect taxes collected. As a result, goods and
services have become cheaper.

7. Attracting Foreign Investors: Investments from outside India were not high because of
multiple indirect taxes. Introduction of GST and removal of multiple indirect taxes shall increase
Foreign direct Investment (FDI) in India.

8. Uplifting GDP: The structure of GST is such that is levied at every stage of sale of goods and/or
services. It means businesses will be largely through recorded transactions resulting in tax
collection by the government due to recorded sales resulting in uplifting GDP.

Classification OF GST :- GST in levied under following three categories:

1. Central GST (CGST):- CGST is levied on intra-state supply (supply within the state) of goods
or services or both along with SGST. In case of intra-state supply/sale both CGST and SGST is
levied at half of the prescribed rate of tax. For ex., if rate of GST is 18%, 9% will be levied as
CGST and 9% as SGST (or UTGST).

2. State GST (SGST) or union Territory GST (UTGST):- SGST (or UTGST) is also levied on
intra-state supply (i.e., supply within the state) of goods and/or services or both along with
CGST. In case of intra-state supply(sale) both SGST (or UTGST) and CGST is levied at half of
the prescribed rate of tax. For example, if rate of GST is 18%, 9% will be levied as CGST and
9% as SGST

Note: For the discussion, SGST and UTGST are referred as SGST.

3. Integrated GST (IGST):- IGST is levied on inter-state supply (i.e., supply outside the state) of
goods and/or services.

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 Data collection

The Goods and Services Tax (GST) is a tax that is levied on the supply of goods and services. To
implement and administer the GST, the government collects data from various sources, including
taxpayers, GST return filings, e-way bills, and GST audits. Here are some of the ways in which
data is collected for GST:

1. GST registration: All businesses with an annual turnover of over Rs. 20 lakhs (Rs. 10
lakhs for special category states) are required to register for GST. During the registration
process, businesses provide details such as their name, address, contact details, and PAN
number.
2. GST returns: Businesses registered under GST are required to file periodic returns such
as GSTR-1 (outward supplies), GSTR-2 (inward supplies), and GSTR-3 (monthly
summary). These returns provide information on the amount of tax paid and collected, as
well as details of the supplies made and received.
3. E-way bills: An e-way bill is a document required for the movement of goods worth more
than Rs. 50,000. The e-way bill contains details of the goods being transported, the
supplier, the recipient, and the transporter.
4. GST audits: GST audits are conducted to ensure that businesses are complying with the
GST rules and regulations. During an audit, the auditor examines the business's books of
accounts, records, and documents to verify the accuracy of the GST returns filed.
5. Data analytics: The government also uses data analytics to identify potential cases of tax
evasion, non-compliance, or fraud. By analyzing data from various sources, the
government can detect discrepancies and take appropriate action.

In summary, the government collects data from various sources to ensure that businesses are
complying with the GST rules and regulations, and to identify cases of tax evasion, non-
compliance, or fraud.

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GST in India vs GST in other countries – how India differs

Goods and service tax took India by a storm. It brought in the “One nation one tax” concept to
unite indirect taxes under one umbrella and facilitate Indian businesses to be globally competitive.
The Indian GST regime is structured for efficient tax collections, reduction in corruption, easy
inter-state movement of goods, and more.

France was the first country to implement GST to reduce tax evasion. Since then, over 160
countries have implemented GST or VAT (on both goods and services), with some countries

having a dual-GST model. For example, Brazil, Canada and India.

GST in Australia

In Australia, the GST is a federal tax collected by the Australian Tax Office and then distributed

amongst the states. It was introduced in 2000, and its current tax rate is 10%. There are many

domestically-consumed items that are zero-rated such as fresh food, health services, and

education, amongst others. Government charges and fees are also exempted, considering that
they are themselves in the nature of taxes.

VAT in Brazil

There is a federal and state Value Added Tax (VAT) in Brazil. They also have other indirect

taxes imposed on the supply of goods and services, and similar to India, they have multiple tax

slabs under their indirect tax system.

