GST: A game changer

Abstract

The fiscal policy of India took a monumental turn on July 1, 2017 as the government implemented Goods and Service Tax (GST). Goods and Service Tax is a destination-based tax that subsumes indirect taxes at both Centre and State level into a single tax with 5 slabs with option of availing input tax credit at each stage. The discussion on this reform started nearly two decades ago inspired by positive empirical evidence from nearly 160 countries around the world including some of the most advanced, emerging and developing economies. India adopted a dual GST structure based on a pragmatic federal relationship that requires both the Center and States to play a crucial role in determining GST rates. Objective of the study: Through this study we aim to understand the pain points of implementing the new GST model in India for different stakeholders. The expected outcome of the study is to analyze in depth the current structure of GST in India and identify gaps causing teething issues in the implementation of the new tax regime. Following a gap analysis, the objective would be to propose recommendations and alterations in the policy by drawing from the experience of other countries who have implemented GST.