International Journal of Advanced Research in Commerce, Management &Social Science (IJARCMSS) 69

ISSN :2581-7930, Impact Factor : 6.986, Volume 07, No. 02(II), April-June, 2024, pp 69-76

PROBLEMS FACED BY RETAIL MERCHANTS IN

GST IMPLEMENTATION AND RETURN FILING

Mrs. Suma P.C

Mrs. Hemalatha.C**

ABSTRACT

The GST in India is considered one of the biggest reforms in indirect taxation. The essence of
the GST system lies in providing a set-off for the input tax paid earlier by a registered supplier. The
complete elimination of tax cascading and tax pyramiding is an attractive aspect of the GST system.
Under the GST system, one can easily find out the entire tax element in the price because it equals the
final tax paid by the ultimate customer. The study aims to identify the problems faced by retail merchants
in GST implementation and return filing. 30 respondents were chosen from Iritty area through
convenience sampling technique. The major findings where all retail merchant, have registered their
businesses under Goods and Service Tax (GST). Majority did not encounter difficulties during the GST
implementation and return filing. The major challenges faced during the GST implementation were
software purchase, document requirements, and a lack of awareness about the law. Thus, it is concluded
that adequate measures must be taken by the Govt to bring flexibility in the provision of GST and clearly
issue notifications regarding GST.

KEYWORDS: GST, Indirect Taxation, Input Tax, Registered Supplier, Retail Merchants.
_______________

Introduction
GST, introduced in India in 2017, is a major reform in indirect taxation, replacing multiple taxes
like VAT, excise duty, and more. It's a single tax on the supply of goods and services, simplifying the tax
structure. Before GST, India had a complex system with various taxes at different stages. GST unified
these taxes, except for Basic Customs Duty on imports. The key feature of GST is input tax credit, where
taxes paid on inputs are credited to suppliers and deducted from their output tax liability. This ensures no
double taxation. One significant advantage of GST is the elimination of tax cascading and pyramiding.
The total tax in the price equals what the customer pays. To understand the impact of GST on
merchants, a study was conducted in Iritty area with a sample size of 30.
Meaning of GST
Goods and Services Tax, is a comprehensive indirect tax levied on the supply of goods and
services in many countries, including India. It is designed to replace multiple taxes and create a unified
taxation system. GST is a value-added tax that is applied at every stage of the supply chain, from the
manufacturer to the consumer.


Assistant Professor in Commerce, Mahatma Gandhi College, Iritty, Kannur, (Kannur University), Kerala,
India.
**
Assistant Professor in Commerce, Government Victoria College, Palakkad, Kerala, India.
70 International Journal of Advanced Research in Commerce, Management & Social Science (IJARCMSS) - April-June, 2024