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VAT in China

VAT was implemented in China in 1984, and the standard rate is 13%. However, a reduced rate

of 9% and 6% apply to certain goods.

VAT in Indonesia

VAT was introduced in Indonesia in 1985, and is collected by the Directorate General of

Taxation, Ministry of Finance. The standard rate is fixed at 11%, with plans to raise it to 12%.

Basic commodities have been exempted from VAT.

VAT in France

VAT in France is collected on products or services at each stage of production or marketing and

borne by the final consumer. The VAT rates comprise 20%, 10%, 5.5% and 2.1% slabs. 20% is

the standard rate and is applicable to most goods.

GST in New Zealand

GST was introduced in New Zealand in 1986 and from July 1989 to September 2010, GST was

levied at the rate of 12.5%, and 10% prior to that. It is currently levied at 15%. GST collects

31.4% of the total taxation, making New Zealand the highest-taxed country in the OECD in

terms of sales tax as a proportion of the GDP.

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VAT in the United Kingdom

VAT was introduced in the UK in 1973, replacing Purchase Tax. The default VAT rate has been

20% since January 2011, with some goods and services attracting a reduced rate of 5% or 0%

and some being exempted.

GST in the USA

The USA does not have any federal Value Added Tax levied on goods and services. Instead,

there is a sales tax governed at a state level. 45 states, the District of Columbia, as well as the

territories of Puerto Rico and Guam have imposed a general sales taxes that apply to both the

sale or lease of many goods and some services. The states may also grant local governments the

authority to levy additional general or selective sales taxes.

As of 2017, five states, i.e. Alaska, Delaware, Oregon, Montana and New Hampshire, do not

levy a statewide sales tax. The highest base rate of sales tax is levied by California at 7.25%.

Unlike India, other countries have a much higher threshold for GST applicability thus reducing

the burden on small businesses. This brings in challenges for SMEs.

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What is GST? Types, Features, Benefits, Input Tax Credit,
GST Council

The Goods and Services Tax or GST is a single, indirect tax that integrates all indirect taxes
within the Indian economy. The GST Act was passed on 29th March 2017 in the Parliament of
India and came into effect on 1st July 2017. The idea behind it was to replace multiple layers
of taxation with one tax (GST). It has replaced 17 indirect taxes (9 State-level taxes and 8
Central level taxes) and 23 cesses of the States and Centres that existed earlier, including
Central excise duty, Service tax, Value Added Tax (VAT), Luxury Tax, etc. The aim behind
implementing the GST Act was ‘One Nation and One Tax’. When GST was implemented,
1300 goods and 500 services were taken into consideration.
GST is a destination-based consumption tax as it is charged at every stage, wherever some
value is added to the goods or services, and the supplier of the good or service off-sets the
charge on its inputs of the previous stages. The charge is offset through the tax credit
mechanism. Ultimately, the last dealer passes on the added GST to the consumer of the goods
or services. The reason behind charging input credit at every stage of the value chain is to
avoid the cascading effect. Cascading effect means charging tax on tax. The Government of
India has eliminated the cascading effect with the expectation of reducing the prices of goods
or services and benefiting the consumers.
Cascading Effect means charging tax on tax.
For example,
A company is manufacturing Good X at the cost of ₹1,000 on which it has to pay Excise Duty
@ 10% to the Central Government and VAT @ 12% to the State Government.
Cost = ₹1000
Excise Duty @ 10% = ₹100
VAT @ 12% (of 1100) = ₹ 132
Therefore, the dealer’s invoice for the Good X will be ₹1,232 (1,000+100+132).
Now, the manufacturer will sell the Good to the dealer at ₹1,100.
Cost of Good X for the dealer is ₹1,100 (Cost of Good X + Excise Duty)
Suppose the dealer adds a profit margin of ₹200 on each good. Then the VAT paid by the
dealer will be 12% of ₹1,300 (1,100 + 200) = ₹156.
The invoice will be ₹ 1,456 (1,100+200+156).
It can be seen that initially, Excise Duty is charged on the Good X, on which further VAT is
levied. This is known as cascading effect, i.e., charging tax on tax.
GST avoids this cascading effect by charging tax only once. With GST, the tax will be charged
as a percentage of the cost of goods directly.

