This article is written by Shreya S.K Pandey, a student of Law College Dehradun Faculty of Uttaranchal University. In this article, she discusses the impact of Goods and Services Tax (GST) in India, the advantages and disadvantages of the GST and the impact of GST on various sectors.
Table of Contents
Introduction
Goods and Services Tax (GST) was introduced in the Indian Constitution through the 101st (Hundred and One) Constitutional Amendment Act, 2016. After the enforcement of Goods and Services Tax (GST), many sectors faced some positive effects as well as negative effects.
The enforcement of the tax was for the long term benefit. There were very few sectors that received an immediate benefit from the implementation of Goods and Services Tax (GST). The long term benefit requires the patience of citizens. Where one sector in the country faces a positive aspect, on the other hand, the other sector faced the negative aspect. It is very important to know how and to whom the Goods and Services Tax (GST) had impacted. In a country where the population is 133.92 crores, [Source: World Bank, United States Census Bureau], implementation of a new tax regime was not less a big hurdle. It was required that the authority first understand the concept then it will be easy for the citizens to under the concept of “ One Nation One Tax”.
Some of the major sectors that have been affected by the implementation of GST are –
- Export-Import sector
- Automobile sector
- Real estate
- Iron and steel
- Energy sector
- Entertainment industry
- Hotel and tourism
- Education sector
- Banking sector
- Textile sector
- Manufacturing sector
- Information technology sector
Impact on Export and Import Sector
Before the enforcement of the Goods and Services Tax (GST), Export and Import were governed by the Service Tax, Value Added Tax, Excise Duty and Customs Duty. These were imposed on the Import and Export goods and services. When Goods and Services Tax (GST) was introduced all these taxes were merged into one. But the Basic Customs Duty (BCD) continues to work on the import bills.
Impact of GST on import
When any goods and services are imported then it is the duty of the importer to pay the Integrated Goods and Service Tax (IGST) and Customs Duty.
Integrated Goods and Services Tax (IGST) is a tax that is imposed on the supply of Goods and Services which takes place Inter-State. IGST Act governed these transactions. Integrated Goods and Services Tax (IGST) applies to the supply of goods and services which are imported to India as well as which are exported by India.
Note: The import of goods and services are Inter-State supplies and therefore a person is responsible for paying the Integrated Goods and Services Tax (IGST) and Basic Custom Duty (BCD)
Integrated Goods and Services Tax (IGST) is substituted by all the taxes which were governing the imports of goods and services before the GST. Those taxes were:-
- Special Additional Duty (SAD)
- Countervailing Duty (CVD)
IGST, which is applied to the imported goods and services, is based on the rate of tax which is applicable to the imported goods in India. Importer of goods has the power to claim all the Input Tax Credit of IGST which is paid by him on the import of goods and services, but in such case tax credit on the paid custom duty will not be obtainable and the cost will be borne by the importer.
When Integrated Goods and Services Tax (IGST) is applied, then:-
- The exports will be zero-rated
- The Central Government and the State Government will share the tax.
Impact of GST on export
The goods and services which are imported in the country are inter-state supplies, therefore, a person who is importing the goods and services is liable to pay the Integrated Goods and Services Tax (IGST). It will be paid on the reverse charge basis by the importer of goods and supplies. There shall be no imposition of Goods and Services Tax (GST) on the goods and services which are exported. However, when there is the export of raw materials and input of those goods which are exempted from the Goods and Services Tax (GST), then the person exporting the raw material and input are liable to pay the tax.
Exporters may claim the Integrated Goods and Services Tax (IGST) and other taxes which are paid by then in the inputs. They may claim IGST when it is paid by the exporter in the input tax credit scheme.
When Goods and Services Tax (GST) was introduced in India it relaxed the Export Tax. Relaxation of tax on the export helped in decreasing the product cost. There is also a relaxation in the availability of input credits on all related services. Ultimately this will help the country to grow in the economic sector as the export industries will flourish due to relaxation in the export tax.
Impact of GST on Business
Goods and Services Tax (GST) has a huge impact on the medium and small enterprises. Business owners of the small and medium-sized are under liability to pay the various taxes. They have to approach the numerous departments to accomplish the work or documentation related to the tax.
Owners of the small and medium enterprises are under liability to pay the tax up to 32% which was the total tax charged or collected by the Central Government and the State Government. When Goods and Services Tax (GST) was imposed or implemented the small and medium enterprises are now accountable to pay 18 to 22 percent of tax which is much lessened to the previous tax. Also, the owner of small and medium enterprises do not have to visit the distinct departments for the purpose of paying the various taxes.
