Jou nal o Resea ch and De elopmen
Pee Re iewed In e na ional, Open Access Jou nal.
ISSN : 2230-9578 | Websi e: h ps://j d b.o g Volume-17, Issue-9(I) | Sep - 2025
252
The Impac on Goods and Se ice Tax on Indian Economy
D . Kalam P.G1, D . Agale S.V2, D . Sa sa e S. M3
123Assis an . P o esso , Depa men o Comme ce,
Babu aoji Adaska
Maha idhyalaya Kaij,
Email [email protected]
Manusc ip ID:
JRD -2025(I)-170957
ISSN: 2230-9578
Volume 17
Issue 9(I)|
Pp. 252-255
Sep . 2025
Submi ed: 9 Aug. 2025
Re ised: 20 Aug. 2025
Accep ed: 20 Sep . 2025
Published: 30 Sep . 2025
Abs ac
The in oduc ion o he Goods and Se ices Tax (GST) in India on 1s July 2017 ma ked a
signi ican miles one in he coun y’s economic e o m. Enac ed h ough he 101s Cons i u ional Amendmen
Ac , GST uni ied a agmen ed indi ec ax sys em in o a comp ehensi e, des ina ion-based ax s uc u e. This
e o m aimed o simpli y compliance, elimina e cascading e ec s, and c ea e a common na ional ma ke . The
s udy highligh s he his o ical backg ound o GST, i s dual s uc u e o CGST, SGST, and IGST, and sec o -
speci ic exemp ions. The esea ch also examines he ad an ages o GST, such as enhanced ax compliance,
inc eased go e nmen e enue, educed logis ical cos s, and g ea e e iciency in ade and indus y. Despi e
ini ial challenges like in la iona y p essu es and ansi ional hu dles, GST has la gely been a p og essi e
e o m con ibu ing o economic in eg a ion, compe i i eness, and g ow h. The indings sugges ha while
GST implemen a ion has been complex, i s long- e m impac is expec ed o os e anspa ency, e iciency,
and sus ainable de elopmen o he Indian economy.
Keywo ds:
Goods and Se ices Tax (GST); Indian Economy; Indi ec Tax Re o m; Tax S uc u e; Economic
In eg a ion; GST Council; Re enue Mobiliza ion; Compliance; One Na ion One Tax; 101s Cons i u ional
Amendmen .
In oduc ion
The gene al ax e e s o a le y by a go e nmen on indi iduals' income, goods,
se ices, o p ope y. Taxes a e he p ima y sou ce o e enue o go e nmen s, which hey
use o und public se ices and in as uc u e. Taxes can ake a ious o ms,
including
income ax, sales ax, p ope y ax, and co po a e ax, among o he s. The speci ic ypes and
a es o axes a y widely depending on he ju isdic ion and he laws go e ning axa ion in
ha pa icula a ea. Di ec axes a e axes ha a e di ec ly imposed on indi iduals o
en i ies and canno be passed on o ano he pa y. These
axes a e ypically le ied on
income, weal h, o asse s, and hey a e paid di ec ly o he go e nmen by he axpaye .
Examples
o di ec axes include income ax, p ope y ax, co po a e ax, and capi al gains
ax.
Indi ec axes a e axes le ied on goods and se ices a he han on indi iduals o
en i ies di ec ly. Unlike di ec axes, which a e paid di ec ly by he pe son o en i y on
whom he ax is imposed, indi ec axes a e usually collec ed by an in e media y, such as a
selle o se ice p o ide , who hen passes he ax bu den on o he end consume . Indi ec
axes can ake a ious o ms, such as sales ax, alue-added ax (VAT), excise ax, cus oms
du ies, and a i s. Fo example, when you pu chase a p oduc a a s o e, he p ice you pay
includes he indi ec ax imposed by he go e nmen , such as a sales ax o VAT.
Quick Response Code:
Websi e:
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DOI:
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C ea i e Commons (CC BY-NC-SA 4.0)
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A ibu ion-NonComme cial-Sha eAlike 4.0 In e na ional Public License, which allows o he s o emix,
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Add ess o co espondence:
T. S. Bansiappa, Comme ce & Accoun ancy Depa men , Lec u e in B . Babasaheb Kha deka
D . Kalam P.G, Assis an . P o esso , Depa men o Comme ce, Babu aoji Adaska ,
Maha idhyalaya Kaij
How o ci e his a icle:
Kalam P.G, Agale S.V, Sa sa e S. M. (2025). The Impac on Goods and Se ice Tax on Indian
Economy. Jou nal o Resea ch & De elopmen , 17(9(I)),252-255
O iginal A icle
Jou nal o Resea ch and De elopmen
Pee Re iewed In e na ional, Open Access Jou nal.
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253
The s o e collec s his ax om you as he consume and hen emi s i o he go e nmen .
