Title of the Project

“TRANSITION TO GST REGIME:”

RATIONALE AND IMPASSE

Submitted by -
Baivaw Jain
Room No. – 13
Roll No. - 1538

Supervised by-
Himadri Karmakar

April 2024

St. Xavier’s College (Autonomous)

Department of Commerce

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 TABLE OF CONTENTS

S. No. TOPIC PAGE

NUMBER
1 INTRODUCTION 3

2 OBJECTIVE OF THE STUDY 5

3 REVIEW OF LITERATURE 6

4 RESEARCH METHODLOGY 8

5 CONCEPTUAL FRAMEWORK 9

6 DATA ANALYSIS AND FINDINGS 15

7 CONCLUSION AND RECOMMENDATIONS 21

8 REFERENCES 23

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 INTRODUCTION

Following the implementation of GST, a unified tax system will be established in the supply chain.
This system will allow for the consolidation of all previously paid taxes by individuals, which will
ultimately lead to reduced pricing. In addition, he examined the taxes levied on the items as well as
their intrinsic value.

Furthermore, GST possesses superior tax management skills, hence eliminating the possibility of tax
manipulation. The Goods and Services revenue (GST) has a broad reach, encompassing a large
number of taxpayers at every level of revenue generation, resulting in maximum tax benefits.

Ultimately, consumers reap the advantages of these benefits. The general people experiences the
actual impact of the economy when essential prices are influenced. Lower prices for goods and
services that the general public consumes regularly contribute to a stronger economy, whereas
higher inflation indicates public dissatisfaction with government policies. The government policy's
success hinges on public satisfaction. Insufficient satisfaction can hinder the effectiveness of policies,
falling short of governments' expected outcomes. I am currently attempting to comprehend the
implications of the new Goods and Services Tax (GST) inside the existing tax framework in India. The
existing tax system imposes an indirect tax on all services consumed, which have previously been
subject to taxation at a previous point in time.

The Goods and Services Tax (GST) imposes a tax rate ranging from 0 to 5% on food items, however it
does not have a direct impact on food costs. Beauty services, including salons and other beauty
treatments, become more costly when the GST rate is raised to 3% and no input tax deduction is
permitted for these activities.

The implementation of products and Services Tax (GST) has led to a rise in the everyday expenses
associated with home products. Approximately 54% of the population has expressed dissatisfaction
with the implementation of the new indirect tax system, citing an increase in their daily household
expenditures. This change has had a widespread impact on the general populace of the nation. The
data was published following a survey conducted by a civic platform associated with the consumer
affairs division of the central government.

Over 40,000 candidates took part in the poll, providing responses to a range of questions regarding
the new tax structure. During the 21st GST Council meeting in Hyderabad, it was reported that 50%
of the participants stated that the implementation of GST has led to a rise in the housing expenses.
Augment. According to a survey done by the Local Circle of Consumer Affairs, around 54% of
individuals reported that the implementation of GST has led to an almost 30% rise in their monthly
household expenses heightened A rose. The consumer lodged a complaint stating that the
organization levied GST on top of the Maximum Retail Price (MRP), made a cash payment, and
declined to extend the deadline for filing a sales complaint on the invoice or report her Goods and
Services Tax (GST) on the GSTR-1 form and expresses dissatisfaction.

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During the 21st meeting of the GST Board, the government decreased the tax rate on 30 specific
commodities. During the 22nd and 25th Council meetings, the Government once again decreased
the Goods and Services Tax (GST). Prices for a range of things, including home goods, have been
adjusted, resulting in advantages for the general population. Starting on November 10, 2017, the tax
on certain commodities, including condensed milk, refined sugar and sugar cubes, pasta, curry paste,
mayonnaise and salad dressings, mixed seasonings and mixed spices, and diabetic food, was
decreased from 18% to below 12%. From January 18, 2018, additional things such as affordable
cotton candy and 20-liter bottles of drinking water will be made available.