Direct impact on the medium and small enterprises
- Goods and Services Tax (GST) is building a platform for the new business in the country. It gives an opportunity to start a new work or business. Before the implementation of the Goods and Services Tax (GST), there is a requirement of Value Added Tax (VAT) registration for all the business. The Value Added Tax (VAT) registration was different in every state. As the registration was different in all the states, the rules and regulations were also different. The entire process was quite disoriented.
However, after the imposition of Goods and Services Tax (GST), there is a requirement of only one registration and that too with Goods and Service Tax (GST) which is controlled by the Central, same as service tax.
2. It is compulsory on the part of every business to pay the Value Added Tax (VAT) if the annual turn comes out to be more than five lakh in some states and in some other states it is more than 10 lakh. The different Value Added Tax (VAT) creates confusion for the business.
After Goods and Services Tax (GST), businesses are not required to pay the Goods and Services Tax (GST) or to register when the annual turnover of the business is 10 lakh. The provision is applicable to all the states. The provision is helpful for all the small or medium businesses, having a turnover between 5 lakh to 10 lakh, to avert applying for the return of Goods and Services Tax (GST).
3. Goods and Services Tax (GST) provides a platform for small and medium-sized businesses to work in India by applying their ability. There is less confusion or complexity after the Goods and Services Tax (GST) provision. Now, there will be no difference between the goods and services and at last, this will help in making the compliance easy.
Impact of GST on Indian Economy
Goods and Services Tax (GST) is extremely useful for the economy of India for a long term basis. The reason for the benefit of the Good and Services Tax (GST) is due to the uniformity of taxes. It merges all the indirect taxes which was prevailing in India during the Value Added Tax (VAT).
Goods and Services Tax (GST) helps the business sector to grow and to become strong by bringing transparency. When the business sector will flourish it will help in creating further employment which will ultimately lead to reducing the burden of the tax.
Goods and Services Tax (GST) have a consistent scheme of the tax for the goods and services across India, i.e. 0%, 5%, 12%, 18%, and 28%. The tax rate of some goods or products is different from the rest such a gold, precious stones and semi-precious stones. Special rates of taxes are levied in such products. Things such as luxury cars, tobacco, carbonated beverages, etc, are subjected to 22% of the additional cess.
Goods and Services Tax (GST) in comparison to the previous indirect laws relating to the taxes provided a broader base for the taxes. The Central Excise Law exempts the small scale units i.e. SSI having a turnover up to Rs. 1.5 crore from levy the duty. Exemption under the service tax law was given when the previous financial year has accumulated turnover up to Rs. 10 lakh. The lower limit for the purpose of levying the Value Added Tax (VAT) varies from one state to another state i.e. between Rs. 5 lakh to Rs. 20 lakh.
But in the Goods and Services Tax (GST) scheme, the lower limit for the purpose of levying the Goods and Services Tax (GST) was set or settled at Rs. 20 lakh. But in some circumstances i.e. for special category States, the lower limit is fixed at Rs. 10 lakh. Goods and Services Tax (GST) had included within it all the small suppliers. It was observed that many suppliers had registered themselves intentionally and freely so that they may avail all the benefits relating to the input tax credit.
Micro, Small and Medium Enterprises (MSME’s) has suffered some sort of complications with the new tax regime i.e. Goods and Services Tax (GST). All the Micro, Small, and Medium Enterprises (MSME’s) are suffering problems to conduct their business as there is a requirement of registration in every state from where the MSMEs are formulating a supply. Goods and Services Tax (GST) is helping the Micro, Small and Medium Enterprises (MSME’s) in developing the ability for the purpose of maintaining the account book. Maintenance of the account book will ultimately help the enterpriser to get a loan from any bank or financial institution. This will help them to increase their business. They will now borrow the money from the formal sector and will no longer rely on the informal sector for obtaining the loan. The country like India really demands a strong Micro, Small and Medium Enterprises (MSME’s) which helps in creating more employment.
Goods and Services Tax (GST) helps in controlling the tax evasion. Permanent Account Number (PAN) which is issued by the income tax department is linked with the Goods and Services Tax (GST) number i.e. GSTN. This helped in establishing a relationship between indirect taxes and direct taxes. This ultimately aid or support in reducing the evasion of tax to an enormous extent. During the regime prior to the Goods and Services Tax (GST), there were many cases of tax evasion. When the taxpayers disclose their turnover under the indirect tax law and the direct tax law both differed from each other, which gives a path to the evasion of tax.
