GROWTH OF REVENUE OF GOODS AND SERVICES TAX IN INDIA

Abstract

Government of India has implemented Goods & Services Tax (GST) in India on 1 July, 2017. The obective of this research paper is to explain the mechanism of GST and its effects on Indian economy. The Kelkar Committee was convinced that a dual GST system shall be able to tax almost all the goods and services and the Indian economy shall be able to have wider market of tax base, improve revenue collection through levying and collection of indirect tax and more pragmatic approach of efficient resource allocation. Under the Goods and Service Tax mechanism, every person is be liable to pay tax on output and shall be entitled to enjoy credit on input tax paid and tax shall be only on the amount of value added. The historic GST or goods and services tax has become a reality. GST is going to consolidate these multiple taxes into one as ‘One Nation, One Market, and One Tax’. Integration of goods and services tax would definitely lead to ease of doing business and simplifies tax compliance. GST bill will be a form for economic integration of India. Government of India, this surplus revenue may contribute to the growth of economy by way of investment in various infrastructural & development projects by Government of India. GST may have positive impact on economy, four tier structure of tax rate under GST may result into massive price hike of luxurious Goods & Services as well Government has taken efforts to put Goods & Services of necessity under lowest slab of tax rate. This is the major indirect tax reform in the history of India, outcome of which various Central & State taxes subsumed under GST viz. Central Excise Duty, Service Tax, Additional Duty of Excise, Surcharges, Cess, Countervailing Duty, Special Additional Duty, Sales Tax, VAT, Purchase Tax, Luxury Tax, Entry Tax etc. KEYWORDS:-Economy, GST, Negative Impact, Positive Impact, Transparency.