Prior to GST implementation, many countries, like India, had convoluted tax systems with numerous
indirect taxes such as excise duty, service tax, and value-added tax (VAT) imposed by both central and
state government. This resulted in tax layering, increased costs for compliance, and administrative
inefficiencies. The existing tax system often caused economic distortions, hindered interstate trade,
and complicated business operations. Recognizing the necessity for tax reform, governments sought
to create a unified national market and enhance the efficiency of the overall tax system. The principal
aim of the GST transition is to streamline the tax structure by substituting many indirect taxes with a
unified, all-inclusive tax. This simplification minimises tax evasion, increases transparency, and
lessens the burden of compliance for taxpayers. The Goods and Services Tax (GST) is anticipated to
improve the business climate, draw in investment, and boost economic growth by streamlining the
tax structure and lowering compliance expenses. It promotes more effective resource allocation and
boosts production in a number of industries.

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 OBJECTIVE OF THE STUDY

 To analyze the impact of the transition to the Goods and Services Tax (GST) regime on
businesses, consumers, and the overall economy.
 To understand the challenges faced by different stakeholders during the implementation of
GST.
 Assess the effectiveness of the new tax system in promoting transparency and simplifying tax
compliance.
 To understand the major challenges faced by people in complying with GST regulations.

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 REVIEW OF LITERATURE

1. Goods and Services Tax (GST): A Comparative Analysis of Indirect Tax pattern in India-
In the given article published by Dr. V. Nirmala Devi, the author has given the basic introduction of
GST, history of GST in India and described the planning of a country to reach its economic goal in
compliance with GST regulation.

2. Impact of GST on Indian Economy:

The above mentioned article has been published by Shefali Dani. In the given article the author has
described the benefits of GST implementation on the Indian economy. It also described the
advantages and disadvantages of GST implementation on particular sectors.

3. Impact of GST on Small Scale Sector:

This article has been published by Dr. V. Sudha and Dr. C. Hariharasudhan. In the given article, the
author has given a basic introduction of GST, described the challenges faced by small sector after the
introduction of GST in India. It has also discussed the importance of GST regulation for the growth of
Indian economy.

4. Impact of GST on Indian Economy:

The article has been published by K. Khasimpeera. He discovered that both good and negative effects
of the GST will be felt by the Indian economy. The economy will have greater positive effects if the
government takes effective measures to improve the GST system. They also discovered that,
following the demonetization of currency, the Indian government made a commendable attempt by
implementing the Goods and Services Tax (GST).

5. Policy Measures and Initiatives for GST Transition:

A Comparative Analysis by Sanjay Kumar and Manoj Pant. This report provides insights into best
practices and lessons gained by comparing policy measures and efforts implemented by various
nations throughout the GST transition.

6. Technological Solutions for GST Compliance:

A Review of Case Studies by Neha Sharma and Vivek Singh. This study examines case studies of
businesses that successfully adopted technology to comply with GST laws, stressing both best
practices and difficulties.

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7. GST Implementation and Economic Growth:
An Overview of Global Perspectives by Deepak Mishra and Renuka Garg. Using lessons learned from
other nations' experiences, this assessment offers a worldwide perspective on the connection
between the introduction of the GST and economic growth.

Policymakers, companies, and scholars can learn a lot from these articles, which give a range of
viewpoints and analysis on the shift to the GST regime.

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 RESEARCH METHODOLOGY

In-depth study of the shift to the GST regime will be provided in this dissertation, which will be helpful
for researchers, businesses, and policymakers who are tackling tax reform and policy implementation.
This study intends to add to the current conversation on GST reform and its effects on economic
development and governance by synthesising current information and producing fresh insights via
empirical analysis and case studies.

• Review of Literature: Analysing the body of literature to understand the theoretical

foundation and historical research on GST transitions globally and within the particular study
area.
• Data Collection: Collecting primary and secondary data by means of surveys, interviews, and
the examination of official data and reports from the industry.
• Data Analysis: Utilising both quantitative and qualitative data analysis methodologies, such
as theme analysis to find patterns and insights and statistical methods to measure impact.
• Cost-Benefit Assessment: Evaluating the costs and advantages of the GST transition, taking
into account efficiency improvements and implementation expenses, in order to assess its
economic effects.
• Legal and Regulatory Examination: Examining modifications to tax laws and regulations in
order to pinpoint legal obstacles and their effects on businesses and decision-makers.

