IMPACT OF GST ON INDUSTRIAL SECTOR IN INDIA: A STUDY

Undoubtedly, the Goods and Services Tax, popularly referred to as GST, is one of the most remarkable historic reforms in the effort to bring the entire nation under a single tax regime. The earlier taxation system was mainly divided into two major categories- Direct Taxes and Indirect Taxes (Excise Duty, Sales Tax, Local Body Tax, Customs Duty, and Service tax), depending on whether the tax burden is borne by the payer directly or shifted to others in the value chain. This taxation system ultimately led to the tax on tax cycle resulting in increased cost of all goods and services. Thus, GST is a move to merge the taxation system to make it simpler and more effective. So, basically with the notion of ‘one nation, one tax, one market’, GST will subsume the indirect taxes both at the central level and state level. These alterations have impacted every sector of the economy and have also ensured in bringing every business under the tax net.

The Indian manufacturing industry has emerged as one of the high growth sectors in India, and the launch of ‘Make in India’ initiative further propelled and gave this sector the necessary boost. According to the Global Manufacturing Competitiveness Index published by Deloitte, India is expected to set its global mark by becoming the fifth largest manufacturing country in the world by the end of the year 2020. In addition, the Government of India has set an ambitious target of increasing the GDP share of manufacturing industry from its current stagnant 16% to 25% by 2025.