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The three types of taxes under GST are:
• Central Goods and Services Tax (CGST): GST levied by the Centre on the Intra-
State supply of goods or services.
• State Goods and Services Tax (SGST): GST levied by the State (including Union
Territories with legislatures) on the Intra-State supply of goods or services by the
State.
• Integrated Goods and Services Tax (IGST): GST collected by the Centre and
levied on the Inter-State supply of goods or services. In other terms, IGST is the
total of CGST and SGST.
Facts about GST:
1. Single Tax Structure: The basic aim of GST is to replace multiple taxes with a single tax
and make the price of goods or services uniform across the country. However, in doing so,
some goods or services became cheaper, while some became costly.
2. Effect on Prices: Goods and Services Tax has made luxury goods costlier and goods
manufactured for mass consumption cheaper.
3. Consumption-Based tax: The Goods and Services Tax is not received by the state in which
the goods have been manufactured, but by the state in which the goods or services have been
consumed.
4. Invoice Matching: The invoice matching mechanism will be added to the Indian GST. It
means that when details of inward supply filed in by the buyer match the details of outward
supplies filed in by the supplier, then only Input Tax Credit of purchased goods or services will
be available to them. Besides, GST is a self-regulating mechanism, as it keeps a check on tax
evasion and tax fraud and also brings more business to the formal economy.
5. Anti-Profiteering Measure: The recently implemented GST law includes the feature of
anti-profiteering measures. As the name suggests, the anti-profiteering measures prevent the
companies from making excess profits. According to the rules of Anti-Profiteering, the benefit

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of increased input tax credit and decreased GST tax rates should reach the customers in the
form of a reduced price of goods or services. These provisions are efficiently managed and
administered by NAA (National Anti-Profiteering Authority).
6. Registration under GST: It is mandatory for an organization with an aggregate turnover
exceeding ₹ 40 Lakhs in a financial year to register under GST. However, this limit is set at ₹
20 Lakhs for the North Eastern and hilly states (Special category states).

Input Tax Credit Under GST

Input Tax is the GST charged on the goods or services supplied to a taxable person. Input Tax
Credit means reducing or adjusting the taxes paid by an individual or firm on the inputs from
the taxes to be paid by them on the output, i.e., the final product. In other words, it means to
claim the credit of the GST paid by an individual or a firm on the purchase of goods or services
used as a raw material for manufacturing the finished goods or services. The suppliers at every
stage of the supply chain have the permission to avail of any GST credit paid by them on the
purchase of goods or services. This availed credit can be set off against the GST payable by
them on the supply of goods or services to be made later. In this way, the ultimate consumer
has to bear the GST charged by the last supplier of the supply chain. Therefore, the tax will be
charged on the value added to the good or service only, which avoids the cascading effect, i.e.,
double taxation.
For example, if a manufacturer has paid taxes on Input A, B and C of ₹ 90, ₹ 130 and ₹ 150,
respectively, and ₹ 600 on the final output, then he can claim the amount paid on input, i.e.,
purchase of raw material. Therefore, the manufacturer can claim (90+130+150) ₹ 370 and
will have to deposit only ₹ 230 (600-370) as tax.
Key Features of GST
1. GST Rates: The States and Centres have mutually decided upon the GST rates levied on
goods or services through CGST, SGST, and IGST under the aegis of the GST Council. The
four tax slabs under GST are 5% (for consumer durables), 12% (general rate), 18% (general
rate), and 28%(luxurious goods). However, the rate of GST for exports and supplies to the
Special Economic Zones (SEZs) is 0%.
2. Applicability of GST: The Goods and Services Tax applies to the whole country (India).
3. Consumption-Based Tax: Earlier, the taxes were based on the principle of origin-based
taxation. However, the Goods and Services Tax is a destination-based consumption tax, which
means that the taxes will be received by the states in which the goods or services have been
consumed. As the tax is received by the consumer State, the losses faced by Producer States
are compensated by the Centre.
4. Applicable on Supply of Goods and Services: Earlier, the taxes were charged on the basis
of ‘tax on the manufacture or sale of goods or on the provision of services; however, the Goods
and Services Tax is charged on the basis of Supply of Goods and Services.
5. GST on Imports: The imports of goods and services come under IGST and is treated as
Inter-State Supplies. IGST is charged on the imports of goods and services in addition to the
applicable customs duties.
6. Payment of GST: The taxpayers can make payment of GST through different modes, like
Internet Banking, NEFT (National Electronic Funds Transfer)/RTGS (Real Time Gross
Settlement), and debit/credit cards.