After the implementation of the Goods and Services Tax (GST), there is an expectation of an increase in the tax Gross Domestic Product (GDP) ratio. The expectation is that the basis points (bps) will increase up to thirty in the financial year of 2018-2019 each and 2019-2020. This was stated by the table of medium-term expenditure framework (MTEF) in the lower house i.e. Lok Sabha. The databases of the indirect tax and the direct tax are linked together, it helps the data analytical tools to remove all the inconsistency and also helps the authorities of revenue to take a mandatory action.
Summing up the whole, an increase in the ratio of Gross Domestic Product (GDP) will overall helps in lowering the rate of tax in India. Goods and Services Tax (GST) will help the Indian economy on a long term basis.
Impact of GST on Real Estate
The imposition of Goods and Services Tax (GST) has some positive impact on the property and real estate. Property buyers are in profit due to the Goods and Services Tax (GST). 12% Goods and Services Tax (GST) charges of property value are liable on all under-construction properties. It does not include the stamp duty and the charges on the registration. Previously this provision was applied in the properties which are prepared or ready.
There is an increase in the profit for the builders and the developers due to the input tax credit. This will additionally pass the profit to homebuyers.
According to changed tax scheme, the under-construction properties i.e. flats and buildings will be charged 18% Goods and Services Tax (GST) in which 9% will be State Goods and Services Tax (SGST) and 9% will be Central Goods and Services Tax (CGST). The government has the power to deduct the land value equal to the 1/3rd of the total amount which is charged by the builder. It will make the efficient rate of tax as 12%.
Note:- In the real estate sector, a 12% tax rate is for building materials there will be no effect on the value of the flat.
|
Sr. No. |
Substance or Material |
Value Added Tax (VAT) |
Goods and Services Tax (GST) |
|
1. |
Iron pillars and iron rods |
20% |
18% |
|
2. |
Fly ash bricks and Sand lime bricks |
6% |
5% |
|
3. |
Cement |
20 to 24% |
28% |
|
4. |
Ceramic tiles, plaster, wallpaper, wall fittings, paint |
20 to 25% |
18% |
Positive impact on buyers
Goods and Services Tax (GST) have some positive impact on the prices of the property. It makes the tax system easy for all the buyers. Before Goods and Services Tax (GST), buyers were accountable to pay the taxes which depends upon the property’s construction status and the state in which the property is located.
Buyers were also liable to pay the Value Added Tax (VAT), stamp duty, service tax, and registration charges when they buy the under-construction property. But when they buy the property which was ready or completed, they are liable to pay registration charges and stamp duty. The state has the power to levy the stamp duty, Value Added Tax (VAT) and Registration Charges and all the figures of tax differ from state to state. Central has the power to levy the service tax and it was charged upon the construction. This makes the tax scheme very much complicated for all the buyers, but Goods and Services Tax (GST) had made this simpler.
Under Goods and Services Tax (GST) regime, tax is charged upon all the under-construction properties are at 12% of the value of the property. It does not include the registration charges and stamp duty. There was no imposition of indirect tax on the sale of property which is ready-to-move that is why there is no applicability of Goods and Services Tax (GST) on sale of the ready-to-move properties.
Positive impact on Builders
Before the enforcement of the Goods and Services Tax (GST), a developer or builder had to pay Value Added Tax (VAT), Central Excise Duty and Entry taxes which was the state domain, the state was collecting those taxes on the cost of construction material. Developer and the builder were also liable to pay the tax at 15% for services such as approval charges, architect fees, labor, legal character, etc.
After the Goods and Services Tax (GST), there was not much variation in the construction costs. In addition, logistics reduced cost will lead to a lessening of the expenses. To increase the profit, the input tax credit is helpful.
Impact on Iron and Steel
Tax Laws relating to the Iron and Steel
Three types of taxes are applied or imposed on the manufacturing of iron and steel. Those taxes are:-
- 12.5% of Excise Duty
- 5% of the Average Value Added Tax (VAT)
- 2% Central Sales Tax (CST)
When we see, there is a total of 19.5% net tax which is imposed upon the iron and steel. If there is an article which is manufactured of iron and steel are charged at the rate of 19.5%. The rate of the tax charged is similar to the tax rate for manufacturing iron and steel. In Punjab, the Value Added Tax (VAT) is 2.5% for the substances or commodities which are of iron and steel there the pattern of tax charged is not the same in whole India.
