AN EPIGRAMMATIC ON THE DOWNSIDE
OF GST BILL ON CONSUMERS
Ms. LUBNA SURAIYA,
Research Scholar,
Research Department of Commerce,
St. Xavier’s College, Palayamkottai
Tirunelveli Dist, Tamil Nadu State

INTRODUCTION
India follows the federal tax system for levy and collection of various taxes.
Different types of indirect taxes are levied and collected at different point in the supply
chain. An announcement was made by P. Chidambaram, Union Finance Minister in
the Central Budget (2007-2008) to the effect that GST would be introduced from April
1, 2010 and the Empowered Committee of State Finance Ministers, on his request,
would work with the Central Government to prepare a road map for introduction of
GST in India. An important interaction has also taken place between Pranab
Mukherjee, Union Finance Minister and the Empowered Committee (October 19,
2009) discussed on phasing out CST. The Constitution Amendment Bill for Goods and
Services Tax (GST) has been approved by The President of India in the Parliament
(Rajya Sabha on 3 August 2016) and Lok Sabha on 8 August 2016) and ratification by
more than 50% of state legislatures. The Government of India is committed to replace
all the indirect taxes levied on goods and services by the Central and State govt.

MILESTONE OF GST
January 2007: First
GST study released
by Dr. Shome
May–October 2007:
Empowered
Committee was
formed on GST
Models.
November 2007:
Joint Working
Group Report to
FM.
February 2008: FM
announced
introduction of GST
in 2008-2009 Budget
Speech.
April 2008: EC
finalized the views on
GST.
January 2009:
Discussion of EC on
CGST & SGST
April 2010: GST was
introduced

OBJECTIVES OF THE STUDY
1. To study about the concept of GST
2. To analyze the reasons that lead to GST.
3. To understand the negative consequences of GST.
METHODOLOGY
The study is based on Secondary Data. The data collection includes from:
1. National Information Utility (NIU)
2. Press Information Bureau, Government of India, Ministry of Finance.
3. Central Board of Excise and Customs.
4. Goods & Services Tax Network of Sec (8) under new companies Act, 28.03.2013
5. Alberta Treasury Board and Finance & Institute of Cost Accountants of India.

CONCEPT OF GST

REASONS FOR GST
1. Economic Union of India and encourage the businessmen to focus on pan-India
operations.
2. Simple tax structure being transparent in character allows to know exactly how
much taxes are being charged and on what base to consumers.
3. Paperless work and reduction in accounting complexities. GST regime will boost
the 'Make In India' programme as manufacturers will get input tax credits for
capital goods.
4. Increasing the number of tax payers and generating the revenue for the
government.
5. Exports of Indian goods in international markets by removing custom duties.

IMPACT OF GST IN INDIAN ECONOMY
Reduces the tax burden
Road blockage for perishable goods in
toll plazas and check points
Eradicate Buffer Stocks

SHORTCOMING OF GST
UBS Securities study found that the truck drivers in India spend 60% of their
time off roads negotiating check posts and toll plazas.
11 categories of taxes are levied on the road transport sector. The GST will
help bring down logistical costs.
According to the government estimates, excise tax exemptions result in
revenues of Rs. 1.8 lakh crores. The comparable figure for the states is about Rs.
1.5 lakh crores. India loses about 2.7 per cent of GDP because of exemptions.
Fear of inflation could rise in the short term under the GST tax regime, as tax
rate may go up to 18 per cent from 15%.

GST would impact negatively on the real estate market. It would add up to 8
percent to the cost of new homes and reduce demand by about 12 percent.
The credit of GST paid is claimed on the basis of invoice and the tie of the
payment is immaterial.
All declaration forms from industries point of view must be abolished like (Form
F, C). With regard to classification of goods are yet to be decided.
India's GST structure is complex says: IMF will improve tax compliances.
Exports will become competitive as the GST regime will eliminate the cascading
impact of taxes.

CONCLUSION
In India, tax forming a major component of revenue, tax evasion
is one of the major issues. Many steps are taken by government to reduce
tax evasion. Value added tax has different effects on the society. Many
efforts are taken to increase foreign direct investment to strengthen
economy. Introduction of GST will help to reduce problems of tax system
in India and lead to its improvement. The dark side of the GST should be
considered if any lethargy is observed it can cause serious threat to the
economy.