ECONOMICS

TOPIC- TAX STRUCTURE OF INDIA

SUBMITTED TO- ASST. PROF. KIRTI SRIVASTAVA

SUBMITTED BY- ANKIT KUMAR SINGH

2ND SEM, B.A.LL.B (B)

Date- 17-03-2020

CERTIFICATE

This is to certify that the assignment titled “TAX STRUCTURE OF INDIA” submitted to the
CHRIST ACADEMY INSTITUTE OF LAW, Bangalore by Ankit Kumar Singh for the degree
of law, is a bonafide research work carried out by him individually under my guidance.

Date- 17-03-2020 Asst. Prof. Kirti Srivastava

2
 DECLARATION

I hereby declare that the assignment titled ‘TAX STRUCTURE OF INDIA’, which I am
submitting CHRIST ACADEMY INSTITUTE OF LAW is the outcome of the research carried
under guidance of Asst. Prof. Kirti Srivastava. The extent of information collected from existing
literature has been cited and fully acknowledged at the appropriate places. I further declare that
this assignment wholly or impart has not been submitted to any other college.

Date- 17-03-2020 Ankit Kumar Singh

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 ACKNOWLEDGEMENT

First and foremost, I bow down with all my praise before my Lord Almighty for having helped
me to complete this task at the prestigious CHRIST ACADEMY INSTITUTE OF LAW,
Bangalore. I express my sincere and heartfelt gratitude to my guide Asst. Prof. Kirti Srivastava,
for her helpful guidance, original ideas and encyclopedia knowledge to complete this work and
the insight throughout my research work. The idea of taking up this topic was seeded in my mind
by Asst. Prof. Kirti Srivastava. More than anyone else, her influence has contributed to my
development in this field. Lastly, I would like to express my gratitude towards my friends for
their kind co-operation and encouragement which help me in completion of this assignment.

ANKIT KUMAR SINGH

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 TABLE OF CONTENTS

Table of Contents
ABSTRACT....................................................................................................................................6

INTRODUCTION...........................................................................................................................7

Review of literature.......................................................................................................................10

Need of the study...........................................................................................................................11

Objectives......................................................................................................................................11

RESEARCH METHODOLOGY..................................................................................................11

ANALYSIS OF INDIAN TAX STRUCTURE.............................................................................12

Advantage of indirect tax...............................................................................................................13

ADVANTAGE OF DIRECT TAXES: -.......................................................................................15

DISADVANTAGE OF DIRECT TAXES: -.................................................................................16

Tax Collection Bodies:..................................................................................................................17

GST:...............................................................................................................................................18

Impact of GST on the Indian Economy: Advantages and Challenges of GST Implementation...20

Problems of current tax structure in India.....................................................................................22

Conclusion.....................................................................................................................................24

REFRENCES.................................................................................................................................25

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 ABSTRACT

Tax is the major source of revenue for the government, the development of any country's
economy largely depends on the tax structure it has adopted. A Taxation Structure which
facilitates easy of doing business and having no chance for tax evasion brings prosperity to a
country's economy. On the other hand, taxation structure which has provisions for tax evasion
and the one which does not facilitate ease of doing business slows down the growth of country's
economy. Therefore, as taxation structure plays an important role in country's development.
India has a well-developed tax structure. The power to levy taxes and duties is distributed among
the three tiers of Government, in accordance with the provisions of the Indian Constitution.
Indian taxation structure has gone through many reforms and still it is very far ahead from being
a ideal taxation structure. Many problems like Tax Evasion, Reliance on indirect taxes, Black
money, existence of parallel economy show that Indian taxation system requires some major
reforms in the future ahead to address all this problem. In the following paper, the study is purely
based on secondary data. Various figures are obtained from the different websites of government
of India. It is seen that there are various number of taxes and different tax collection authorities
in India. Also, it is seen that there is major dependence on indirect taxes for tax collection than
the direct taxes. Both Indirect taxes and Direct taxes have their own advantages and
disadvantages.