His o y o Goods and Se ices Tax (GST)
The idea o GST in India was i s p oposed by Kelka on Indi ec axes in 2000. The objec i e was o eplace he
p e ailing
complex and agmen ed ax s uc u e wi h a uni ied sys em ha would simpli y compliance, educe
ax cascading, and p omo e economic in eg a ion. The Empowe ed Commi ee o S a e Finance Minis e s
p epa ed a design and oadmap,
eleasing he Fi s Discussion Pape in 2009. The Cons i u ion Amendmen Bill
was in oduced in 2011 bu aced challenges
ega ding compensa ion o S a es and o he issues.
A e yea s o
delibe a ion and nego ia ions be ween he Cen al and S a e Go e nmen s, he Cons i u ion (122nd Amendmen )
Bill, 2014, was in oduced in he Pa liamen . The Bill aimed o amend he Cons i u ion o enable he
implemen a ion o GST. The Cons i u ion Amendmen Bill was passed by he Lok Sabha in May 2015. The Bill
wi h ce ain amendmen s, was inally passed in he Rajya Sabha and he ea e by he Lok Sabha in Augus 2016.
Fu he , he Bill has been a i ied by he equi ed numbe o S a es and has since ecei ed he assen o he
P esiden on 8 h Sep embe , 2016 and has been enac ed as he 101s Cons i u ion Amendmen Ac , 2016. The
GST Council was no i ied i.e. 15 h Sep embe 2016. To assis he GST Council, he o ice o he GST Council
Sec e a ia was also es ablished.
The GST Council, consis ing o he Union Finance Minis e and ep esen a i es
om all S a es and Union Te i o ies, was es ablished o make decisions on a ious aspec s o GST, including
ax a es, exemp ions, and adminis a i e p ocedu es. I
played a c ucial ole in shaping he GST amewo k in
India. On 1s July, 2017, GST laws we e implemen ed, eplacing a complex
web o Cen al and S a e axes. Unde
he Indian GST, goods and se ices a e ca ego ized in o di e en ax slabs, including
5%, 12%, 18%, and 28%.
Some essen ial commodi ies a e exemp ed om GST, Gold and job wo k o diamonds a ac low a e
o axa ion.
Compensa ion is being le ied on deme i goods and ce ain luxu y i ems.
I can be said ha he his o y o GST in
India showcases an eno mous shi in he coun y's ax s uc u e, aiming o c ea e a mo e uni ied, e icien , and
anspa en indi ec ax egime o he bene i o businesses and he economy as a whole. Goods and Se ices Tax
(GST) is a inclusi e indi ec ax le ied on he supply o goods and se ices in India. He e a e some o he salien
ea u es o GST:
1.
One Na ion, One Tax: GST eplaced mul iple indi ec axes le ied by he Cen al and S a e Go e nmen s,
such as excise du y, se ice ax, alue-added ax (VAT), and o he s. I b ough uni o mi y in he ax s uc u e
ac oss India, elimina ing he cascading e ec o axes.
2.
Dual S uc u e: GST ope a es unde a dual s uc u e, comp ising he Cen al GST (CGST) le ied by he
Cen al Go e nmen
and he S a e GST (SGST) le ied by he S a e Go e nmen s. In he case o In e -s a e
ansac ions, In eg a ed GST (IGST) is applicable, which is collec ed by he Cen al Go e nmen and
appo ioned o he espec i e S a e. Impo o goods o
se ices would be ea ed as in e -s a e supplies and
would be subjec o IGST in addi ion o he applicable cus oms du ies.
3.
Des ina ion-based Tax: GST is a des ina ion-based ax, le ied a each s age o he supply chain, om he
manu ac u e o he consume . I is applied o he alue addi ion a each s age, allowing o he seamless low
o c edi s and educing he ax bu den on he end consume
4.
Inpu Tax C edi (ITC): GST allows o he consump ion o inpu ax c edi , whe ein businesses can claim
c edi o he ax
paid on inpu s used in he p oduc ion o p o ision o goods and se ices. This helps a oid
double axa ion and educes he
o e all ax liabili y
5.
GST would apply on all goods and se ices excep Alcohol o human consump ion. GST on i e speci ied
pe oleum p oduc s (C ude, Pe ol, Diesel, ATF & Na u al Gas) would by applicable om a da e o be
ecommended by he GSTC. Tobacco and obacco p oduc s would be subjec o GST. In addi ion, he Cen e
would ha e he powe o le y Cen al Excise du y on hese p oduc s. Expo s a e ze o- a ed supplies. Thus,
goods o se ices ha a e expo ed would no su e inpu axes o axes on inished p oduc s
6.
Online Compliance: GST in oduced an online po al, he Goods and Se ices Tax Ne wo k (GSTN), o
egis a ion, iling o e u ns, paymen o axes, and o he compliance- ela ed ac i i ies. I s eamlined he
p ocess and made i easie o axpaye s o ul ill hei obliga ions.
7.
Sec o -speci ic Exemp ions: Ce ain sec o s, such as heal hca e, educa ion, and basic necessi ies like ood
g ains, a e gi en ei he exemp ed om GST o ha e educed ax a es o ensu e a o dabili y and
accessibili y.
