The Impact on Goods and Service Tax on Indian Economy

Abstract

The introduction of the Goods and Services Tax (GST) in India on 1st July 2017 marked a significant milestone in the country’s economic reform. Enacted through the 101st Constitutional Amendment Act, GST unified a fragmented indirect tax system into a comprehensive, destination-based tax structure. This reform aimed to simplify compliance, eliminate cascading effects, and create a common national market. The study highlights the historical background of GST, its dual structure of CGST, SGST, and IGST, and sector-specific exemptions. The research also examines the advantages of GST, such as enhanced tax compliance, increased government revenue, reduced logistical costs, and greater efficiency in trade and industry. Despite initial challenges like inflationary pressures and transitional hurdles, GST has largely been a progressive reform contributing to economic integration, competitiveness, and growth. The findings suggest that while GST implementation has been complex, its long-term impact is expected to foster transparency, efficiency, and sustainable development of the Indian economy.