Impact after Goods and Services Tax (GST)
Materials like iron and steel are very useful and utilized in everyday life. Goods and Services Tax (GST) has a positive impact on the iron and steel and material made up of these. Kitchen utensils that are useful in day to day life become cheaper than the previous. Utensils like pan, stainless steel cooker and many more are now charged with 12% of Goods and Services Tax (GST). Tt is charged 7.5% less than the current tax laws. There are benefits for all the steel-related companies as there is a 5% low tax rate on all the large inputs used by them under the Goods and Services Tax (GST). These inputs are iron ore, coal, etc.
All the industries relating to the Iron and Steel are getting benefits with the introduction of the Goods and Services Tax (GST). There is an expectation that it will help in furthermore benefits by reducing or lowering the input tax and logistics.
Impact on Entertainment Industry
Before the enforcement of Goods and Services Tax (GST), the entertainment section pays many taxes. They are not limited to one tax. They pay the central tax, state tax and also tax imposed by the local authorities. But, when Goods and Services Tax (GST) was imposed they were liable to pay only one tax.
Before the implication of Goods and Services Tax (GST)
Before the enforcement of the Goods and Services Tax Act, 2017, entertainment tax was imposed on different entertainment services. Value Added Tax (VAT) and service tax were imposed in various services of the entertainment i.e. nutriment provided in the Cinemas. The Value Added Tax (VAT) charged was 14.5% and the service tax charged was 15%. The entertainment sector was enjoying a subsidy of 60% on the service tax and therefore they were required to pay the service tax at the rate of 6% i.e. 40% of the 15%. The entertainment sector was paying the 20.5% tax along with the entertainment tax.
After the implication of Goods and Services Tax (GST)
After the enforcement of the Goods and Services Tax (GST), all the scattered taxes upon the entertainment sector was subsumed in one i.e GST.
Goods and Services Tax (GST) were ranging between 18% to 28%. The tax rate was totally dependent upon the kinds of the Entertainment Services.
Things within the 18% Goods and Services Tax (GST)
- Circus
- Television and DTH services
- Theatre
- Movie Tickets (Tickets costing up to Rs.100 have GST 12% and tickets costing more than Rs. 100 have GST 18%)
Things within the 28% Goods and Services Tax (GST)
- Racing
- Casinos
- Amusement parks
- Movie events and festivals
- Sporting event
Impact of Goods and Services Tax (GST) on consumers
Goods and Services Tax (GST) has given an overall profit to the entertainment sector. The tax on the movie ticket was 30% and there was 20.5% of the Value Added Tax (VAT) along with the service tax on the foods which a person buys from the theatre. But, after Goods and Services Tax (GST), a tax imposed upon the ticket was 28% and tax on the foods in the cinemas are charged at 18%.
But here we see different results relating to the impact of Goods and Services Tax (GST) on the entertainment sector. Reason for various consequences are:-
- Low tax on entertainment service in some states.
- No tax on entertainment services in some state.
When Goods and Services Tax (GST) was imposed in these states, they suffer a rise in the tax on the entertainment sector. However, it was low for those states where the tax on entertainment services was high. But, if we compare, Goods and Services Tax (GST) was quite low in comparison to the tax system, i.e. Value Added System (VAT) and Service Tax, which was prevailing before GST.
State also has the power to include or charge Local Body Tax (LBT) in addition to the tax which was discussed above under Goods and Services Tax (GST). Local bodies also have the power to impose a further charge, under Goods and Services Tax (GST), on the entertainment services in their respective area.
Impact of Goods and Services Tax (GST) on Owner of Entertainment Service
According to the Goods and Services Tax (GST) regime, the owner of the entertainment service is also liable to pay the tax for the services in entertainment. They will also pay the tax on the sale of the tickets, food, etc.
Impact of GST on Hotel and Tourism
Income generated from the hotel and tourism plays a vital role in the Indian economy. They help in increasing the Gross Domestic Product (GDP) of India. This is why every State Government keeps on promoting the tourism of there state by various advertisements. Rate of Goods and Services Tax (GST) differs for the hotels because of the tariffs.
- If the tariffs range Rs 1000 and less then there will be no Goods and Services Tax (GST).
- If the tariff range between Rs. 1000 to Rs. 2500 then Goods and Services Tax (GST) will be 12%.