Jou nal o Resea ch and De elopmen
Pee Re iewed In e na ional, Open Access Jou nal.
ISSN : 2230-9578 | Websi e: h ps://j d b.o g Volume-17, Issue-9(I) | Sep - 2025
254
The ax came in o e ec om 1 July 2017 h ough he implemen a ion o he One Hund ed and Fi s
Amendmen o he Cons i u ion o India by he Indian go e nmen . Goods exemp ed om GST a e -
Pe oleum p oduc s, Alcohol, p oduc s, e c. I 's impo an o no e ha he GST amewo k is subjec o
changes and amendmen s a e passed based on he e ol ing needs o he economy and he Go e nmen 's
policy decisions.
The s uc u e o GST
Sou ce:
h ps:// axgu u.in/goods-and-se ice- ax/dual-gs -model-gs -s uc u e-india.h ml
Re iew o Li e a u e
1.
Ni in Kuma (2014) s udied, “Goods and Se ice Tax- A Way Fo wa d,” ha implemen ing GST in India
would help in
emo ing cu en indi ec ax sys em and expec ed o encou age unbiased ax s uc u e which is
indi e en o geog aphical
loca ions.
2.
Sa ma, M and Bhaska .V, (2012) in he s udy s a ed ha by implemen ing GST would gi e many bene i s o
ou coun y which is no gi en by cu en ax s uc u e and will bene i he economy. Hence GST would
bene i he indus y, ade, consume s and he Go e nmen .
3.
Nishi a Gup a (2014), S udied, “GST in India: A Big Leap in he Indi ec Taxa ion Sys em” and concluded ha
GST is a b oad
based, single, comp ehensi e ax le ied on goods and se ices in which, he selle may claim
he inpu c edi o ax which
he has paid while pu chasing he goods, he inal consume will bea only he GST cha ged by he las deale
in he supply
chain.
4.
Sakha am Vani (2017), In he s udy, in India implemen a ion o GST would also g ea ly help in emo ing
economic dis o ion caused by he p esen complex ax s uc u e and will help in he de elopmen o a
common na ional ma ke .
S a emen o he Resea ch
GST has signi ican ly impac ed he Indian economy since i s incep ion in 2017. I simpli ied he ax s uc u e,
boos GDP by o malizing he economy, and c ea ed a uni ied na ional ma ke . While i ini ially led o in la iona y
p essu e, i 's expec ed o ha e a neu al o disin la iona y impac in he long un.
The Objec i es o he S udy
1.
To examine he impac o GST on he Indian economy.
2.
To explo e he ad an ages and challenges o GST in he Indian si ua ion
Impac o GST on he Indian Economy
Below a e some a eas whe e we ha e seen a posi i e impac o GST on he Indian economy
•
GST s eamlined he ax sys em by eplacing mul iple indi ec axes wi h a single ax, educing complexi y and
making
compliance mo e manageable o companies.
•
GST's echnology-d i en p ocedu es like online egis a ion, e- iling o e u ns, and e-way bills ha e aised ax
compliance.
The ax base has g own, inc easing he go e nmen 's ax in ake.
•
GST's simpli ied ax code, elimina ion o in e s a e es ic ions, and emo al o checkpoin s and en ance ax
ba ie s a
s a e bo de s inc eased e iciency and dec eased logis ical expenses. This helped he economy
h i e, especially in indus ies like manu ac u ing and logis ics.
Conclusion
In conclusion, he impac o GST on he Indian economy has been mul i ace ed, wi h implica ions o
businesses, consume s, and go e nmen inances. While he ansi ion o he new ax egime has posed challenges,
he long- e m bene i s o GST in
e ms o economic in eg a ion, e iciency gains, and e enue mobiliza ion a e
expec ed o ou weigh he ini ial ee hing p oblems. As India con inues i s jou ney owa ds economic e o m and
de elopmen , GST emains a co ne s one e o m measu e, d i ing g ow h, compe i i eness, and p ospe i y in
he coun y's economic condi ion.
Re e ences
1.
Ni in Kuma (2014), “Goods and Se ice Tax in India-A Way Fo wa d”, Global Jou nal o Mul idisciplina y
S udies, Vol 3, Issue6, May 2014.
2.
Sha ma, Jana.V.M and Bhaska .V, (2012), “A Road Map o Implemen a ion o Goods and Se ice Tax”,
Economic & Poli ical Weekly.
3.
Nishi a Gup a (2014), “Goods and Se ices Tax: I s implemen a ion on Indian economy”, CASIRJ Volume 5,
Jou nal o Resea ch and De elopmen
Pee Re iewed In e na ional, Open Access Jou nal.
ISSN : 2230-9578 | Websi e: h ps://j d b.o g Volume-17, Issue-9(I) | Sep - 2025
255
Issue 3, Pg. No.126-133.
4. Sakha am Vani (2017), Goods and Se ice ax (GST) and i s ou come in India” Jou nal o Madhya P adesh
Economic
Associa ion ISSN 2277-1123 Feb2017, 24(1).
