GOODS AND SERVICES

TAX (GST) AND ITS

IMPACTS
Fundamentals of Finance and Accounting

DHANANJAI SHARMA , DIVYAM MALAY SHAH , TANYA SHAHI , ADITI

MAHESHWARI SHWETA CHATURVEDI
Acknowledgement
The satisfaction and euphoria that accompany the successful completion of
any task wouldnt complete without the mention of the people who made it
possible because success is epitome of hard work, missionary zeal, steady
fast determination at ease concentration and dedication and above all apt
advices. I am highly indebted to Mrs. Pinky Pawaskar for her guidance and
constant supervision as well as for providing necessary information regarding
the project & also for her support in completing the project.

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ABSTRACT
In this report, we will be discussing about GST and its impacts. Starting with
introducing GST and discussing its features, we will proceed towards its
impacts on the various sectors of the society. GST will be a game changing
reform for the Indian economy by creating a common Indian market and
reducing the cascading effect of tax on the cost of goods and services. It will
impact the tax structure, tax incidence, tax computation, tax payment,
compliance, credit utilization and reporting, leading to a complete overhaul
of the current indirect tax system. GST will have a far-reaching impact on
almost all the aspects of the business operations in the country, for instance,
pricing of products and services, supply chain optimization, IT, accounting,
and tax compliance systems. Despite having these vast impacts, we will be
discussing the most important of the impacts of GST. We will be discussing
the impact of GST on taxes, how it affects the business sector, stock market
and the one thing that we can all relate to, how it affects the daily public.
Then we also state the possible negative impacts it can have. In the end we
will be concluding with the fact that GST is a long term strategy and we cant
really state the true results since it hasnt been implemented yet. Although a
rough estimation has been made regarding the change in the economy that
will be caused, however the actual results can be discussed only after GST
gets implemented.

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Table of Contents

Sr TITLE Page no.

no
.
1 Introduction 4

2 Imperative Functions of GST 5

3 5
Difference between current taxation system
and GST
4 8
Taxes Clubbed under GST
5 9
Salient features of GST
6 Who all are exempted from GST? 10
7 Why are startups and SMEs so excited about 10
GST?

8 Impacts of GST on stock market 13

9 Impact of GST on Common Man 16
10 Overall Advantage of GST 18
11 Major Challenges of GST 19
12 Conclusion 20

Introduction
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The reference of GST was first made in the Indian Budget in 2006-07 by the
then Finance Minister Mr. P. Chidambaram as a single centralized Indirect tax.
The GST Constitution (One Hundred and Twenty Second Amendment) Bill,
2014 was introduced on December 19, 2014 and passed on May 6, 2015 in
the Lok Sabha and yet to be passed in the Rajya Sabha.

The Bill seeks to amend the Constitution to introduce Goods and Services tax
vide proposed new article 246A. This article gives power to legislature of
every state and Parliament to make laws with respect to goods and services
tax where the supplies of goods or of services take place. Recently, Union
Minister Mr. Arun Jaitley said that GST could be implemented as early as
January 1, 2016.

The introduction of such a tax in Indian Economy is a concrete step of

Government of India as one of the biggest taxation reforms and is all set to
integrate State economies and boost overall growth. It will also help in
increasing the GDP of the country by 1-1.5%. Such a tax system has already
been implemented worldwide around 150 countries (France being First in
1954) and India is catching up with the global trends.

Note: The word bill may be interpreted as the Constitution

(122nd Amendment) Bill, 2014

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Imperative functions of GST

Single Umbrella Tax Rate:

GST shall replace a number of indirect taxes being levied by Union and State
Governments.

Removing Cascading Effect:

GST is intended to remove Tax on Tax Effect and provide for common
national market for Goods and Services.

Difference between current taxation system and

GST
GST Regime
Stage 1

Imagine a manufacturer of, say, shirts. He buys raw material or inputs

cloth, thread, buttons, tailoring equipment worth Rs 100, a sum that
includes a tax of Rs 10. With these raw materials, he manufactures a shirt.
In the process of creating the shirt, the manufacturer adds value to the
materials he started out with. Let us take this value added by him to be Rs
30. The gross value of his good would, then, be Rs 100 + 30, or Rs 130.
At a tax rate of 10%, the tax on output (this shirt) will then be Rs 13. But
under GST, he can set off this tax (Rs 13) against the tax he has already paid

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on raw material/inputs (Rs 10). Therefore, the effective GST incidence on the
manufacturer is only Rs 3 (13 10).