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Ways in which GST benefits and empowers citizens
1. Reduction in overall tax burden: It is expected that the tax burden on industries and trades
will be reduced, which will result in an increase in consumption and a decrease in the price of
goods and services. The ultimate result of this change is expected to be an increase in the
production level and development of the industries.
2. No hidden taxes: As GST is replacing all indirect taxes with one tax, there are no chances
of a hidden tax within the invoice of the goods and services. For example, if a commodity costs
₹500, it means that the overall cost of the commodity is ₹500 without any hidden taxes.
3. Development of a harmonised national market for goods and services: Harmony in tax
rates, laws and procedures simplifies its compliance. The common interface of the GST portal
brings synergy and efficiency to the filing of taxes. Earlier, service tax and VAT had their own
returns and compliances, which was time-consuming. However, GST merges both compliances
and lowers the number of returns, ultimately reducing the time spent on these compliances.
4. Higher disposable income in hand: Disposable income is the money at hand left with the
consumer after making all expenses. As GST has reduced the tax burden on the taxpayers, it
will increase their disposable income.
5. Customers have a wider choice: Earlier due to cascading effect, the customer used to have
less disposable income at hand to spend on goods and services. But, the reduction in prices of
goods and services, and tax burden has increased the disposable income of the consumers
giving them a wide choice while purchasing goods and services.
6. Increased economic activity: Reduction in prices of goods and services, increase in
disposable income of consumers, and decrease in the price of goods and services is leading the
consumers in performing economic activities.
7. More employment opportunities: With the implementation of GST, the manufacturing of
goods has become simplified, resulting in an increase in the number of manufacturers and
industries. More industries will bring employment opportunities to the country, benefiting the
citizens of India.
GST Council
The Goods and Service Tax Council is a constitutional body that advises the Indian Parliament.
It provides recommendations to the Union and State governments about issues related to Goods
and Services Tax. To provide these recommendations, it collects extensive data from the
market on changes in demand for goods and services.

The Goods and Services Tax Council (GST Council) comprises:

• According to the Article 279A of the amended Constitution, the GST Council
comprises the following members:
Chairperson: Finance Minister
Vice Chairperson: He/she is chosen amongst the Ministers of State Government.
Members: The members of the GST Council are MoS (Finance) and all Ministers
of Finance/Taxation of every state.
• Voting takes place when at least half of the members are assembled.
• The Centre has one-third weightage, whereas the States have two-thirds of the total
votes cast at the meeting.
• The decision is taken by a 75% majority.

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• The Council shall make recommendations on anything related to the GST, including
rules and rates, etc.

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 Chapter 4

Data Analysis
&
Interpretation

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Data analysis and interpretation are critical steps in a study of Goods and Services Tax (GST) as
they allow researchers to draw meaningful conclusions and insights from the data collected. Here
are some tips for data analysis and interpretation for a study of GST:

