NehaMishra
                                     CONTENTS
Impact of GST on Indian economy
Introduction...................
Meaning of GST.................
Types of GST...........................
Positive Impacts of GST..............
Negative Impacts of GST.................
Conclusion...............
         INTRODUCTION
  1st July 2017, was a h
istorical day in India's 
tax history when GST c
ame into force. Subsu
ming over a dozen of l
evies Goods and servic
e tax or GST is one of t
he biggest tax reform i
mplemented in India
The aim of introducing GST 
was to replace all the 
existing indirect taxes such 
as VAT, Central duty, Excise 
duty, Entertainment tax etc. 
Through GST almost all of 
the indirect taxes were 
consolidated into single 
comprehensive tax called 
GST . This major step has 
helped the citizen of India 
to file their taxes easily 
without the hassles they 
faced earlier.

Meaning of GST.....
The Goods and Service tax is an i
ndirect tax levied on the manufa
cturing and sales of good and ser
vices across the country. The tax 
is charged at every stage if suppl
y of goods or services. It is a des
tination based tax that means th
at it is to be collected at the pou
nt where the goods or services a
re finally consumed. 
For example : If a product is 
manufactured in Bhopal and is 
sold in Mumbai then the tax 
will be levied in Mumbai. 
Moreover, GST is added to the 
cost of product or services at 
every stage of manufacturing 
process and the amount of 
GST paid at previous stages 
are available as set off for the 
next stage.  

Definition of 
GST
"GST is a comprehensive,d
estination based tax on th
e consumption of goods an
d services with value addit
ion at each level right from 
the manufacturer to the fin
al consumer with credit of 
taxes paid at previous stag
es available as set off."  

Types of GST 



Positive Impact of GST on 
Indian economy .....
1. Simplified tax structure :
Gst has simplified the taxation system
of the country. By subsuming most of the central and 
state taxes into single tax, calculating taxes at multiple 
stages has become easier. Through this both customer 
and manufacturer gets a clear idea of the amount of tax 
they are charged and its basis.
2.  Increase in export :
Gst has reduced the customs duty on exporting goods. 
The cost of production in the local market has also 
decreased due to Gst. All these factors have 
increase the rate of export in the country.
3. Elimination of cascading effect :
The introduction of gst has helped merge the 
taxes of state and central government. This has 
helped remove the cascading effect of multiple 
taxes.
4.  Relief to small and medium enterprises :
Small and medium traders can now register 
under the Composition Scheme introduce by 
Gst. Through this scheme , business having an 
annual turnover of Rs. 1.5 crores only have to 
pay 1% GST. 
5.  Increase in govt. Revenue :
 Due to wide range of GST, the number of taxpayers 
have increased and hence the revenue of 
government has also increased.  
Impact of GS
T on various 
sectors GST




Negative Impact of GST ......
1. Long term process : The implementation of GST is 
closely linked to the administration of other taxes and 
impacts of tax on GDP l. Most countries have taken 
several years to implement GST.
2. Difficult to adapt :  When it comes to gst everything 
from registration to return filling and payment is now 
online. This is against the previous system where 
taxpayer were used to paperwork. Thus online system 
could be difficult to adapt by small taxpayers.
3. Multiple rates of tax : Instead of more simplified tax 
structure, the GST council rolled out gst with five 
standard rates, which has made the structure more 
complex.  
   
4. Higher prices : GST is a multipoint tax. It is 
payable on every stage of supply thus the price of 
commodity increase and total burden is to be borne 
by consumer. They have to pay more price due to 
GST.
5. Accounting challenges : The dealer will now 
have to maintain up-to-date records of purchase and 
sales in order to claim set off and various provisions 
under GST law pose serious accounting challenges.    
   CONCLUSION
On 30th June 2019, GST completed t
wo years. During this period many t
eething problems were faced by tax
payers, consumers, and administrati
on also. GST was amied at easing bu
siness but complex tax structure spoi
led the trade hitting mostly the unor
ganized sectors.  
To resolve the difficulties during the 
implementation many procedure and 
reforms were implemented but it did 
not help the situation. Government 
should have developed the 
infrastructure before the 
implementation of act. 
But it is thought that in the long run 
GST will be beneficial and win - win 
situation for both the government 
and taxpayers as well as the 
economy.
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