Stage 2
The next stage is that of the good passing from the manufacturer to the
wholesaler. The wholesaler purchases it for Rs 130, and adds on value (which
is basically his margin) of, say, Rs 20. The gross value of the good he sells
would then be Rs 130 + 20 or a total of Rs 150.
A 10% tax on this amount will be Rs 15. But again, under GST, he can set off
the tax on his output (Rs 15) against the tax on his purchased good from the
manufacturer (Rs 13). Thus, the effective GST incidence on the wholesaler is
only Rs 2 (15 13).

Stage 3
In the final stage, a retailer buys the shirt from the wholesaler. To his
purchase price of Rs 150, he adds value, or margin, of, say, Rs 10. The gross
value of what he sells, therefore, goes up to Rs 150 + 10, or Rs 160. The tax
on this, at 10%, will be Rs 16. But by setting off this tax (Rs 16) against the
tax on his purchase from the wholesaler (Rs 15), the retailer brings down the
effective GST incidence on himself to Re 1 (16 15).
Thus, the total GST on the entire value chain from the raw material/input
suppliers (who can claim no tax credit since they havent purchased anything
themselves) through the manufacturer, wholesaler and retailer is, Rs 10 + 3
+2 + 1, or Rs 16.

How it would be in a non-GST regime?

In a full non-GST system, there is a cascading burden of tax on tax, as

there are no set-offs for taxes paid on inputs or on previous purchases.

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Thus, if we consider the same example as above, the manufacturer buys raw
materials/inputs at Rs 100 after paying tax of Rs 10. The gross value of the
shirt (good) he manufacturers would be Rs 130, on which he pays a tax of Rs
13. But since there is no set-off against the Rs 10 he has already paid as tax
on raw materials/inputs, the good is sold to the wholesaler at Rs 143 (130 +
13).

With the wholesaler adding value of Rs 20, the gross value of the good sold
by him is, then, Rs 163. On this, the tax of Rs 16.30 (at 10%) takes the sale
value of the good to Rs 179.30. The wholesaler, again, cannot set off the tax
on the sale of his good against the tax paid on his purchase from the
manufacturer.

The retailer, thus, buys the good at Rs 179.30, and sells it at a gross value of
Rs 208.23, which includes his value addition of Rs 10 and a tax of Rs 18.93
(at 10% of Rs 179.30). Again, there is no mechanism for setting off the tax
on the retailers sale against the tax paid on his previous purchase.

The total tax on the chain from the raw material/input suppliers to the final
retailer in this full no-GST regime will, thus, work out to Rs 10 + 13 + 16.30
+ 18.93 = Rs 58.23. For the final consumer, the price of the good would then
be Rs 150 + 58.23 = Rs 208.23.

Compare this Rs 208.23 with a tax of Rs 58.23 to the final price of Rs

166, which includes a total tax of Rs 16, under GST.

Whats it like in todays mixed scenario?

Currently, we have Value-Added Tax (VAT) systems both at the central and
state levels. But the central VAT or CENVAT mechanism extends tax set-offs
only against central excise duty and service tax paid up to the level of

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production. CENVAT does not extend to value addition by the distributive
trade below the stage of manufacturing; even manufacturers cannot claim
set-off against other central taxes such as additional excise duty and
surcharge.

Likewise, state VATs cover only sales. Sellers can claim credit only against
VAT paid on previous purchases. The VAT also does not subsume a host of
other taxes imposed within the states such as luxury and entertainment tax,
octroi etc.

Once GST comes into effect, all central- and state-level taxes and levies on
all goods and services will be subsumed within an integrated tax having two
components: a central GST and a state GST.

This will ensure a complete, comprehensive and continuous mechanism of

tax credits. Under it, there will be tax only on value addition at each stage,
with the producer/seller at every stage able to set off his taxes against the
central/state GST paid on his purchases. The end-consumer will bear only the
GST charged by the last dealer in the supply chain, with set-off benefits at all
the previous stages.

Taxes Clubbed under GST

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SALIENT FEATURES OF GST

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 The GST shall have two mechanisms: one levied by the Centre
(hereinafter referred to as Central GST), and the other levied by the
States (hereinafter denoted to as State GST). Rates for Central GST and
State GST would be set appropriately, reflecting revenue
considerations and acceptability. This twofold GST model would be
implemented through manifold statutes (one for CGST and SGST
statute for every State).

