Abstract
Goods and Services Tax is considered to be one of the revolutionary tax reforms in India since independence. The foundation of this new taxation system is to remove the cascading effect and increase the tax revenue with more transparent mechanism. The present paper is an attempt to assess the impact of this new taxation system on indirect tax revenue of India in general and of Odisha in specific. The study is analytical in nature and is based on published data. Collection of revenue under goods and services taxes has been considered from July 2017 to March 2021. The results show an increasing trend of indirect tax in India due to implementation of new tax except a few months because of some administration complexity and prevailing Corona pandemic. Future tax revenues have been forecasted using Exponential Triple Smoothing function and are compared with actual collection up to March 2021. So far Odisha state is concerned, expected tax revenue is not yet realised and the situation may be unfavourable when Central Government will stop giving Compensation cess after July 2022.
Highlights
Taxation system is an incredible tool in the hands of any Government to establish vertical equity through income redistribution or reduce the gap between the rich and the poor
In Canada, Bird [3] argues that the transition has not been easy and even after 28 years of experience it is still a work in progress. This new taxation system is characterized by seamless claim of input tax credit throughout the value chain, destination-based taxation as against origin-based taxation, avoiding double taxation resulted from cascading effects, more transparency system, increased ease of doing business, simpler and use friendly compliance, digital platform, increase the revenue base, etc
The primary focus of the study is to access the impact of goods and services tax on tax revenue of India in general and of Odisha state in particular
Summary
Taxation system is an incredible tool in the hands of any Government to establish vertical equity through income redistribution or reduce the gap between the rich and the poor It refers to a mandatory levy by the Government on its citizen either on their income i.e., income tax or on consumptions or productions i.e., value added tax, services tax and custom duty to meet the financial requirement for social and economic development activities of the country. In Canada, Bird [3] argues that the transition has not been easy and even after 28 years of experience it is still a work in progress This new taxation system is characterized by seamless claim of input tax credit throughout the value chain, destination-based taxation as against origin-based taxation, avoiding double taxation resulted from cascading effects, more transparency system, increased ease of doing business, simpler and use friendly compliance, digital platform, increase the revenue base, etc. The time is fitting to take stock of the progress in implementing the tax, analyse its revenue implications and economic impact and identify further challenges and reform areas to reach the goal of raising revenue productivity and minimising cost
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