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 CONCEPTUAL FRAMEWORK

RATIONALE

1. Enhance GDP Growth: The rationalization of taxes and the ease of doing business under GST
are expected to contribute to increased economic activities and, consequently, higher GDP
growth.
2. Encourage Formalization of Economy: GST incentivizes businesses to operate within the
formal economy by providing benefits such as input tax credit. This helps in reducing the size
of the informal economy and brings more businesses into the tax net.
3. Cooperative Federalism: The dual structure of GST involves both the central and state
governments, fostering cooperative federalism. The GST Council, consisting of representatives
from the center and states, collaboratively decides on tax rates and other related issues.
4. Simplify Compliance: GST introduced a uniform and online compliance system, making it
easier for businesses to file returns and meet tax obligations. This simplification reduces the
compliance burden on businesses.
5. Consumer Benefits: The rationalization of tax rates and the elimination of hidden taxes
contribute to lower prices for goods and services, benefiting consumers.

In summary, the rationale behind the implementation of GST includes simplifying the tax structure,
creating a unified market, reducing tax evasion, boosting economic activities, and fostering
cooperative federalism, ultimately aiming for a more efficient and transparent tax system.

IMPASSE
Historically, there have been challenges and concerns associated with GST implementation in
various countries, including India. Some common issues that could potentially lead to impasses or
difficulties include:
1. Complexity and Compliance Burden: Businesses may face challenges in adapting to the new
tax regime, especially with the complexity of GST filings and compliance requirements.
2. Technology Issues: The successful implementation of GST often relies on robust technology
infrastructure. Technical glitches in the GSTN (Goods and Services Tax Network) or other
technological challenges can impede the smooth functioning of the system.
3. Tax Rate Structure: Disagreements or debates over the appropriate tax rates for different
goods and services can be a source of contention. Balancing revenue considerations and the
impact on consumers and businesses is crucial.

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 4. Transition Issues: The transition from the previous tax system to GST can be challenging for
businesses. Issues related to input tax credit, valuation of goods, and transitional provisions
can create complexities.
5. GST Council Decision Making: The decision-making process within the GST Council, which
includes representatives from both the central and state governments, may face challenges
due to differing opinions or interests.

ADVANTAGES OF GST
 Simplified Tax Structure: Goods and Services Tax (GST) is a comprehensive indirect tax that
has replaced multiple indirect taxes in India. One of the key advantages of GST is the
simplified tax structure it introduces. Here are some of the advantages related to the
simplified tax structure of GST:

Single Tax Rate: GST aims to bring about a uniform tax structure by subsuming various indirect
taxes. It replaces a complex tax system with a single tax, making it easier for businesses to
understand and comply with tax regulations.

Elimination of Cascading Effect: GST eliminates the cascading effect of taxes, which occurs when
taxes are levied on top of other taxes. In the pre-GST era, taxes were imposed on both goods and
services at multiple stages, leading to tax on tax. GST is designed to tax only the value addition at
each stage, reducing the overall tax burden.

Simplified Compliance: Under the GST regime, businesses are required to file a single consolidated
return, which combines various taxes into one. This reduces the number of filings and makes
compliance more straightforward for businesses.

Harmonization of Laws: GST brings uniformity in tax laws across the country. Previously, different
states had different tax laws, making interstate transactions complex. With GST, there is greater
harmonization, making it easier for businesses to operate across state borders.

Online Filing and Processing: GST is a technology-driven tax system, and it promotes online filing
and processing of returns. This not only reduces paperwork but also enhances efficiency and
transparency in the tax administration.

Simplification of Tax Structure for Services: In the pre-GST era, services were taxed differently from
goods, leading to confusion and complexity. GST simplifies the taxation of services by treating them
on par with goods, streamlining the tax structure.