Though, the basic structures of law such as chargeability, definition of

taxable event and taxable person, measure of levy including valuation
provisions, basis of classification would be uniform across these
statutes as far as practicable.

The Central GST and the State GST would be applicable to all
transactions of goods and services made for a consideration except the
exempted goods and services, goods which are outside the purview of
GST and the dealings which are below the prescribed threshold limits.

The Central GST and State GST are to be paid to the accounts of the
Centre and the States independently. It must be ensured that account-
heads for all services and goods would have indication whether it
relates to Central GST or State GST.

Since the Central GST and State GST are to be treated distinctly, taxes
paid against the Central GST shall be permitted to be taken as input
tax credit (ITC) for the Central GST and could be utilized only against
the payment of Central GST.

Cross utilization of ITC between the Central GST and the State GST
would not be permitted except in the case of inter-State supply of
goods and services under the IGST model.

Preferably, the problem related to credit accumulation on account of

refund of GST should be evaded by both the Centre and the States
except in the cases such as exports, purchase of capital goods, input
tax at higher rate than output tax where, again refund/adjustment
should be completed in a time bound manner.

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 In order to make it practical, uniform procedure for collection of both
Central GST and State GST is recommended in the respective
legislation for Central GST and State GST.

The supervision of the Central GST to the Centre and for State GST to
the States would be given. This would infer that the Centre and the
States would have parallel jurisdiction for the entire value chain and for
all taxpayers on the basis of thresholds for goods and services
prescribed for the States and the Centre.

The present threshold prescribed in different State VAT Acts below

which VAT is not applicable varies from State to State. A uniform State
GST threshold across States is required. It is considered that a
threshold of gross annual turnover of Rs.10 lakh both for goods and
services for all the States and Union Territories may be approved with
satisfactory compensation for the States (particularly, the States in
North-Eastern Region and Special Category States) where lower
threshold had prevailed in the VAT regime. To respect the interest of
small traders and small scale industries and to avoid dual control, the
States also considered that the threshold for Central GST for goods
may be kept at Rs.1.5 crore and the threshold for Central GST for
services may also be appropriately high. It may be stated that even
now there is a separate threshold of services (Rs. 10 lakh) and goods
(Rs. 1.5 crore) in the Service Tax and CENVAT.

The States has opinion that Composition/Compounding Scheme for the

purpose of GST should have an upper ceiling on gross annual turnover
and a floor tax rate with respect to gross annual turnover. Particularly,
there would be a compounding cut-off at Rs. 50 lakh of gross annual
turnover and a floor rate of 0.5% across the States. The scheme would
also permit option for GST registration for merchants with turnover
below the compounding cut-off.

The taxpayer would need to submit periodical returns, in common

format as far as possible, to both the Central GST authority and to the
concerned State GST authorities.

Each taxpayer would be allotted a PAN-linked taxpayer identification

number with a total of 13/15 digits. This would bring the GST PAN-

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 linked system in line with the predominant PAN-based system for
Income tax, facilitating data exchange and taxpayer compliance.

For the convenience of tax payer, functions such as assessment,

enforcement, scrutiny and audit would be undertaken by the authority
which is collecting the tax, with information sharing GST is a single
unified consumption tax and broad based tax on supply of goods and
services.

GST is a Destination Based Tax.

There is no scope for multiple taxation on Goods & Services such as

Sales Tax, Entry Tax, Octroi, Entertainment Tax, Luxury Tax, etc.

It will increase tax collections due to the wide coverage of Goods &
Services.

Goods and Service tax will reduce the tax burden on the assessees
since it will avoid the cascading effect.

In GST tax, there is no scope to levy for resale tax, special tax,
additional tax, turnover tax, etc.

Zero rating of exports and inter-State sales of goods and supply of

services.

GST will reduce effective rates of tax to one or two-floor rates.

The credit of CGST paid on inputs may be used only for paying CGST
on the output.

The credit of SGST paid on inputs may be used only for paying For
Departmental Officers only SGST.

WHO ALL ARE EXEMPTED FROM GST?