6
 INTRODUCTION

After Independence in 1947, India has developed into open Market Economy. In Early 1990’s
Started the Process of liberalization and reduced controls on foreign trade and investment. It has
served to accelerate the country's growth rate with a forecast to rise to 7.5% in financial year
2015/16. (Business Knowledge Resource online, 2015) India has a well-developed tax structure.
The power to levy taxes and duties is distributed among the three tiers of Government, in
accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union
Government is empowered to levy are: -
Income Tax (except tax on agricultural income, which the State Governments can levy),
Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the
State Governments are: - Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on
transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land
used for agricultural/non-agricultural purposes),
Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to
levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within
areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply,
drainage, etc.

In the wake of economic reforms, the tax system in India has under gone a radical change, in line
with the liberal policy. Some of the changes include: - rationalization of tax structure;
progressive reduction in peak rates of customs duty; reduction in corporate tax rate; customs
duties to be aligned with ASEAN levels; introduction of value added tax; widening of the tax
base; tax laws have been simplified to ensure better compliance. Tax policy in India provides tax
holidays in the form of concessions for various types of investments. These include incentives to
priority sectors and to industries located in special area/ regions. Tax incentives are available
also for those engaged in development of infrastructure.

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Tax, is the payment we make to the Government, for a good/service. It is this money that Govt
uses for all the functions it is expected to do. Military, Infrastructure - Economic and Social,
Basic amenities, Welfare etc.
In India, the Taxes are classified in to two types, direct taxes and indirect taxes.

1. Direct Taxes are those which are paid directly by the individual or organization to the
imposing authority. They are levied on profit and income.

2. Indirect Taxes are those which are not paid directly by the individual or organization to
the imposing authority. They are levied on goods and services and not on income and
profits.

A) Direct Taxes are of following types: -

a) Corporation tax
b) Taxes on income
c) Estate duty
d) Interest Tax
e) Wealth Tax
f) Gift Tax
g) Land Revenue
h) Agricultural tax
i) Hotel receipts tax
j) Expenditure tax
k) Other’s

B) Indirect Taxes are of following types: -

a) Customs
b) Union excise duties
c) Service tax
d) State Excise duty

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 e) Stamp and registration fees
f) General Sales tax
g) Taxes on vehicle
h) Entertainment tax
i) Taxes on goods and passengers
j) Taxes and duties on electricity
k) Taxes on purchase of sugarcane
l) others

In spite of Many reforms, Indian Tax structure faces many complexities and, problems like
multiplicity of taxes, dominance of indirect taxes, adhocism, bias in incidence of taxes,
complexity and corruption, imbalance in tax system, lack of built in elasticity, squandering away
of resources.

Review of literature
Kumat, (2014) in his research paper on Taxation laws of India- overview and fiscal analysis
focuses on the overview of Indian tax system and challenges ahead. He thinks that there should
be a coordinated consumption tax system. He also states that improving the productivity of
Indian tax system continues to be a major challenge in India.

(Jha, 2013) in his research paper on Tax structure in India& its effect on corporate and individual
in India suggests that high dependence on indirect taxes should be reduced and direct taxes
should be in increased on super rich to compensate the losses. He also states that corporate tax
evasion techniques like transfer pricing should be checked.

9
(Rao, 2005) in his research paper on Tax system reforms in India: achievement and challenges
ahead focuses on the union and state level reforms. He states that the reforms are just the
beginning and considerable distance in reforming the tax system is yet to be covered.

Need of the study

The Development of any country’s economy depends directly on the Country’s Taxation
Structure. A taxation Structure which facilitates easy of doing business and having no chance for
tax evasion brings prosperity to country’s economy. On the other hand, taxation structure which
has provision for tax evasion and one which do not facilitate ease of business slow down the
growth of country’s economy. Therefore, as taxation structure plays an important role in
country’s development. There is always need for study taxation structure to make taxation
structure easier and simpler.

STATEMENT OF PROBLEM
Prosperity to a country’s economy. On the other hand, taxation structure which has provisions
for tax evasion and the one which does not facilitate ease of doing business slows down the
growth of country’s economy. Therefore, as taxation structure plays an important role in
country’s development.

