Impact of GST (Goods and Services Tax) -
Assignment
Introduction of GST
GST means Goods and Services Tax. It is a single tax system in India that replaced many indirect
taxes like VAT, Service Tax, Excise Duty, etc.
Example: Earlier, if you bought a product, you paid many taxes. Now under GST, you pay only one
tax.
Types of GST in India
1. CGST - Central Government tax
2. SGST - State Government tax
3. IGST - For interstate trade
GST Rates in India
0%, 5%, 12%, 18%, 28% depending on goods and services
Why GST was Needed
GST was introduced to remove problems in the old tax system.
Problem 1: Tax on Tax (Before GST)
Earlier, tax was charged on already taxed amount.
Example: A product cost ■100. First tax 10% = ■10. Then another tax on ■110.
After GST
Tax is charged only on original value.
Example: ■100 product taxed once.
Problem 2: Trucks Stopped at State Borders
Before GST, trucks had to stop for checking at state borders.
Example: A truck going from Delhi to Haryana had delays.
After GST
No border checking, transport is faster.
Problem 3: Too Much Paperwork
Earlier, businesses had to fill many forms.
GST made it online and easier.
How GST Works
Step 1: Farmer to Flour Mill
Farmer sells wheat ■100. No GST on raw produce.
Step 2: Flour Mill to Biscuit Factory
Flour sold at ■200 + GST. Input credit used.
Step 3: Biscuit Factory to Shopkeeper
Biscuits sold ■300 + GST.
Step 4: Shopkeeper to Customer
Customer buys at ■350 + GST.
Total Tax Collected
Government collects tax at each stage but avoids double taxation.
Positive Impact of GST
More Tax Collection: Example - Better tracking increases revenue.
More People Paying Tax: Businesses must register.
Stops Black Money: Transactions are recorded.
Impact on Business
Transport Faster: No border delays.
One India Market: Same tax across India.
Easy for New Business: Simple system.
Impact on Customer
Many Goods Cheaper: Reduced tax burden.
Clear Bill: GST shown clearly.
Same Price Across India.
Impact on Economy
GDP Growth: Improved efficiency.
Exports Increase: Competitive pricing.
Formal Economy Growth.
Negative Impact of GST
Problems for Shopkeepers
Too Much Form Filling: Monthly returns.
No Sale Without GST Number.
Money Gets Blocked: Refund delays.
Problems for Common Man
Services Costly: Higher tax rates.
Confusing Rates.
Petrol and Diesel not included.
Problems for Government
Conflicts with States.
Technical Issues.
Fake Firms Problem.
Impact on Small Businessman
Good: Wider market.
Bad: Compliance burden.
Impact on Students
Better understanding of tax system.
Impact on Farmers
Mostly unaffected but indirect benefits.
Conclusion
GST has both good and bad points but overall it improved the tax system.
Suggestions to Improve GST
Simplify tax rates, include petrol, improve system, reduce filing burden.
Additional Notes Page 1
GST continues to evolve and improve in India.
Additional Notes Page 2
GST continues to evolve and improve in India.
Additional Notes Page 3
GST continues to evolve and improve in India.
Additional Notes Page 4
GST continues to evolve and improve in India.
Additional Notes Page 5
GST continues to evolve and improve in India.
Additional Notes Page 6
GST continues to evolve and improve in India.
Additional Notes Page 7
GST continues to evolve and improve in India.
Additional Notes Page 8
GST continues to evolve and improve in India.
Additional Notes Page 9
GST continues to evolve and improve in India.
Additional Notes Page 10
GST continues to evolve and improve in India.
Additional Notes Page 11
GST continues to evolve and improve in India.
Additional Notes Page 12
GST continues to evolve and improve in India.
Additional Notes Page 13
GST continues to evolve and improve in India.
Additional Notes Page 14
GST continues to evolve and improve in India.
Additional Notes Page 15
GST continues to evolve and improve in India.