As per the proposal the following are exempt from GST
a) Supply of Alcoholic Liquor for human Consumption

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The GST Council shall however revisit whether the exemption is to be
extended to the following:

(i) petroleum crude

(ii) high speed diesel;
(iii) motor spirit (petrol);
(iv) natural gas;
(v) aviation turbine

Why are startups and SMEs so excited about

GST?
GST is deemed to benefit all businesses in India, but small businesses can
rejoice for the following reasons:
1. Ease of starting business: Any new business needs to have a VAT
registration from sales tax department. A business operating in many States
has to face a lot of issues regarding the different procedures and fees in each
state. GST will bring about a uniformity in process and centralised
registration that will make starting business and expanding in different
States much simpler.
2. Higher exemptions to new businesses: As per the current structure, any
business with a turnover of more than Rs five lakh has to get VAT registration
and pay VAT. GST will make this limit higher, to upto Rs 10 lakh and, further
to it, businesses with turnover between Rs 10 and 50 lakh will be taxed at a
lower rates. This will bring respite from tax burdens to newly established
businesses.
3. Simple taxation: Indias complicated tax structure is not unheard of.
Startups are often seen grappling with elaborate procedures and paper work.
With GST, all the taxes will be integrated, easing out the process of taxation.
With a better and simpler taxation system in place, India might just be able
to retain its startup hub tag as per NASSCOMs Product Council report
published in October
4. Respite for businesses in both sales and services: Businesses like
restaurants, which fall under both sales and service taxation, have to
calculate the VAT and service tax on both items separately. This makes the
calculations process very complex. GST will not distinguish between sales
and services, and thus the tax calculation will be done on total.
5. Reduction in logistics cost and time across States: Many transport
vehicles get delayed during movement across States due to small border tax
and checkpost issues. Interstate movement will become cheaper and less
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time consuming, as these taxes will be eliminated. GST can reduce logistics
costs of companies producing non-bulk goods (comprising all goods besides
the primary bulk commodities transported by railways - coal, iron ore,
cement, steel, food grains, fertilisers) by as much as 20 percent.

But all good things come to an end. With startups benefitting from GST, there
are also downsides of the tax regime.
Startups in the manufacturing sector will bear the brunt. Going by the
existing laws, a manufacturing business that has a turnover less than Rs 1.50
crore is exempted from paying duty. However, with the implementation of
GST, the turnover limit will be pulled down to Rs 25 lakh and making it tough
for many startups.
E-commerce companies will have to file quarterly and monthly returns and
pay tax on sales on their portals once GST comes into force.
Despite the few drawbacks, GST remains to be the friendliest tax reform in
India. With GST, will come transparency, efficiency and more growth.

IMPACTS OF GST ON STOCK MARKET

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The implementation of GST is expected to reduce the cost of logistics. This
includes costs of transportation as Octroi tax will not be levied separately.

The implementation of the GST is expected to simplify the tax structure and
make the supply chain more efficient. This would narrow the cost differentials
between organized and unorganized sector. The organized sector would be in
a better position to compete with the unorganized sector on prices.

Now the question arises, how does GST affect the stock market precisely?

If GST Bill passed, it will be good for stock market, as it will send a positive
message to Foreign investors as it shows countries policy-maker are more
serious about India economic reform., which will lead Foreign investors to
invest in Indian Stock Market.

GST will act as a catalyst for market uptrend but it can get capped on the
sentiments of hike in federal interest rate in coming months.

Here is a sector-wise snapshot on how the GST bill is likely to impact various
sectors and stocks.

AUTOMOBILES
Largely positive for demand, as it will lead to a 10-17 per cent fall in prices,
assuming an 18 per cent GST rate. Margin benefits to accrue for tractors, as
these can claim set-off against taxes paid on input. Organised battery and
other spares would become more cost competitive and gain market share.

Stock impact: Positive for Maruti Suzuki, Hero MotoCorp, Exide, Amara Raja,
Eicher Motor, Mahindra & Mahindra, Bajaj Auto. Negative for Ashok Leyland

FMCG
GST will be positive for household and personal care space, as the effective
tax rate reduces by 200-500 basis points (bps), apart from reducing
warehousing and logistical requirements. However, working capital for
retailers, and additional tax rates for jewellery and cigarette manufacturers
are negatives.

Stock impact: Positive for Hindustan Unilever, Emami, Godrej Consumer.

Negative for Titan, Bata, ITC

LOGISTICS
Passage of GST will lead to elimination of central sales tax and inter-state
value-added tax arbitrage possibilities. This will lead to consolidation of
warehouses and increased efficiencies in the logistics chain.

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Stock impact: Positive for Container Corporation of India, Adani SEZ,
Gujarat Pipav Port (longer term)

INFRASTRUCTURE
Clarity on works contract taxation is the key benefit for the sector. This could
reduce litigation, as it eliminates the difference between sales and services.

