“A STUDY OF GOODS AND

SERVICE TAX (GST) ON INDIAN

ECONOMY”

By Anshuman Shukla
 PROJECT REPORT

A STUDY OF GOODS AND SERVICE TAX (GST) ON

INDIAN ECONOMY

Project submitted in partial fulfillment for degree of “Bachelor

in Commerce ( Honours)” under Sambalpur University

Submitted by:

ANSHUMAN SHUKLA

COLLEGE ROLL NO: BC-16-111

UNIVERSITY ROLL NO: S03616COM094
REGISTRATION NO: 35738/16

Under the guidance of:

PROF. SHAIK AZHAR IQBAL

LECTURER, DEPARTMENT OF COMMERCE

LAXMI NARAYAN COLLEGE, SAMBALPUR UNIVERSITY, JHARSUGUDA

 INDEX

 Certificate
 Declaration
 Acknowledgement
 Preface
 List of Tables
 List of Figures
 List of Abbreviations

PARTICULARS PAGE NO.

CHAPTER 1- INTRODUCTION 2-3
1.1-Introduction to GST- The conceptual
framework
1.2-Objectives of the study 4
1.3-Scope of the study 4
1.4-Research Methodology 5-6
1.5-Sources of Data 6-7
1.6-Period of study 7
1.7-Limitations of the study 7
1.8-Review of Literature 8-11
1.9-Practical relevance of the study 11

CHAPTER 2- THE HISTORICAL

BACKDROP
2.1-History of GST in India 13-17
2.2-The old VAT system 17-18
2.3-The cascading effect 18-20
2.4-Indirect tax system in India before GST 20-21

CHAPTER 3- THE ADVENT OF GST IN

INDIA
3.1-When was GST introduced in India? 23
3.2-Why was GST introduced in India? 23-24
3.3-Need for GST in India 25-26
3.4-VAT v/s GST 27-31

CHAPTER 4- GST FRAMEWORK

4.1-Indian GST model 33-40
4.2-GST Council 40-43
4.3-Goods and Service tax network 43-46

CHAPTER 5- THE IMPACT OF GST ON

INDIAN ECONOMY
5.1-The impact of GST on various sectors of 48-52
the economy
5.2-Overall impact of GST on Indian 52-63
Economy
5.3-Conclusion 64
5.4-Findings of the study 64-65
5.5-Suggestions 66
5.6-Bibliography and References 67
ANNEXURE 1A

SUPERVISOR’S CERTIFICATE

This is to certify that the project entitled “A study of Goods and Service Tax(GST) on Indian
Economy” submitted by Mr. Anshuman Shukla for the degree of ‘Bachelor in Commerce
Honours’ to Laxmi Narayan College, Sambalpur University, embodies the result of bona fide
research work under my guidance and supervision.

I further declare that to the best of my knowledge and belief this project

 Has not been submitted to any other institution or university for the award of any other
degree or diploma earlier.
 Embodies the work of the candidate himself.
 Has duly been completed.
 Is up to the standard both in respect of contents and language for being referred to the
examiner.

Place: Signature of the Supervisor

Date: Name: Prof. Shaik Azhar Iqbal

Designation: Lecturer in Commerce

College name: Laxmi Narayan College, Jharsuguda

ANNEXURE 1B

STUDENT’S DECLARATION

I declare the project entitled “A study of Goods and Service Tax(GST) on Indian Economy”
submitted by me to the Department of Commerce, L.N. College, Jharsuguda, is my own work
and has been carried out by me. I further declare that to the best of my knowledge the project
does not contain any part of any work, which has been submitted for the award of any degree
either in this University or in any other University/ Deemed to be University without proper
citation.

Date: Signature of the Candidate

Place: Name: Anshuman Shukla

Roll No: BC-16-111

College name: Laxmi Narayan College, Jharsuguda

 ACKNOWLEDGEMENT
This project report has been submitted for the partial fulfillment of Honours Degree

First of all, I would like to extend my sincere thanks to my Principal Shri C.B Dutta sir for his
kind co-operation. My heartfelt gratitude to Professor N.K Panda (HOD) and my guide Sir.
Shaik Azhar Iqbal for his mentorship, valuable advice and extensive discussions during my
research. This work

would not have been possible without his guidance, support and encouragement.

Also, I gratefully acknowledge the academic staff of our department for their valuable

suggestions. I take this opportunity to sincerely acknowledge the library staff of L.N. College,

Jharsuguda for letting me avail their library facility to gather information which buttressed me to

perform my work more comfortably.

This list is incomplete without acknowledging my family and friends for always standing by me.

If I have forgotten anyone, I apologize. Lastly, my thanks is due to one and all.
 PREFACE
This project report “ A study of GST on Indian economy” has been undertaken for the partial
fulfillment of B.Com Honours degree.

A comprehensive multistage Value Added Tax (VAT) system, viz., Goods and Services Tax
(GST), is introduced in India since 1 July 2017. GST encompasses various taxes from Union and
State indirect tax bases and it is a dual VAT system with concurrent taxation power to Union and
State governments. It was envisaged that removal cascading of taxes and enshrining destination
based consumption tax system under GST will encourage investment and improve ease-of-doing
business in India. Though it is not right time to comment on success or failure of Indian GST
system unless the tax system stabilizes, so far revenue mobilization from GST is not
encouraging. The shortfall in GST collection has been acknowledged in the ‘Medium Term
Fiscal Policy cum Fiscal Policy Strategy Statement’ of the Union Budget 2019-20. The genesis
of revenue shortfall may be design and structural in nature and/or compliance and tax
administration related. However, the uncertainty surrounding GST revenue collection is an issue
which needs an in-depth assessment for fiscal management of Union and State governments. The
impact of revenue uncertainty will not be restricted to Union finances alone; it will spill over to
state finances through inter-governmental fiscal transfers. Therefore, depending on seriousness
of the uncertainties associated with GST revenue collection, devising an inter-governmental
fiscal transfer framework may be a challenging task for the Fifteenth Finance Commission.
Given the information available in the public domain, this paper attempts to explore possible
causes of revenue shortfall and assess possible impacts of revenue shortfall on Union and State
finances. The project work takes a deep dive into the study of impact of GST on Indian
Economy.
 PARTICULARS PAGE NO.
LIST OF TABLES 19
Table 1 31
Table 2 46
Table 3 62
Table 4

LIST OF FIGURES 54
Figure 1 55
Figure 2 57
Figure 3 57
Figure 4

LIST OF ABBREVIATIONS

 GST- Goods and service tax

 GSTN-Goods and service tax network
 CGST-Central goods and service tax
 IGST-Integrated goods and service tax
 SGST-State goods and service tax
 CST-Central sales tax
 CVD-Counter veiling duty
 SAD-Special additional duty
 VAT-Value added tax
 ITC-Input tax credit
 B2B-Business to Business
 GSTCC- Goods and service tax compensation cess
 GTR-Gross total returns
 GSTR-Goods and service tax returns
 RCM-Revenue collection mechanism
 GVA-Gross value added
 BCD-Basic customs duty