ECONOMIC CONSEQUENCES OF GST IN INDIA

Abstract

The research paper focuses on the economic consequences of Goods and Services Tax (GST) personified newly in the Indian Tax structure. The paper also discusses the anticipated barriers and future predictions for GST. The Goods and Services Tax (GST) is a vast notion that simplifies the giant tax structure by supporting and augmenting the economic growth of a country. GST is a comprehensive tax levy on manufacturing, sale and consumption of goods and services at a national level. India’s historic and bold move towards integrated tax structure is viewed by most economists as an answer to regressive indirect tax structure. It is a comprehensive tax system that will subsume all indirect taxes of states and central governments and unified economy into a seamless national market. An important feature of GST is that products and services are equalized and are taxed at a fixed rate until customers access it within the supply chain. Therefore, tax reforms give equal rights to large and small businesses and taxpayers. Another important feature of India's GST rollout is that it is dual-based. In other words, both central and multiple government agencies will release GST separately. The central government will charge CGST and the state will charge SGST respectively. However, the tax, tax and taxation standards are the same. This is necessary in view of the federal structure of the government if governments are free to manage their own taxes at two levels. GST would help in lesser corruption and increased tax revenue. It contributes towards a better and improved economy with single taxation. The system will make it easier to identify the tax defaulters.