Statement of the Problems

The introduction of Goods and Service Tax (GST) would be a very significant step in the field of
indirect tax reforms in India. This study aims to find out the impact of GST among merchants in Iritty area.
It helps to understand the types of difficulties they have faced and association among the difficulties and
type of business.
Significance of Study
The implementation of GST has simplified indirect taxes for traders, reducing their overall tax
burden on goods. It prevents tax cascading by offering Input Tax Credit (ITC) across the supply chain,
while also creating a common market in India with a uniform taxation system to combat tax evasion. This
study, titled problems faced among Retail merchants in GST implementation and return filing with special
reference to Iritty area," examines the problems experienced by various business men at the time of
implementation and filing GST return.
Scope of the Study
The study entitled Problems Faced by Retail Merchant in GST Implementation and Return Filing
in Iritty area was carried out to define major difficulties in implementation and filing of return in GST
among merchants and to understand the type of business experiences most difficulty. The data was
collected from 30 respondents belonging to Iritty area based on convenience sampling.
Objectives of the Study
• To identify the problems faced by merchants due to GST implementation.
• To identify various problems faced by merchants in GST Return Filing
Research Methodology
A descriptive research methodology design is used in this study. Both primary and secondary
data are used. Primary data has been collected from various merchants by using a well-structured
questionnaire. Convenience sampling technique is used and 30 merchants are considered as the sample
size. Primary data is analysed using percentage and chi-square analysis. Secondary data is analysed
from books, journals, websites, and records.
Limitation of the Study
• Lack of cooperation from the side of respondents.
• The study covers only a small area and among limited merchants.
Review of Literature
Yadav & Shankar, (2018) in their research paper analysed the history and evolution of GST in
the country and how it has replaced various indirect taxes. Rupa, R. (2017) in her research paper
explained the concept of GST. Also, she highlighted the advantages and disadvantages of GST in our
economy. Lourdunathan and Xavier (2017) analysed that GST efficient implementation will lead to
resources and education, training, and conducting workshops on GST on the part of the government.
Mujalde and Vani (2017) in their research paper on ‘Goods and Service Tax (GST) and its outcomes in
India’ focused on the features of GST, and the impact of GST on the Indian economy and discussed
possible advantages and challenges of GST Khurana and Sharma (2016) in their paper ‘Goods and
Service Tax in India – A Positive Reform for Indirect Tax’ highlighted the objectives of GST and reforms
in the indirect taxation system in India and concluded after the implementation of GST manufacturers,
wholesalers, and retailer can be easily recovered input taxes in form of a tax credit. Khurana and Sharma
(2016) conducted a study with a view to explore various benefits and opportunities of GST throwing light
on its background, the objectives of the proposed GST plan, and its impact on the Indian tax scenario.
They concluded that GST implementation will definitely benefit procedures and consumers although its
implementation requires concentrated efforts of all stakeholders especially Central and state
Governments.
Mrs. Suma P.C & Mrs. Hemalatha.C: Problems Faced by Retail Merchants in GST..... 71

Fig. 1
The above graph shows that implementation of GST in India, challenges faced and comparative
study with respect to other nations and connected papers.
Results and Discussions
Table 1: Retail Merchants Classification
Merchants Frequency Percent Valid Percent Cumulative Percent
Jewellery 8 26.7 26.7 26.7
Textiles 10 33.3 33.3 60.0
Book Stall 3 10.0 10.0 70.0
Hardware 3 10.0 10.0 80.0
Medical shop 2 6.7 6.7 86.7
Restaurant 2 6.7 6.7 93.3
Stationary 2 6.7 6.7 100.0
Total 30 100.0 100.0
The table 1 shows that among 30 respondents, majority of members are textile shop owners (33
percent) and jewellery owners (26 percent). 10 percentage of respondents are book stall owners and
another 10 percentage are hardware owners. 7 percentage of respondents are medical shop owners,
stationery owners, and restaurant owners separately.
Table 2: Classification of Merchants on the basis of Year of Experience
Experience Frequency Percent Valid Percent Cumulative Percent
1-5 years 3 10.0 10.0 10.0
5-10 years 13 43.3 43.3 53.3
10-15 years 7 23.3 23.3 76.7
15-20 years 4 13.3 13.3 90.0
more than 20 years 3 10.0 10.0 100.0
Total 30 100.0 100.0
72 International Journal of Advanced Research in Commerce, Management & Social Science (IJARCMSS) - April-June, 2024

To find out whether there is any association between year of experience and problems in
submission of Return, chi square test is conducted and hypothesis is framed as follows:
Hypothesis 1
H0: There is no association between year of experience and Difficulties in submission of Return
Table 3: Chi Square Result
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 10.252a 12 .594
Likelihood Ratio 13.387 12 .342
Linear-by-Linear Association 3.438 1 .064
N of Valid Cases 30

Fig. 2
The above table of SPSS output chi square shows that pv.594 value which is greater than 0.05
hence the null hypothesis is accepted, that is there is no association between year of experience and
difficulties in submission of GST return. It indicates that all merchants have faced network problems,
server problems date issue and error in uploading are the major problems in connection with filing of
return.
To find out whether there is any association between year of experience and problems faced by
merchant at the time of implementation of GST, chi square test is conducted and hypothesis is framed as
follows:
HYPOTHESIS 2
H0: There is no association between year of experience and Difficulties faced by merchant at the time of
implementation of GST
Table 4: Chi Square Result
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 16.965a 12 .151
Likelihood Ratio 19.212 12 .084
Linear-by-Linear Association 3.716 1 .054
N of Valid Cases 30
.
Mrs. Suma P.C & Mrs. Hemalatha.C: Problems Faced by Retail Merchants in GST..... 73
Fig. 3