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Overall, the introduction of GST and its simplified tax structure have had a positive impact on
businesses, promoting ease of compliance, reducing the tax burden, and enhancing the overall
efficiency of the indirect tax system.

 Reduction in Tax Evasion: Goods and Services Tax (GST) is a comprehensive indirect tax that
has been implemented in many countries, including India, with the aim of simplifying the tax
structure and reducing tax evasion. One of the key advantages of GST is its effectiveness in
curbing tax evasion. Here's a detailed explanation of how GST achieves this:

Transparent Tax System: GST replaces multiple indirect taxes with a single, transparent tax system.
It subsumes various taxes like excise duty, service tax, VAT, etc., into one unified tax. This
transparency makes it difficult for businesses to manipulate or hide their transactions to evade
taxes.

Input Tax Credit (ITC) Mechanism: GST introduces the Input Tax Credit mechanism, which allows
businesses to claim credit for the taxes they have paid on inputs. This means that taxes paid at each
stage of the supply chain are accounted for and credited. As a result, businesses have a strong
incentive to deal with other GST-compliant businesses to ensure they can claim ITC. This reduces
the likelihood of transactions happening in the informal or unregulated sector where tax evasion
is more prevalent.

Electronic Documentation and Filing: GST mandates electronic filing and documentation of
transactions through the GSTN (Goods and Services Tax Network) portal. This reduces the reliance
on physical records and paperwork, making it easier for tax authorities to monitor and track
transactions. The digital trail ensures better scrutiny, making it difficult for businesses to
underreport their income or manipulate financial records.
Real-time Monitoring and Analytics: The GSTN provides real-time data on transactions, making it
easier for tax authorities to monitor business activities. Advanced analytics tools can be employed
to identify patterns, anomalies, and potential tax evasion. This proactive approach allows tax
authorities to take prompt action against businesses engaging in fraudulent activities.

Anti-Profiteering Measures: GST includes anti-profiteering measures to ensure that businesses

pass on the benefits of reduced tax rates to consumers. This helps in preventing businesses from
increasing profit margins by not reducing the prices of goods and services after the introduction of
GST. By discouraging such practices, the government ensures that businesses stay compliant and
do not resort to tax evasion to enhance profits.

In conclusion, the reduction in tax evasion is a significant advantage of GST, and it is achieved
through a combination of transparency, accountability, and the use of technology. The streamlined

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and unified nature of GST makes it a powerful tool for tax authorities to monitor and regulate
economic activities, ultimately contributing to a more robust and fair taxation system.

 Consumer Benefits: Goods and Services Tax (GST) is a comprehensive indirect tax that has
replaced multiple taxes in India. It was introduced with the aim of simplifying the tax
structure, reducing tax evasion, and promoting economic growth. The advantages of GST
from a consumer perspective include:

Wider Tax Base and Increased Revenue for Development: GST widens the tax base by including
more sectors within the tax net. This broader tax base ensures that more economic activities are
taxed, leading to increased government revenue. The additional revenue can be utilized for
infrastructure development, social welfare programs, and other initiatives that benefit the overall
economy.

Uniform Tax Rates Across States: Earlier, different states had different tax rates and structures. GST
aims to create a uniform tax structure across the country. This reduces price disparities among
states and ensures that consumers are not adversely affected by varying tax rates when purchasing
goods or services from different regions.

E-commerce Facilitation: GST has simplified tax compliance for e-commerce operators. This has
facilitated the growth of the e-commerce sector, providing consumers with a wide range of
products at competitive prices. Additionally, the input tax credit mechanism encourages e-
commerce platforms to streamline their operations and offer better deals to consumers.

Reduction in Black Money Transactions: With the implementation of GST, there is increased
transparency in transactions. This helps in reducing black money transactions as most transactions
are recorded and reported through the GST network. A reduction in black money circulation can
have positive effects on the overall economy and benefit consumers in the long run.

In summary, the advantages of GST from a consumer standpoint include reduced prices, simplified
tax structure, transparency, and accountability. The overall impact is aimed at fostering economic
growth and development, which, in turn, benefits the general public.