Indian taxation structure has gone through many reforms and still it is very far ahead from being
a ideal taxation structure. Many problems like Tax Evasion, Reliance on indirect taxes, Black
money, existence of parallel economy show that Indian taxation system requires some major
reforms in the future ahead to address all these problems.

Objectives

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1) To Study the Tax Structure of India
2) To identify problems in the existing taxation structure

RESEARCH METHODOLOGY

This Research paper is purely based on secondary data. Various figures are obtained from the
different websites of government of India.

ANALYSIS OF INDIAN TAX STRUCTURE

Following are the details of the amount raised from Direct Taxes and Indirect taxes by combined
both central and state governments.

YEAR 2010-11 2011-12 2012-13 2013-14

Revenue receipt 450822.09 501394.92 574680.54 679297.56
direct tax
Revenue receipt 820843.26 966495.51 1151867.99 1353191.51
indirect tax

Source- (Public Finance Statistics, Ministry of Finance, 2013-14)

*2014-15 data is not taken as it is not yet available

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Interpretation:

From the above data it is seen that there is more dependence on indirect taxes for revenue
collection than direct taxes.
It is almost clear from the above graph that the amount received from Indirect taxes is almost
double from the amount received from direct taxes

Over dependence on Indirect Taxes is clearly visible

We will understand the Advantages and Disadvantage of both indirect and direct tax.

Advantage of indirect tax

 Convenient
Indirect taxes are imposed on Manufacturers, sellers and traders but their burden is imposed
on the consumers of the goods and services and thus these consumers are the final tax payers.
They are convenient from point of view as tax payer as he pays indirect taxes in small amounts.

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Also, they are convenient to government as they collect these taxes in lumpsum from the
manufacturers.

 Difficult to evade

Elastic: - Some of the indirect taxes are elastic in nature, when government wants to raise the
revenue,
As in many cases the selling price is inclusive of indirect taxes, it is very difficult to evade these
taxes.
Wide coverage: indirect taxes have more wide coverage than the direct taxes as majority of the
goods and services have indirect taxes included in their price. So, the consumers have to pay
them.
Elastic: some of the indirect taxes are elastic in nature, when government wants to raise the
revenue, they increase the indirect taxes.
Universality: indirect taxes are paid by both rich and poor people so they have the universal
appeal.
Pattern of production: By imposing on certain commodities or series, government can control
the pattern of production.

 Individual may not demotivate to work and save:

As indirect taxes are not depending on income, individual may not get demotivated to work and
save.

 Inequitable: -The Burden of indirect taxes is more on poor people than rich people.
Hence indirect taxes are considered to be inequitable.

 Uneconomical: - As government has to make a lot of expenses for collection of the

indirect taxes. These taxes are considered as uneconomical. Final consumer has to pay
much higher amount than received by the government.

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  Uncertainty: -Amount of indirect tax collection cannot be predicted as increase in
indirect tax result in increase in price of the commodity and thus reduces the demand of
the commodity. Hence there is always uncertainty over the amount of indirect taxes
collected.

 Inflationary: - As indirect taxes increases the prices of the commodity, they are
considered as inflationary. If Government depends more on indirect taxes, then inflation
will keep on increasing.

 Non- Awareness: - There is lack of awareness among the tax payers of indirect taxes as
nobody knows that he is paying taxes as it is included in the price.

 Evasion: - There is more chance of Tax Evasion as Manufacturers can collect taxes from
people and pay only fewer taxes with the understanding of government officials.

 Discourage Industries: -The raw material used by the industrial sector is taxed
indirectly. Similarly finished goods are taxed with increases the price of the product
resulting in demand reduction. In this way indirect taxes discourage industries.

 Unfair Profit: - The producers increase prices of commodities to maintain their profit
margin. Hence burden is on consumers.

 Unemployment: - Due to increase in prices of commodities to maintain their profit

margin. Hence burden is on consumer.
Similarly, direct taxes also have their own advantages and disadvantages.