The Pearson Chi-Square statistic is 16.965 with 12 degrees of freedom. The associated p-value
is 0.151. The p-value of 0.151 suggests that there is no strong evidence to reject the null hypothesis that
there is no association between the variables at a conventional significance level of 0.05. In other words,
the variables are not significantly associated. The Likelihood Ratio statistic is 19.212 with 12 degrees of
freedom, and its p-value is 0.084. The Likelihood Ratio test is another way to assess the association
between categorical variables. The p-value of 0.084 also suggests that there is no strong evidence to
reject the null hypothesis, but it is slightly lower than the p-value from the Pearson Chi-Square test.
To find out whether there is any association between type of Business and difficulties faced by
the merchant at the time of implementation of GST chi square test is conducted and hypothesis is framed
as follows:
Hypothesis 3
H0: There is no association between type of Business and difficulties faced by the merchant at the
time of implementation of GST
Table 5: Chi Square Result
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 58.447a 18 .000
Likelihood Ratio 51.815 18 .000
Linear-by-Linear Association 25.813 1 .000
N of Valid Cases 30
74 International Journal of Advanced Research in Commerce, Management & Social Science (IJARCMSS) - April-June, 2024

Fig. 4

To find out whether there is any association between Type of business and difficulties faced by
merchant at the time of Filing GST return, chi square test is conducted and hypothesis is framed as
follows:
H0: There is no association between Type of business and difficulties faced by merchant at the time
of Filing GST return
Table 6: Chi Square Results
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 53.357a 18 .000
Likelihood Ratio 51.902 18 .000
Linear-by-Linear Association 24.139 1 .000
N of Valid Cases 30
Mrs. Suma P.C & Mrs. Hemalatha.C: Problems Faced by Retail Merchants in GST..... 75
Fig. 5

The chi square analysis show p value is less than .05 hence the null hypothesis is rejected, that
is there is an association between type of business and difficulties in filing GST return. The above chart
shows that jewellery merchants have more difficulties in the form of network problem and secondly textile
merchants. Book stall owners faced more difficulties in server problems, medical shop owners faced
difficulties in date issue and error in uploading data.
Findings, Recommendations and Conclusions
After a comprehensive analysis of primary data collected from 30 respondents regarding the
Goods and Service Tax system, the following key findings have been identified:
All retailers, constituting 100%, have registered their businesses under Goods and Service Tax
(GST). A significant majority of retailers, 77%, did not encounter difficulties during the GST Retailers
faced major challenges during the GST implementation, including software purchase (63%), document
requirements (17%), and a lack of awareness about the law (13%). Several retailers experienced network
problems (47%) and server errors (27%) when submitting returns & registration process. There is an
association between type of business and difficulties in filing GST return. There is no association
between year of experience and Difficulties faced by merchant at the time of implementation of GST
There is no association between year of experience and difficulties in submission of GST return. Based
on the findings few recommendations are forwarded to the authorities are: The government must address
problems in the GST network.
Awareness and interactions may be provided to both common people and retailers. The
government needs to issue clear notifications regarding GST. The government should take adequate
measures to introduce flexibility in the provision of GST. To conclude that the implementation of GST is a
significant step in India's comprehensive indirect tax reforms, regarded as one of the best decisions by the
Indian government. It's evident that all merchants have registered under GST. However, challenges during
GST implementation were primarily related to software purchases and a lack of clarity regarding the law.
76 International Journal of Advanced Research in Commerce, Management & Social Science (IJARCMSS) - April-June, 2024

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1. https://unacademy.com
2. https://wepdigital.com
3. https://www.cbic.gov.in
4. https://www.taxmann.com
5. https://www.canarahsbclife.com
6. https://gstcouncil.gov.in
7. https://groww.in.

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