 One Nation, One Tax: The Goods and Services Tax (GST) in India, introduced in July 2017,
aims to create a unified and simplified tax structure by subsuming various indirect taxes at
the central and state levels. The "One Nation, One Tax" concept comes with several
advantages:

Boost to Economic Growth: The simplified tax structure and improved business environment
under GST can contribute to increased economic growth.It encourages investment, enhances
competitiveness, and fosters a more business-friendly environment.

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 Positive Impact on Inflation: GST aims to bring down the overall tax burden on goods and services,
which can contribute to controlling inflation in the long run.The elimination of cascading taxes and
a more efficient supply chain can lead to lower prices for end consumers.

Ease of Doing Business: GST simplifies the process of starting and operating a business by unifying
tax regulations across states. It reduces the compliance burden, making it easier for businesses to
focus on their core activities.

Technology Integration: The GST system relies on robust technology infrastructure, promoting
digital transactions and reducing the reliance on manual processes.This technological integration
enhances efficiency, reduces errors, and facilitates better data management.
Global Competitiveness: A unified tax structure and improved ease of doing business can make
Indian goods and services more competitive in the global market. It can attract foreign investment
and promote India as an attractive business destination.

While the implementation of GST faced initial challenges and adjustments, its long-term impact is
expected to be positive, fostering economic growth, improving compliance, and creating a more
business-friendly environment in India.

 Reduction in Litigation: One of the significant advantages of the Goods and Services Tax (GST)
is the reduction in litigation. Before the implementation of GST, India had a complex tax
structure with multiple indirect taxes levied by both the central and state governments. This
complexity often led to disputes and litigation between taxpayers and tax authorities. GST,
introduced in July 2017, aimed to simplify the tax system and streamline compliance. Here's
a detailed explanation of how GST has contributed to the reduction in litigation:

Uniform Tax Structure: GST replaced a plethora of indirect taxes, such as Central Excise Duty, Service
Tax, Value Added Tax (VAT), and others, with a unified tax structure. This uniformity across goods and
services eliminates confusion and reduces the scope for disputes arising from classification issues.

Destination-Based Consumption Tax: GST is a destination-based consumption tax, meaning that the
tax is levied at the point of consumption rather than at the point of origin. This shift in taxation
philosophy minimizes disputes related to the determination of the place of supply and ensures a fair
distribution of tax revenue among states.

Input Tax Credit Mechanism: The input tax credit (ITC) mechanism under GST allows businesses to
claim credit for the taxes paid on inputs used in the production process. This system reduces cascading

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effects (tax on tax) and promotes transparency. With clear guidelines on input tax credit, disputes
related to credit availability and utilization are minimized.

Online Filing and Real-Time Information: GST compliance involves online filing of returns and real-
time reporting of transactions. This digitalized system reduces the chances of manual errors and non-
compliance. Taxpayers have access to a centralized portal where they can verify their transactions,
leading to fewer discrepancies and, consequently, fewer litigations.

Dispute Resolution Mechanism: GST has established a dispute resolution mechanism through the
National Anti-Profiteering Authority (NAA) and the Goods and Services Tax Appellate Tribunal (GSTAT).
These bodies provide an efficient and timely resolution to disputes between taxpayers and tax
authorities, reducing the backlog of cases in traditional courts.

In summary, the reduction in litigation under GST can be attributed to the simplification of the tax
structure, the introduction of a robust dispute resolution mechanism, and the emphasis on
transparency and uniformity in tax administration. These measures collectively contribute to a more
efficient and business-friendly taxation system.

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 DATA ANALYSIS AND FINDINGS

1. How long has your business been in operation?

1-5 years
29% 31%
6-10 years

17% Less than 1 year

23%
More than 10 years

The above given chart shows that the survey conducted has got responses from different types of
businesses operating from different time frames. 31 % of those has been in operations from last 1-5
years, 29% for more than 10 years, 23% for 6-10 years and 17% from last 1 year.

