GST and its Far-Reaching Impact on India's Financial Sector:  A Descriptive Study

Nandan P

GST and its Far-Reaching Impact on India's Financial Sector: A Descriptive Study

Authors: Nandan P

Unique Paper ID: 167992
Volume: 4
Issue: 7
PageNo: 485-490

Keywords: GST Indirect Tax India Direct Tax.

Abstract:
Tax is an essential aspect of every individual’s life in this world. Every human being is affected by it. During ancient civilization, the king used to collect revenue from citizens of his kingdom in the form of cash and kindness. No one is left out from the payment of tax of his kingdom. Merchants and traders from outside used to trade after rewarding the king with valuables. King, in return, was taking welfare activities from the funds collected in the form of tax. The traces of taxation are found in Kautily’s arthshatra. Over the years, the global taxation landscape has undergone significant changes. Most countries have restructured their tax systems to be more people-friendly, resource-driven, and easy to comply with, in order to mitigate tax evasion and avoidance. The pioneering move was made by France, which introduced the concept of VAT or GST, marking a significant milestone in the history of taxation. Currently, most countries, including India, follow a regressive taxation structure. In advanced countries like America, France, Germany, etc., the proportion of tax collection, Direct, and Indirect, is 70:30. In India, this ratio is reversed, standing at 30:70. The former taxation structure benefits society as a whole in terms of providing goods and services at an affordable cost, whereas the latter is quite the opposite. It is a quintessential taxation structure for tax evasion, tax avoidance, and non–adherence to compliance. Today, In India, many traders and industrialists have bills for their sales without TIN & TAN, respectively. Quintessential India has the same old taxation structure, full of cascading effects, jugglery in filing, many loopholes in the collection, and increasing corruption among tax officers, ultimately burdening the common man. With its potential to eliminate tax evasion, avoidance, and non-compliance, GST offers a promising future for India's taxation system. This paper provides a comprehensive view of the pre-GST taxation structure, highlighting its limitations in addressing economic challenges. It also explores the post-GST structure, which promises benefits for manufacturers, the common man, and the economy as a whole, instilling hope for a more transparent and efficient tax regime.

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Cite This Article

ISSN: 2349-6002
Volume: 4
Issue: 7
PageNo: 485-490

GST and its Far-Reaching Impact on India's Financial Sector: A Descriptive Study

Available:https://ijirt.org/Article?manuscript=167992

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