- If the tariff range between Rs. 2500 to Rs. 7500 then Goods and Services Tax (GST) will be 18%.
- If the tariff is more than Rs. 7500 then Goods and Services Tax (GST) will be 28%.
There is 5% of Goods and Services Tax (GST) on the person who operates the tour. But there is an expectation that as the Goods and Services Tax (GST) had lower the tax rate on the operators of the tour the price of the tour packages will also show the down graph.
Impact of GST on Banking Sector
With the imposition of Goods and Services Tax (GST), the banking sector became more expensive. Previously, the tax on all the services relating to the banking was 15% but after the enforcement of Goods and Services Tax (GST), the tax rate on all the banking service was increased to 18%. These are some of the impacts of Goods and Services Tax (GST) on banking sector:-
- Each branch of Banks must have separate registration
After the implementation of the Goods and Services Tax (GST), every bank is required to obtain a separate registration for all the branches within them. Before Goods and Services Tax (GST), all the employees working in the banks are getting out of their relief mode because there was a concept of “single centralized registration” for all the branches of banks. It was a complex task to be done in a country like India because there were excessive numbers of banks having a more excessive number of branches prevailing in India.
- The transaction between banks is not free
After the implication of Goods and Services Tax (GST), the money transaction, whether it was internally or externally, between the two different banks where done by imposing the tax. Before the GST, it was free.
- Dependency upon CGST and SGST
Under Goods and Services Tax (GST), there are two different kinds of taxes prevailing in India. First, Central Goods and Services Tax (CGST) and second is State Goods and Services Tax (SGST). CGST is the domain of Government and SGST is the domain of State Government. With the advent of these two types of Goods and Services Tax (GST) the whole code or protocol of the banks and relating sector are altered in a stipulation of the service which they provide to all consumers.
- Point of supply identification
Every consumer or customer having their account in any bank has been offered a “point of supply identification”. This helps the customers in the transfer of money in any part of India. If a person has an account in a remote area, he will easily transfer the money with the limitation of amount subjected to the rules stated by the Reserve Bank of India (RBI).
- Input Tax Credit in GST
Before the imposition of Goods and Services Tax (GST), the input tax credit was not granted in accordance with the Central Value Added Tax (CENVAT) protocols or code. However, after the Goods and Services Tax (GST), the input credit tax is acknowledged to all the banks which will ultimately reduce the evasion of tax when there are external supply funds.
- Growth of transaction
After Goods and Services Tax (GST), the banking sector has approached in the whole of India and even in the acquaintance countries for the purpose of ensuring the continuous and steady business. The sudden growing and spreading of business will lead to increasing the claim of funds. And as the demand for funds will increase this will ultimately benefit the banks because of expansion in the number of transactions.
- Distinctiveness in services
Every bank gives a variety of services to all of its customers or consumers such as credit card, debit card, internet banking, etc. When Goods and Services Tax (GST) came into force, there was an amendment in the rules and regulations relating to the banks and this emerged as the up-gradation of all the system including the Automated Teller Machine (ATM) and all the systems related to the transaction as demanded by the department of IT.
Impact of GST on Supply Chain
Supply Chain
It is a type of web or chain which lies between a corporation or company and its supplier for production and distribution of a particular product to an ultimate buyer or purchaser. It represents the process that was taken from receiving the product from its original character to the consumer.
The supply of chain is necessary for the purpose of proper running of trade and business which is producing and circulating the product and material. There is some impact on this sector after the implementation of Goods and Services Tax (GST) which are:-
- Enhancement and advancement of the stock points.
- Reduction in the channel inventories.
Channel Inventories means average product left in the retail store’s “shelves” which is not sold or taken by the end consumer,
- There will be a straight or direct benefit for the procurement out of state.
- Benefit in the logistic cost.
Now a day, the logistics industry is considered as the backbone of the Indian Economy. When Goods and Services Tax (GST) was imposed as a new tax regime for the Indian economy system the logistics sector was improvised as the activities like corruption was reduced. Now, there is less transportation time as Goods and Services Tax (GST) had made the time catching clearance procedure much easier. The revenue related to the business was increased and the total logistic cost is also reduced by the Goods and Services Tax (GST).
Impact of GST on Textile Sector
Goods and Services Tax (GST) has shown its positive impact upon the textile and readymade garments. They are benefited from this new scheme of tax. Some of the benefits which Goods and Services Tax (GST) provided to the textile sector are:-
- The input credit system or chain is now broken
- The price for the manufacturing of goods is now lower in comparison to the previous tax regime.