1. Ensure data accuracy and completeness: Before conducting data analysis, it is essential to
ensure that the data collected is accurate, complete, and reliable. Researchers should
carefully review the data for errors or inconsistencies and make any necessary corrections
or adjustments. This can include checking for missing data, outliers, or other anomalies.
2. Use appropriate data analysis techniques: Researchers should choose appropriate data
analysis techniques based on the research question and the data collected. This can
involve using descriptive statistics, regression analysis, or comparative analysis,
depending on the type of data and the research objectives. It is also important to choose
appropriate software or tools to conduct the analysis.
3. Interpret the findings in context: After conducting data analysis, researchers should
interpret the findings in the context of the study. This involves understanding the
limitations and biases of the data and considering other factors that may affect the results.
Researchers should also be cautious about making causal claims and ensure that their
interpretations are supported by the data.
4. Communicate the findings clearly and effectively: Finally, researchers should
communicate the findings of the study clearly and effectively to their audience. This can
involve presenting the results in tables or graphs, using plain language to explain the key
findings, and providing context and explanations for any technical terms or jargon used.
Researchers should also be transparent about their methods and assumptions and
acknowledge any limitations or uncertainties in the findings.

Overall, data analysis and interpretation are essential steps in any study of GST, as they allow
researchers to draw meaningful insights and conclusions from the data collected. By ensuring
data accuracy, using appropriate data analysis techniques, interpreting the findings in context,
and communicating the results effectively, researchers can ensure that their study is rigorous,
transparent, and informative.

Data analysis is a crucial step in any study on Goods and Services Tax (GST) as it helps
researchers to make sense of the data collected and draw meaningful conclusions. Here are some
potential data analysis techniques that can be used for a study on GST:

1. Descriptive statistics: Descriptive statistics can be used to summarize the data collected in
a study of GST. This can involve calculating measures of central tendency (e.g., mean,
median, mode) and measures of variability (e.g., standard deviation, range) for different
variables such as prices, tax revenue, or compliance costs. Descriptive statistics can be
presented in tables or charts to provide a clear overview of the data.
2. Regression analysis: Regression analysis can be used to estimate the relationship between
different variables in a study of GST. For example, researchers may use regression
analysis to estimate the impact of GST on prices, employment, or tax revenue, while
controlling for other factors that may affect these variables. Regression analysis can be
conducted using software such as Stata, R, or SPSS.

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 3. Content analysis: Content analysis can be used to analyze qualitative data collected in a
study of GST, such as responses to open-ended survey questions or interview transcripts.
This involves identifying themes or patterns in the data and categorizing them into
meaningful groups. Content analysis can be conducted manually or using software such
as NVivo or MAXQDA.
4. Comparative analysis: Comparative analysis can be used to compare the impact of GST
across different countries or regions. This involves analyzing data collected from multiple
sources and identifying similarities and differences in the implementation and impact of
GST. Comparative analysis can be conducted using statistical techniques such as t-tests
or ANOVA, or using qualitative methods such as content analysis.

It is important to choose appropriate data analysis techniques based on the research question, the
data collected, and the context of the study. It is also important to ensure that the data is reliable
and valid, and that appropriate statistical methods are used to analyze the data. Finally,
researchers should be transparent about their data analysis methods and provide clear
explanations of how they arrived at their conclusions.

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 Negative list under GST

In the context of Goods and Services Tax (GST), a negative list refers to the list of goods and
services that are exempted from the tax. In other words, these are the items that are not subject to
GST, and no tax is levied on their sale or provision.

The negative list under GST includes items such as:

1. Agricultural produce: This includes crops, livestock, and other products of agriculture
that are not processed or packaged.
2. Healthcare and education services: Healthcare services provided by hospitals, clinics, and
other medical practitioners, as well as educational services provided by schools, colleges,
and universities, are exempt from GST.
3. Financial services: Services provided by banks, insurance companies, and other financial
institutions are exempt from GST.
4. Government services: Services provided by the government, such as passport services,
municipal services, and court fees, are exempt from GST.
5. Charitable activities: Activities undertaken by charitable organizations such as religious
institutions, trusts, and NGOs are exempt from GST.

It is important to note that while the items on the negative list are exempt from GST, they may
still be subject to other taxes or duties such as customs duty, excise duty, or state-level taxes.
Additionally, some goods and services may be subject to GST at a later stage in the supply chain,
such as when they are sold to end-users or consumers.

Overall, the negative list under GST is an important aspect of the tax system, as it provides
clarity on the items that are exempt from the tax and helps to ensure that GST is levied only on
the goods and services that are intended to be taxed.

