IMPACT OF GST ON INDIAN ECONOMY

Abstract

Goods and Services Tax (GST) was launched on 1st of July 2017. It is an indirect
tax applicable throughout India. Now single tax would be levied on all goods and
services.Around 160 countries have implemented GST. GST will ensure a comprehensive
tax base with minimum exemptions, which will help the industry.GST will help the
economy to grow in more efficient manner by ameliorating the tax accumulation as it will
disrupt all the tax barriers between states and integrate country via single tax rate. It will
benefit the Indian economy in many ways- help in reducing the price for consumers, rate of
tax will be uniform, reduce multiple taxes .GST will affect many sectors in positive or
negative manner. GST, as per government estimates, will boost India's GDP by around 2
per cent.Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% and
18%. (https://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India), 2017). After GST
implementation certain products prices will reduce like branded goods, hotels, personal
hair products, soap etc. Few products price will increase like mobile bills, aerated drinks,
internet, air tickets. Goods and Services Taxes would be collected in three ways:CGST: where the revenue will be collected by the central government, SGST: where
the revenue will be collected by the state governments for intra-state sales, IGST: where
the revenue will be collected by the central government for inter-state sales. This paper
focuses on the benefits, challenges and impact of GST on Indian economy.