- Input credit is now granted in the capital goods
After the implementation of Goods and Services Tax (GST), all readymade garments which range up to Rs. 1000 are exempted from the terms and clause of the Goods and Services Tax (GST) and where the garments are branded ranging above Rs. 1000 then 12% of tax will be levied upon them.
Advantage of GST
Goods and Services Tax (GST) substituted the regime of Value Added Tax (VAT). It is a levy upon the manufacture, consumption, and sale of goods and services in India. It substituted or merged all the indirect taxes which were imposed by the Central Government and State Government on goods and services. Goods and Services Tax (GST) focuses on a long term benefit. Many sectors benefited due to this new regime. Some of the advantages of Goods and Services Tax (GST) are:-
- Goods and Services Tax (GST) merged all the indirect taxes into one. This made the tax system easier and simpler for all service and business.
- Companies that are providing the services and having the turnover less than the Rs. 20 lakh are exempted under Goods and Services Tax (GST) for paying the tax. But in the case of North East States, the lower limit for the purpose of exempting the Goods and Services Tax (GST) is Rs. 10 lakh. This small scale business may ultimately escape the long process of tax.
- Companies who have the turnover up to 75 lakh under Goods and Services Tax (GST) scheme may take a benefit of the composition scheme and through this, they have to pay only 1% Goods and Services Tax (GST) on their turnover.
- Goods and Services Tax (GST) reduces the sale which is done without a receipt and also lowers the rate of corruption.
- Tax on goods such as cars, smartphones, etc is lessened and now tax is up to 2% or 7.5%.
- This scheme had helped in minimizing the evasion of tax.
- The logistic cost has been reduced by the Goods and Services Tax (GST). Border taxes are eliminated and inconsistency relating check post was determined which ultimately reduced the logistic cost.
- Goods and Services Tax (Gst) had created a liability and regulation towards the sector which is unorganized for example textile industries.
Disadvantage of GST
Goods and Services Tax (GST) substituted the regime of Value Added Tax (VAT). It is a levy upon the manufacture, consumption, and sale of goods and services in India. It substituted or merged all the indirect taxes which were imposed by the Central Government and State Government on goods and services. Goods and Services Tax (GST) focuses on a long term benefit. Working highly for the future it shows some negative aspects too. Some of the disadvantages of Goods and Services Tax (GST) are:-
- Goods and Services Tax (GST) had made the transactional fees between the financial sector more costly or expensive. Transactional fees have been increased from 15% to 18%.
- Goods and Services Tax (GST) had made the premiums of the insurance more costly and pricey.
- It has shown some negative impact on the real estate market. Due to Goods and Services Tax (GST). There is an increase in real estate prices from 8% to 12%. But it is expected that it will not last for the long term.
- Goods and Services Tax (GST) does not include petrol due to which the price of petrol always goes in contrary to the principles of the unification of commodities.
- Goods and Services Tax (GST) had advanced towards the more complex system for the owners of the businesses.
- Before Goods and Services Tax (GST), few retail products have tax up to 4%. But Goods and Services Tax (GST) had made the clothes and garment further expensive or pricey.
- Goods and Services Tax also affected the sector of aviation. Before Goods and Services Tax (GST), the service tax on the ticket of the airways ranges between 6% to 9%. But now they are exceeded and range up to 15% which is nearly double the tax rate which was imposed by the Government earlier.
- With the emergence of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) which substituted the Service Tax or Central Excise, Value Added Tax (VAT) and Central Sales Tax (CST) there was no change in the system of tax. The tax system still consists of many layers.
Conclusion
The aim of the government is to bring India in an umbrella of one tax promoting the “One Nation One Tax” system. Implementation of Goods and Services Tax (GST) substituted the regime of Value Added Tax (VAT) in India. It merged all the indirect taxes which was prevailing in the country during the Value Added Tax (VAT) regime. With the imposition of Goods and Service Tax (GST) was a big task in a country like India where new changes are not easily accepted. It was a complex system to understand at first but later it is coming out as a long term benefit for the country. There is the various sectoral impact of Goods and Services Tax (GST). Some sectors show a positive impact while others show a negative impact. Due to a long term benefit scheme, there is a less immediate positive impact on Indian society and economy. However, it is expected that there is an expectation of the growth of the Indian Gross Domestic Product (GDP). the only thing is required to have patience and continuous following of rules and regulations for uplifting the country’s economy.