ADVANTAGE OF DIRECT TAXES: -

Equitable: - The burden of direct taxes cannot be shifted hence they are progressive and
equitable in nature.

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Economical: - The cost of collection of direct tax is low. Mostly they are collected at source.
Hence the direct taxes are economical.

Certain: - there is certainty on the amount of direct taxes to be collected from both the sides.
Tax payers know their income and thus know the amount of taxes they would be required to pay.
Similarly, tax authorities also know about the income expected from direct taxes.

Productive: - Direct taxes are productive in nature. As the community grows in numbers and
prosperity, the returns from direct taxes also grow.

Means of developing civic sense: - In case of direct taxes, the people know that they are paying
taxes and it develops consciousness among the people. They know their right to ask government
how the government is using the money for development of the nation. Thus, direct taxes
increase the civic consciousness.

DISADVANTAGE OF DIRECT TAXES: -

Inconvenient: - Direct taxes pinches the payer. The direct taxes are thus inconvenient, nobody
can help feeling the pinch.

Evadable: - A taxpayer can submit false return and evade the taxes. Hence direct taxes are tax
on honesty. Honest people are suffered more in direct taxes than the dishonest people.

Social conflict: - Direct tax encourages social conflict as not every part members of the society
has to pay direct taxes.

Discourage saving and investment: - Excessive increase in direct taxes may discourage saving
and investment which in long term will affect country’s economy.
Proportion of different direct taxes under direct taxes heading for the year 2013-14

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 Name of the direct tax Amount collected (Rs crore) % share in total direct tax
Corporation tax 419520.00 61.75%
Taxes on income 240922.10 35.47%
Estate duty 0 0.00%
Interest tax 0 0.00%
Wealth tax 950.00 0.13%
Gift tax 0 0.00%
Land revenue 11744.01 1.73%
Agricultural tax 134.59 0.02%
Hotel Receipts 90.04 0.01%
Expenditure Tax 0.00 0.00%
others 5936.82 0.87%
Source- {Public Finance Statistics, Ministry of Finance, 2013-2014}

Interpretations: - The largest amount of indirect tax is generated from sales i.e. 37%, service
tax constitutes up to 13%, union excise duties 15%, customs 14%, state excise duties 7%, stamps
and registration 7%, and taxes and vehicle 3% and remaining all others 4%

Cost incurred by government on collection of tax in the year 2013-14(in Rs crore)

Tax Collection Bodies:

The three bodies which collect the taxes in India have clearly defined the rules on what type of
taxes they are permitted to collect.
 The Central Government: income tax, custom duties, central excise duty.
 The State Governments: tax on agricultural income, professional tax, value- added tax,
state excise duty, stamp duty.
 Local Bodies: property tax, water tax, other taxes on drainage and small services.

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GST:

In India, the three government bodies collected direct and indirect taxes until 1 July 2017 when
the Goods and Services Act (GST) was implemented. GST incorporates many of the indirect
taxes levied by states and the central government. What does the GST mean for your money?

Some of the taxes GST replaced include:

 Sales Tax
 Central Excise Duty
 Entertainment Tax
 Octroi
 Service Tax
 Purchase Tax
It is a multi-stage destination-based tax. Multi-stage because it is levied on each stage of the
supply chain right from purchase of raw material to the sale of the finished product to the end
consumer whenever there is value addition and each transfer of ownership.
Destination- based because the final purchase is the place whose government can collect GST. If
a fridge is manufactured in Delhi but sold in Mumbai, the Maharashtra government collects
GST.
A major benefit is the simplification of taxation in India for government bodies.
GST has three components:
 CGST-Stands for Central Goods and Services Act. The central government collects
this tax on an intrastate supply of goods or services.
(Within Maharashtra)
 SGST: Stands for State Goods and Services Tax. The state government collects this tax
on an intrastate supply of goods or services.
(Within Maharashtra)
 IGST: Stands for Integrated Goods and Services Tax. The central government collects
this for inter-state sale of goods or services.