Stock impact: Positive for Larsen & Toubro (L&T)

CONSUMER DURABLES
Consumer durables will benefit from improved logistics. Direct benefits up to
200-300 bps in cost savings may accrue. A significant portion of direct
benefits will be passed on to end consumers because of a highly competitive
market.

Stock impact: Positive for Voltas, Havells, Crompton Greaves

OIL & GAS

Key petroleum products like crude, natural gas, high speed diesel and ATF
have been kept out of GST. Clarity is awaited for others. Compliance costs
are likely to rise because of dual indirect tax mechanism.

Stock impact: Neutral. Do not foresee any meaningful change on oil & gas
companies

CEMENT
Overall tax incidence on the sector could decline. The sector will also benefit
from expected decline in logistic costs. Firms can be expected to pass on the
benefits, given that demand and plant utilisation levels are picking up.

Stock impact: Positive for most companies

WIND POWER
GST will be negative for wind, turbine generator manufactures like Suzlon
and InoxWind, as pressure on developer margins and internal rates of return
could eventually force reduction in prices and realisations, up to 10-13 per
cent. However, if components are included in the exemption list, the impact
of GST will be nullified.

Stock impact: Negative for Suzlon, Inox Wind

UTILITIES

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Exclusion of sale of electricity from GST could potentially raise the cost of
coal-fired and renewable energy for Discoms. Profitability of independent
power producers selling via medium/long-term PPAs is unlikely to be dented
as cost escalation would likely be passed on.

Stock impact: Positive for CESC, negative for JSW Energy

PHARMACEUTICALS
GST rollout could be negative for the sector, as it is likely to increase indirect
tax. Analysts say indirect taxes paid by pharma companies could increase by
60 per cent and MRP by four per cent.

Stock impact: Negative for Alkem, Glaxo Pharma

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Impact of GST on Common Man

Positive Impact of GST on the Common man or

Advantages of GST:
A unified tax system removing a bundle of indirect taxes like VAT, CST,
Service tax, CAD, SAD, Excise etc.
Less tax compliance and a simplified tax policy as compared to earlier
tax structure.
Removes cascading effect of taxes i.e. removes tax on tax.
Due to lower burden of taxes on the manufacturing sector,
the manufacturing costs will be reduced, hence prices of consumer
goods likely to come down.
Due to reduced costs some products like cars, FMCG etc. will become
cheaper.
This will help in lowering the burden on the common man i.e. you will
have to shed less money to buy the same products which were earlier
costly.
The low prices will further lead to an increase in the
demand/consumption of goods.
Increased demand will lead to increase supply. Hence, this will
ultimately lead to rise in the production of goods.
The increased production will lead to more job opportunities in the long
run. But, this can happen only if consumers actually get cheaper
goods.
It will curb circulation of black money. This can happen only if the
kacha bill system, normally followed by traders and shopkeepers is
put to check.
A unified tax regime will lead to less corruption which will indirectly
affect the common man.
Most importantly, GST will help to boost the Indian economy in the long
run.
But, this is possible only if the actual benefit of GST is passed on to the final
consumers. There are various other factors also like the sellers profit
margin that determine the final price of goods.
GST alone does not determine the final price of goods.

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Negative Impact of GST on the Common man or
Disadvantages of GST:
Service tax rate @ 15% is presently charged on the services. So, if GST
is introduced at a higher rate which is likely to be seen in the near
future, the cost of services will rise. In simple words, all the services
like telecom, banking, airline etc. will become more expensive.
Increased cost of services means, an add on to the monthly expenses.
We will have to reschedule our budgets to bear the additional services
cost.
An increase in inflation might be seen initially.
Being a new tax, it will take some time for the people to understand
it completely. Its actual implications can be seen only when the rate of
tax is determined.
It is easier said than done. There are always some
complications attached. It is a consumption based tax, so in case of
services the place where service is provided needs to be determined.
If actual benefit is not passed to the consumer and the seller increases
his profit margin, the prices of goods can also see a rising trend.
A strict check on profiteering activities will have to be done, so that the
final consumer can enjoy the real benefits of GST.
Although, a large number of officers are being trained and a systematic
IT software is being developed for the successful implementation of
GST. But, it will take some time for the people including the
manufacturers, the wholesalers, the retailers or the final consumers to
understand the whole process and apply it correctly.