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 Chapter 5
Findings, conclusion

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 FINDINGS

1. Majority of the respondents are looking towards GST as a positive step in taxation system of
the country.
2. Majority of the Respondents are of the opinion that introduction of GST has increased lots of
legal compliances.
3. Majority of the peoples are of the opinion that GST has not actually increased the tax burden
on common man.

4. maximum respondents are of the opinion that GST is easy to understand

5. Majority of the customers opined that GST will not add to the inflation.
6. Majority of the respondents are of the opinion that GST will be beneficial in the long run.
7. Majority 41% of the respondents are of the opinion that GST will increase tax collection of
the Govt.

8. Majority of the respondents i.e. 45.7% are of the opinion that GST will not affect adversely to
small business while 30% opinioned that impact of GST will be negative on small businesses.

9. Majority i.e. 68.6% respondents are of the opinion that GST implementation has adversely
impacted customers purchasing power.
10. Majority of the respondents i.e. 43.2% are of the opinion that GST implementation will not
have negative effect on Indian Share Market. 35.5% are still undecided on the issue

11. majority of the respondents i.e. 47.2% are of the opinion that implementation of GST is
good.

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 CONCLUSION

As an AI language model, I cannot provide a specific conclusion on a study of GST since it would
depend on the specific research question, data collected, and methodology used. However, based
on the potential findings and analysis methods mentioned earlier, a conclusion on a study of GST
may highlight the following:

1. Effectiveness of GST: A study on GST may conclude that the tax system has been
effective in achieving its objectives, such as increasing tax revenue and simplifying the tax
system.
2. Impact on businesses and consumers: A study on GST may conclude that the tax has had
an impact on businesses and consumers, either positive or negative, depending on the
specific sector and the nature of the business.
3. Challenges and areas for improvement: A study on GST may identify challenges and areas
for improvement in the implementation of the tax, such as improving compliance levels,
reducing administrative burden, and addressing technological infrastructure issues.
4. Policy implications: A study on GST may have important policy implications, particularly
in terms of tax policy, trade policy, and economic growth.

Overall, a conclusion on a study of GST would depend on the specific research question, data
collected, and methodology used. It is important to ensure that the findings are based on reliable
and valid data and that appropriate data analysis techniques are used to arrive at the conclusions.

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 Chapter 6

Recommendations

Page | 58
Suggestions

• The customers suggested that there should be a smooth, transparent and simple transition
provisions which is easily understandable.

• Special focus on awareness and training of all officers, professionals and assesses should be
given on GST.

• Since the public are very clear about GST, any disputes on GST introduction should be
protectively addressed by way of speedy redress.

• The people are not well informed on the implementation of the GST. Therefore, in order to
ensure efficient implementation of the GST, the government should come out with a proper
guideline to the society on the procedures for the implementations of GST.

• Gradual stages may be employed for the implementation like the agricultural sector, then
industrial and then the service sector.

• The relevant authorities especially the customers department must work closely with other
departments like information, Inland Revenue and other enforcement authority ensure good
implementation.

• Lastly, the government must ensure a good management of the income collected from the

GST.

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Chapter 7
Bibliography

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WEBSITES

https://chat.openai.com/chat

https://cleartax.in/s/gst-law-goods-and-services-tax

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

https://www.coceducation.com/blog/about-ca-course/objective-of-goods-and-services-tax-gst/454

https://www.geeksforgeeks.org/what-is-gst-types-features-benefits-input-tax-credit-gst-council/

BOOKS :

INDIRECT TAX (SEM 5)

OTHER BOOK

Page | 61
 List of abbreviation

GST - GOODS AND SERVICES TAX

CGST- CENTRAL GOODS AND SERVICES TAX

SGST -STATE GOODS AND SERVICES TAX

IGST- INTEGRATED GOODS AND SERVICES TAX

CST- CENTRAL SERVICE TAX

VAT – VALUE ADDED TAX

SST – SALES AND SERVICES TAX

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