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(Maharashtra to Karnataka)
Other Government Bodies:
For a smooth implementation of the Indian tax system, there are bodies dedicated to it.
Popularly known as the revenue authorities.
 CBDT: The Central Board of Direct Taxes is a part of the revenue department under the
Ministry of Finance. It has a two-fold role. One, it provides important ideas and inputs for
planning and policy with regard to direct tax in India. Second, it assists the Income Tax
department in the administration of direct taxes.
 CBEC: The Central Board of Excise and Customs deals with policy formulation with
regard to levy and collection of customs and central excise duties and service tax.
 CBIC: Post GST implementation, the CBEC has been renamed as the Central Board of
Indirect Taxes & Customs (CBIC). The main role of CBIC is assisting the government in
policy-making matters related to GST.

Benefits of Taxes:
While paying taxes may not be a pleasant feeling, however, it is prudent to understand that tax
paid by every single individual contributes towards the country’s administration and resources
required for its economic progress.

 It promotes savings as well as investments. If an individual makes certain set of

investments, a part amount of the same would be tax exempted, thereby enabling him or
her to pay reduced amount of taxes.

 Paying tax also works as a proof that you are not only disciplined in filing your tax
returns but also helps at the time of loan application. This is because at the time of
purchasing a home loan, the bank requires proof of whether the applicant has filed his or
her taxes regularly.
New Article 366 (12A) of the Indian Constitution (GST India.com, 2016) defined Goods and
Services Tax (GST) to mean any tax on supply of goods or services or both except taxes on
the supply of alcoholic liquor for human consumption. New Article 366(26A) defines service

18
 to mean anything other than goods. Existing Article 366(12) defines goods to include all
materials, commodities, and articles. As per the government, the Goods and Services Tax
(GST) is regarded as a ‘Reform’ rather than amendment in the existing Indian taxation
system to sort out all backdoors and cons of the indirect taxation system. India was one of the
123 countries in the world following the VAT taxation system. VAT was designed and
introduced on January 17, 2005 at the Centre and State levels by finance minister P.
Chidambaram. VAT replaced Central Excise Duty Taxation at the national level and Sales
Tax System at the state level, bringing major reform in the taxation system. Goods and
Services Tax (GST) was proposed in 2014 to be implemented with effect from (w.e.f) June
2016. The GST implementation is “dual” in nature - one component is implemented by
Centre (CGST) and another component by State (SGST). The base of tax would be the same
by Centre and State governments. GST came into effect in India on July 1, 2017. With some
major modifications, the GST would now have three prime models:

(i) Central GST: GST to be levied by the Centre.

(ii) State GST: GST to be levied by the States.
(iii) Dual GST: GST to be levied by the Centre and the States concurrently.

Impact of GST on the Indian Economy: Advantages and Challenges

of GST Implementation

(1) Impact of GST on the Indian Economy: GST will impact the overall taxation system of
the Indian economy. It will improvise the country's GDP ratio and also control inflation to a
certain extent. However, the reform will mainly be advantageous to the manufacturing
industry, but will make some things challenging for the service sector industry. GST is
expected to raise the GDP growth from 1% to 2%, but these figures can only be analyzed
after successful implementation. Some countries have faced a mixed response in growth like
New Zealand saw a higher GDP as compared to countries like China, Thailand, Australia,