2. Types of Business

1% 1%
Business
21% 24%
Construction

Manufacturing
23%
30% Retail

Service

Wholesale

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From the given chart we can understand that the survey has been conducted from people
of different business backgrounds. The majority of them i.e., 30% are from retail business,
23% of them are from service background, 24% are from manufacturing background, 21%
are wholesalers and rest from construction business.

3. When was your business established?

60
66%

50

40

30 34%

20

10

0
After implementation of GST Act Before implementation of GST Act

In the survey people were asked questions like when was their business established and how
long it has been operating. From the above given chart, we can conclude that most of the
businesses were established before the implementation of GST Act and a small group i.e.
34% were established after implementation of GST Act.

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4. What is annual turnover of your business?

1%
11% 11% Above 10 crore
Less than Rs 20 lakh
29%
48% Rs 1 crore to Rs 5 crore
Rs 20 lakh to Rs 1 crore
Rs 5 crore to Rs 10 crore

The given chart shows the annual income of the businesses from which the data has been
conducted. We can see that 48% of them have an annual turnover of Rs 20 lakhs to 1 crore,
29% have turnover of Rs 1 crore to 5 crores, 11% have turnover of Rs 5 crore to 10 crore and
above.

5. How has the implementation of GST affected your business operation?

Declined
29% 11%
16% Significantly
improved
Slightly improved
44%
Stayed the same

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 The given chart can be used to understand the effect of GST implementation on businesses.
According to most of them it has helped to slightly improve their business, for 29 % of them
it has stayed the same, for 16% of them it has significantly improved and for rest it has
declined.

6. How would you rate the ease of compliance with GST regulations?

60

50

40

30

20

10

0
Difficult Easy Neutral Very Difficult

In the survey conducted people were asked to rate the ease of compliance with GST regulations.
Most of them have neutral response, whereas for many of them compliance with GST regulation
is difficult.

7. What are the major challenges you have faced in complying with GST regulations?

28% 31% Complex filing procedures

41% High compliance costs

Technical glitches in GST

portal

From the given chart, we can understand the difficulties faced by businesses in complying
with GST regulations. Most of them face the problem of high compliance cost and complex
procedure.

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Chi-square test among various factors:

1. For annual income and effect on business after GST compliance:

𝐻0 = There is no significant relationship between annual income and effect on

business after GST compliance.

𝐻1 = There is significant relationship between annual income and effect on

business after GST compliance.

On combining the two responses, a chi-square test was done in IBM-SPSS,

The p-value was found to be 0.062 which is greater than 0.05.

Hence, the null hypothesis is accepted at 5% level of significance.

Based on the analysis of the data, the results of the chi-square test indicate that there
is no statistically significant relationship between annual income and effect on
business after GST compliance.

2. For types of businesses and challenges faced by businesses after GST

implementation:

𝐻0 = There is no significant relationship between types of businesses and challenges

faced by businesses after GST implementation.

𝐻1 = There is significant relationship between types of businesses and challenges

faced by businesses after GST implementation.

On combining the two responses, a chi-square test was done in IBM-SPSS,

The p-value was found to be 0.248 which is greater than 0.05.

Hence, the null hypothesis is accepted at 5% level of significance.

Based on the analysis of the data, the results of the chi-square test indicate that there
is no statistically significant relationship between types of businesses and challenges
faced by businesses after GST implementation.

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3. For age of the business and ease of compliance with GST regulation:

𝐻0 = There is no significant relationship between age of the business and ease of

compliance with GST regulation.

𝐻1 = There is significant relationship between age of the business and ease of

compliance with GST regulation.

On combining the two responses, a chi-square test was done in IBM-SPSS,

The p-value was found to be 0.110 which is greater than 0.05.

Hence, the null hypothesis is accepted at 5% level of significance.

Based on the analysis of the data, the results of the chi-square test indicate that there
is no statistically significant relationship between age of the business and ease of
compliance with GST regulation.