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Overall Advantage of GST
o The tax structure will be lean and simple.

o The whole Indian market will be an incorporated market which may

transform into lower business costs. It can simplify seamless
movement of goods across states and reduce the transaction costs of
businesses.

o It is beneficial for export businesses. Because it is not applied for

goods/services which are exported out of India.

o It's implementation has long term benefit. The lower tax burden could
translate into lower prices on goods for customers.

o The Suppliers, manufacturers, wholesalers and retailers are able to

recover GST suffered on input costs as tax credits. This decreases the
cost of doing business, thus enabling reasonable prices for customers.

o It can bring more transparency and better compliance.

o GST implementation can control corruption. Number of departments

(tax departments) will reduce which in turn may lead to less
corruption.

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 o More business persons will come under the tax system thus
broadening the tax base. This may lead to better and more tax
revenue collections.

o Companies which are under unorganized sector will come under tax
area.

o The procedure of GST registration would also be made simple, thereby

improving the ease of starting a business in India.

Major Challenges of GST

Besides benefits, there are several challenges in implementing GST bill.
-To implement the bill, there has to be lot changes at administration level.
-GST, being a consumption-based tax, states with higher consumption of
goods and services will have better revenues. So, the co-operation from
state governments would be major factors for the effective implementation
of GST.

It is assessed that since GST substitutes many flowing taxes, the common
man may get benefit after implementation. But it depends on rate fixed on
the GST. With the execution of GST, a consumer will pay less tax.

GST is also advantageous for companies. GST will cut the number of taxes
under the current system like VAT, excise duty, service tax, sale tax,

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entertainment tax, luxury tax. Single tax will be applied on both Goods and
Services. This will save the managerial cost for companies.

The current indirect system is so burdensome that the trucks have to stop at
check posts and toll plazas for weeks to get the clearance to enter the state
which considerably lessen their average distance travelled per day. With the
application of the GST, the trucks need not to stop on check posts. Therefore,
it will reduce the buffer stock. In this way, it will increase the operating
proficiency of the companies.

It is assumed by experts that the most substantial opposing impact for

consumers may arose because petroleum is excluded of the GST domain.
Subsequently, the tax costs (taxes other than GST will continue) could have
a flowing impact on the whole economy. According to news reports,
economic adviser has mentioned that "bringing electricity and petroleum
within the scope of GST could make Indian manufacturing more competitive".
Additionally, certain challenges in-built in the GST structure, such as a GST
levy on maximum retail price (MRP) for packaged goods and GST on barter
exchanges, will trouble to the common man.

Other economic evaluators inferred that GST will eliminate flowing effect of
taxes rooted in cost of production of goods and services and will provide
seamless credit throughout value chain. This will considerably decrease cost
of home-grown goods and will encourage Make in India. The sectors which
have long value chain from basic goods to final consumption stage with
operation spread in multiple states such as FMCG, pharma, consumer
durables, automobiles and engineering goods will be the major recipients of
GST system. It is supposed that GST will simplify business operations in
India. Integration of existing multiple taxes into single GST will considerably
lessen cost of tax compliance and transaction cost

To sum up facts, the GST is an indirect tax which entails that the tax is
approved till the last stage where it is the purchaser of the goods and
services who bears the tax. The GST will substitute most other indirect taxes
and synchronize the differential tax rates on mass-produced goods and
services. The government of India claims that GST will enhance Indian GDP
by 2%. With the enactment of GST, customers will have funds to spend
because of lower tax rates. It can be said that it will completely change the
indirect tax system in India.

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Conclusion
So far this report has described the origin of GST and the way it would
function from April 1, 2017. India will follow a Dual GST Model which has a
separate working at Centre and State levels (CGST and SGST). Its striking
difference between with the current taxation system shall definitely have
many consequences and will induce changes in the economy noticeably. We
have seen the impact of GST on various sections of the market such as
stocks, business etc.

Although the true results would come out only after the actual launch of the
GST but from our study of GST, some conclusions can surely be made. First
of all, this thing should be kept in mind that GST is a long term strategy, it
would lead to a higher output, more employment opportunities, and
economic inclusion. Initially however, it is likely to cause high inflation rates,
administrative costs, and face stiff oppositions from states due to loss of
autonomy. Its additional advantage over current VAT to include both goods
and services is of great value.

It is estimated that India will gain $15 billion a year by implementing goods
and services tax as it would promote exports, raise employment and boost
growth.

The roadmap for GST to accomplish its goals is full of potholes and obstacles.
But the platform is ready enough to suffice for it. Hopefully, the BJP
government would successfully run the economy with this upcoming tax
reform.

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