19
 and Canada (Shokeen, Banwari, & Singh, 2017). The GST rate is implemented in various
slabs like 5%, 12%, 18%, and 28%, which will automatically provide great tax increments to
the government and the manufacturing sector will face immense growth with reduction in tax
rate. There is definitely something good for everyone. Various unorganized sectors which
enjoy the cost advantage equal to tax rate which will be brought under GST. This will make
various sectors like Hardware, Paint, Electronics etc. under the tax slab. GST requires
everything to be planned meticulously for organized rate of taxation. There are still lots of
sectors which are to be discussed under GST and this requires proper planning. For the
common man and different companies, the collection of Central and State taxes will be done
at point of time when sales originate, both components will be charged on manufacturing
costs and price of the product will downgrade and consumption will thereby increase
(Shokeen et al., 2017).
(2) Impact of GST on Various Sectors: Goods and Services Tax (Tanvi, Srivastava &
Srivastava, 2013) will unite the Indian economy into one common market under a single
umbrella of taxation rates, leading to easiness of starting and doing businesses, leading to
increase in savings and cost reduction among various sectors. Some industries will be
empowered by GST because of reduction in tax rates, while some will lose because of higher
rate of GST interests (Panda & Patel, 2010). In this section, we discuss various sectors and
elaborate the impact of GST on them: (i) IT Companies: GST will allow more
implementation of digital systems and services. GST will increase the rate of tax from 14
-15% to 18%, which will increase the cost of electronic products like mobile phones, laptops,
etc. (Adhana, 2015). (ii) FMCG Industry: GST will have a significant impact on the FMCG
sector. Some food items are exempted under GST like grains and cereals, milt, meat, fish,
fruits and vegetables, candy etc. Before GST, FMCG companies paid 24-25% tax including
Excise Duty etc. With GST, the rate of return would be 17-19% leading to strong impact in
production and consumption (Jain, 2013). (iii) Online Shopping: With the introduction of
GST, various Ecommerce companies will face much burden of work in rate of filling taxes
and cost will be increased. (iv) Telecom Sector: With the current VAT charges of 15% being
replaced by18% GST rate, the price of mobile calling, SMS, and broadband services would
be impacted. This will have a negative impact for big telecom giants like Airtel, Vodafone,
Idea, etc.

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 Problems of current tax structure in India

(2) Introduction to the Goods and

Services Tax (GST) : New Article 366
(12A) of the Indian Constitution (GST
India.com, 2016) defined Goods and
Services Tax (GST) to mean any tax on
supply of goods or services or both
except taxes on the supply of alcoholic
liquor for human consumption. New
Article 366(26A) defines service to
mean anything other than goods. Existing
Article 366(12) defines goods to include
all materials, commodities,
and articles.
21
 As per the government, the Goods and
Services Tax (GST) is regarded as a
‘Reform’ rather than amendment in
the existing Indian taxation system to sort
out all backdoors and cons of the indirect
taxation system. India was one
of the 123 countries in the world
following the VAT taxation system. VAT
was designed and introduced on January
17, 2005 at the Centre and State levels by
finance minister P. Chidambaram. VAT
replaced Central Excise Duty
Taxation at the national level and Sales
Tax System at the state level, bringing
major reform in the taxation system.
Goods and Services Tax (GST) was
proposed in 2014 to be implemented with
effect from (w.e.f) June 2016.

22
The GST implementation is “dual” in
nature - one component is implemented
by Centre (CGST) and another
component by State (SGST). The base of
tax would be the same by Centre and
State governments. GST came into
effect in India on July 1, 2017. With some
major modifications, the GST would now
have three prime models :
(i) Central GST : GST to be levied by
the Centre.
(ii) State GST : GST to be levied by the
States.
(iii) Dual GST : GST to be levied by the
Centre and the States concurrentl
The following are the limitations of the study: (a) GST is still in maturity phase, so tax
reforms can occur from time to time via GST council meetings regarding finalization of tax
rates and even imposition of new rates and even deduction of existing rates, (b) most of the
data cited in the paper was speculatively exploratory in nature as GST meetings are going
and still, a lot more needs to be done, (c) final conclusions may vary considering different
perceptions. After GST implementation, there is emergent requirement of modern
technology-based infrastructure like GSTNET for successful monitoring of taxation system
as well as the GST Council should regularly conduct meetings for change in tax reflections.