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 CONCLUSION
Ultimately, the adoption of the Goods and Services Tax (GST) system has proven to be a substantial and
revolutionary advancement in the economic domain. The implementation of GST was driven by the
objective of rationalising the indirect tax framework, eradicating the issue of cascading effects, and
establishing a consolidated and streamlined taxation system. Nevertheless, the journey has
encountered difficulties, resulting in a deadlock in certain areas. The justification for implementing GST
was based on the ideals of effectiveness, clarity, and facilitation of commercial activities. The objective
of GST was to consolidate many indirect taxes into a single tax system, with the aim of minimising tax
avoidance, facilitating smooth movement of goods and services across states, and fostering general
economic expansion. The shift was anticipated to result in a more conducive business environment and
streamline compliance for taxpayers. Notwithstanding these favourable objectives, the execution of
GST encountered numerous obstacles. The intricate composition of GST, characterised by several tax
brackets and regulatory obligations, presented challenges for firms, particularly those classified as
small and medium enterprises. The first challenges, including as technological malfunctions in the
GSTN portal and a significant learning process for both enterprises and tax authorities, led to a period
of uncertainty and adaptation.

A further deadlock emerged due to the concurrent implementation of GST by both the federal and
regional authorities. The presence of dual control resulted in coordination challenges and
jurisdictional disagreements, which had a negative impact on the seamless implementation of the
new tax system. Moreover, the frequent fluctuations in GST rates and the complexity of compliance
procedures further exacerbated the confusion and strain on businesses. To summarise, although the
reasoning behind adopting the GST system was logical, the current deadlock arises from the
difficulties faced in its execution. Policymakers must swiftly address these challenges, taking into
account feedback from businesses and working towards streamlining the tax framework. Effective
collaboration among the central and state governments, as well as stakeholders, is crucial in resolving
the deadlock and fully harnessing the transformative power of GST to drive economic growth and
development. As the system becomes more developed and stakeholders adjust, it is anticipated that
the advantages of GST would progressively surpass the difficulties, resulting in a more effective and
unified indirect tax system. In summary, GST is proven to be a superior tax system due to its buoyancy,
elasticity, and cost-effectiveness. The buoyancy of GST is evident in the increasing proportion of tax
income to gross domestic product. The elasticity of tax income is determined by its responsiveness
to changes in coverage and taxing rates. It is considered cost-effective because to the decreased
assortment costs and little economic distortions. In order to achieve consensus on the planning of
Goods and Services Tax (GST), the central government must expedite the process and ensure proper
compensation for the revenue loss that states will experience as a result of GST implementation.
Although the implementation of GST has been discussed by various expert committees, such as the
authorised committee of State Finance Ministers, Task Force on GST, Finance Commission of India,
and Rajya Sabha committee, most states have only loosely agreed. The implementation of an optimal
Goods and Services Tax (GST) is unquestionably one of the most vital reform initiatives that has the
potential to greatly enhance the nation's economy and attain comprehensive growth. However, it is

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crucial for the Central Government and all political parties to go above their political duties and take
proactive actions to reach a good resolution, promptly resolving the deadlock in the Rajya Sabha and
promoting progress.

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 REFERENCES
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Dividend, Business Standard, December 19, Mumbai.
2) Dasgupta, Asim.2009. Empowered Committee on State Finance Ministers. First Discussion
Paper on Goods and Services Tax in India, New Delhi.
3) Finance Commission India. 2009. Report of the 13th Finance Commission, Chapter 5, Goods and
Services Tax, New Delhi.
4) Finance Commission India.2015. Report of the 14th Finance Commission of India, Chapter 13,
Goods and Services Tax, New Delhi.
5) Ghosh, Debasish. 2015 ‘Opinion: First Real time Action Taken for Implementation of GST’. May
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on 24/8/15)
7) Lok Sabha Secretariat.2014.Information Bulletin, Tax Reforms: Introduction of Goods and
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8) Modi, Arbind.2009. Report of the Task Force on Goods and Services Tax, Thirteenth Finance
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9) NCAER.2009. Moving to Goods and Services Tax in India: Impact of India’s Growth and
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themuddled-up-tax-system (accessed on 20/9/2015)

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