Site Loader

ABSTRACTWith the 101st Constitution (Amendment) Act, 2017 passed, the GST was adopted on 1st July, 2017. The GST has replaced the existing indirect taxes and is levied on each point of sale. The objective of the study is to analyse the short term and long term effects on different macroeconomic variables. The new tax regime has resulted in different positive or negative effects on trade and commerce. The implementation of GST has led to a temporary bewilderment in the markets and it is very important to understand the effects of GST on Gross Value Added, employment rate, General Price Level, etc. The study uses secondary data from various reports of Government of India and other news sources.Keywords: indirect taxes, GST, GNP, Kelkar Committee, GST council, destination based tax.INTRODUCTIONThe tax is a major source of public revenue. The main features of taxation are that, they are the compulsory payments made by an individual or entity to the administrators for carrying out their socio-economic functions. The indirect taxes among the different kinds of taxes, cover a wider range of tax base. The changes in aggregate demand depends on the rate of taxation and the structure of tax system and so the economic growth. More complex and and unclear the tax system is, greater are the chances of tax evasion and inadequate revenue generation. This complexity also affects the ease of doing business. A economic, transparent and simple system is thus promised by the Government of India through the implementation of GST. The Goods and Service Tax (GST) is a destination based tax incorporates all the other existing indirect taxes. The burden lies with the final consumer. Introduction of GST has brought in a comprehensive single tax structure for the economy. GST has helped to reduce the complexity of multiple tax regime that existed in India. The implementation of GST by the Government of India has led to a situation of confusion for a common man as the new amendment is not yet familiar to the public.The GST rates are based on the classification of goods and services. 0%, 5%, 12%, 18% and 28% are the major slabs of GST. The new system has discarded all the offline payment systems compulsorily, hence the small scale sector and the illiterate and older population sections are finding it difficult to adopt it. HISTORY OF GSTThe concept of GST was first introduced by a German economist in 18th century. The first country to adopt the GST regime is France. It is one of the most important and biggest fiscal reform in India since 1947. The GST is not a new concept in India, in fact it has its roots back in 1999-2000 when the first committee for drafting of GST law was set up by the then PM Mr. Atal Bihari Vajpayee. The Taskforce on the implementation of FRBM Act, 2003 headed by Vijay Kelkar envisaged the idea of implementing GST to achieve a wider tax base and improve the revenue collection in 2004. The Constitution Amendment Bill for implementation of GST was then introduced in 2010 as the proposed tax required alteration in the powers of Central as well as State governments. Since then after introducing various changes the 101st Constitution (Amendment) Act, 2017 was passed and GST was adopted on 1st July, 2017.

Post Author: admin


I'm Sonya!

Would you like to get a custom essay? How about receiving a customized one?

Check it out