Whether this system has been the game changer that it
has always been touted to be is yet to be seen. Hence,
for the moment, we will focus only on its widely debat-
ed pros and cons.
II.BRIEF HISTORY OF GST IN INDIA:
The idea of moving towards GST was first mooted by
the then Union Finance Minister in his Budget speech
for 2006-07. Initially, it was proposed that GST would
be introduced from 1st April 2010.The Empowered
Committee of State Finance Ministers (EC) which had
formulated the design of State VAT was requested to
come up with a roadmap and structure for GST. Joint
Working Groups of officials having representatives of
the States as well as the Centre were set up to examine
various aspects of GST and draw up reports specifical-
ly on exemptions and thresholds, taxation of services
and taxation of inter-State supplies. Based on discus-
sions within and between it and the Central Govern-
ment, the EC released its First Discussion Paper (FDP)
on the GST in November, 2009. This spelt out features
of the proposed GST and has formed the basis for dis-
cussion between the Centre and the States so far.
The introduction of the Goods and Services Tax (GST)
is a very significant step in the field of indirect tax re-
forms in India. By amalgamating a large number of Cen-
tral and State taxes into a single tax, GST will mitigate
ill effects of cascading or double taxation in a major
way and pave the way for a common national market.
From the consumers point of view, the biggest advan-
tage would be in terms of reduction in the overall tax
burden on goods, which is currently estimated to be
around 25%-30%. It would also imply that the actual bur-
den of indirect taxes on goods and services would be
much more transparent to the consumer. Introduction
of GST would also make Indian products competitive in
the domestic and international markets owing to the
full neutralization of input taxes across the value chain
of production and distribution. Studies show that this
would have a boosting impact on economic growth.
Last but not the least, this tax, because of its trans-
parent and self-policing character, would be easier to
administer. It would also encourage a shift from the
informal to formal economy.
Cite this article as: Mrs. Archana Shah, “Pros and Cons of
GST in India-An Overview”, yuva Engineers, Volume 7 Issue
9, 2018, Page 4-9.
Volume No: 7 (2018), Issue No: 9 (August) ISSN No: 2320-3706
Volume No: 7 (2018), Issue No: 9 (August) ISSN No: 2320-3706
Abstract:
GST is stated to be one of the biggest tax reforms in In-
dia; it is the only indirect tax that directly affects all sec-
tors and sections of our economy. The GST bill, known
as the Goods and Services Tax, The tax came into effect
from July 1, 2017 through the implementation of One
Hundred and First Amendment of the Constitution of
India by the Modi government. It is being described
as the game changer of the Indian economy due to
its sweeping impact on the businesses in India. GST in
India is the replacement of all previous taxes on the
goods and services. It is an indirect tax that will take
over all previous taxes. There are many challenges be-
fore the government for its implementation, success
and proper benefit gain. This paper reviews the pros
and cons associated with GST after its implementation.
It is found that there is a serious challenge faced by the
industry and businesses is the shift from the previous
tax regime into the Input tax credit of the GST. Many
people in the economy are struggling to get adapted
to the destination based tax of GST.
Keywords:
GST, reforms, tax, business, India, economic growth.
I.INTRODUCTION:
India is the second largest consumer market in the
world. There are over a billion consumers, and com-
panies from all over the world are making inroads into
this developing nation to get a piece of the action. The
Indian growth story has been remarkable and resilient.
It has been resilient because the growth has happened
despite the unfavorable business atmosphere in the
nation. Companies have always found it difficult to
cope with the incredibly complex and harrowing tax-
ation system that India had put into place. However,
on the midnight of 30th June 2017, India woke up to a
new tax regime. From 1st July 2017, the various taxes
that were levied by different state and local authorities
were scrapped. A new system was created, the result
of which was a unified tax system that would work all
across the nation. The principle followed during the im-
plementation was “One nation, One market, One tax
“This was no less than a historic moment. This is be-
cause various Indian governments have been involved
in a massive parliamentary debate for over 15 years on
this issue of GST. Finally, the system has seen the light
of day.
Mrs. Archana Shah
Vice-Principal,
Radhe Krishna Women’s College,
Char Kaman, Ghansi Bazaar, Hyderabad, Telangana- 500066, India.
YUVA ENGINEERS
| AUGUST 2018 Page 4
Pros and Cons of GST in India-An Overview