23
24
  (2) Introduction to the Goods and
Services Tax (GST) : New Article
366 (12A) of the Indian Constitution
(GST
 India.com, 2016) defined Goods and
Services Tax (GST) to mean any tax
on supply of goods or services or both
 except taxes on the supply of alcoholic
liquor for human consumption. New
Article 366(26A) defines service to
 mean anything other than goods.
Existing Article 366(12) defines goods
to include all materials, commodities,
 and articles.
 As per the government, the Goods
and Services Tax (GST) is regarded as
a ‘Reform’ rather than amendment in
 the existing Indian taxation system to
sort out all backdoors and cons of the
indirect taxation system. India was one
25
  of the 123 countries in the world
following the VAT taxation system.
VAT was designed and introduced on
January
 17, 2005 at the Centre and State levels
by finance minister P. Chidambaram.
VAT replaced Central Excise Duty
 Taxation at the national level and
Sales Tax System at the state level,
bringing major reform in the taxation
system.
 Goods and Services Tax (GST) was
proposed in 2014 to be implemented
with effect from (w.e.f) June 2016.
 The GST implementation is “dual” in
nature - one component is
implemented by Centre (CGST) and
another
 component by State (SGST). The base
of tax would be the same by Centre
26
 and State governments. GST came
into
 effect in India on July 1, 2017. With
some major modifications, the GST
would now have three prime models :
 (i) Central GST : GST to be levied by
the Centre.
 (ii) State GST : GST to be levied by
the States.
 (iii) Dual GST : GST to be levied by
the Centre and the States concurrentl
(2) Introduction to the Goods and
Services Tax (GST) : New Article 366
(12A) of the Indian Constitution (GST
India.com, 2016) defined Goods and
Services Tax (GST) to mean any tax on
supply of goods or services or both
except taxes on the supply of alcoholic
liquor for human consumption. New
Article 366(26A) defines service to
27
mean anything other than goods. Existing
Article 366(12) defines goods to include

all

CONCLUSION
Primarily, the concept of GST was introduced and proposed in India a few years back, but
implementation has been done by the current BJP government under the able leadership of Prime
Minister Shri Narendra Modi on July 1, 2017. The new government was in strong favor for the
implementation of GST in India by seeing many positive implications as discussed above in the
paper. All sectors in India - manufacturing, service, telecom, automobile and small SMEs will
bear the impact of GST. One of the biggest taxation reforms- GST will bind the entire nation
under a single taxation system rate. As forecasted by experts, GST will improvise tax collections
and boost up India's economic development and break all tax barriers between Central and State
Governments. No doubt, GST will give India a clear and transparent taxation system, but it is
also surrounded by various challenges as discussed in this paper. There is need for more
analytical based research for successful implementation.
GST will allow India to better negotiate its terms in the international trade forums. GST aimed at
increasing the taxpayer base by bringing SMEs and the unorganized sector under its compliance.
This will make the Indian market more stable than before and Indian companies can compete
with foreign companies

28
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International Journal of Engineering & Management Research, 5 (4), 332 - 338.
2. Central Board of Excise and Customs, Ministry of Finance. (2017). Revised GST rate for
certain goods. Retrieved from http: / / www.cbec.gov in / resources/ / ht docs cbec / gst
/gst_rates_approved%20_by_gst_council%20_11.06.2017.pdf
3. Chakraborty, P., & Rao, P. K. (2010, January 2). Goods and services tax in India: An
assessment of the base. Economic and Political Weekly, 45 (1), 49 - 54.
4. Garg, G. (2014). Basic concepts and features of goods and services tax in India.
International Journal of Scientific Research and Management (IJSRM), 2 (2), 542 - 549.
5. Goods and Services Tax Council. (2017). Retrieved from http://www.gstcouncil.gov.in/
6. Mehara, Puja (27 June 2017). “GST, an old tax”. The Hindu – opinion. Retrieved 3 July
2017
7. The Economic Times (2009) Featured Articles from The Economic Times.
8. Gst India (2015) Economy and Policy.
9. Mehra P (2015) Modi govt.’s model for GST may not result in significant growth push.
The Hindu.
10. Sardana M (2005) Evolution Of E? Commerce in India Part 3.
11. TRAI (2015) Highlights of Telecom Subscription Data as on 28th February.
12. Patrick M (2015) Goods and Service Tax: Push for Growth. Centre for Public Policy
Research (CPPR).

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Interpretations:-

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