Impect of GST on Small and Mediun Enerprise: A Comparative Study

Abstract

Goods and Services Tax (GST) was launched on 1st of July 2017. It is an indirect tax applicable throughout India. Now single tax would be levied on all goods and services.Around 160 countries have implemented GST. GST will ensure a comprehensive tax base with minimum exemptions, which will help the industry.GST will help the economy to grow in more efficient manner by ameliorating the tax accumulation as it will disrupt all the tax barriers between states and integrate country via single tax rate. It will benefit the Indian economy in many ways- help in reducing the price for consumers, rate of tax will be uniform, reduce multiple taxes .GST will affect many sectors in positive or negative manner. GST, as per government estimates, will boost India's GDP by around 2 per cent.Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% and 18%. (https://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India), 2017). After GST implementation certain products prices will reduce like branded goods, hotels, personal hair products, soap etc. Few products price will increase like mobile bills, aerated drinks, internet, air tickets. Goods and Services Taxes would be collected in three ways:CGST: where the revenue will be collected by the central government, SGST: where the revenue will be collected by the state governments for intra-state sales, IGST: where the revenue will be collected by the central government for inter-state sales. This paper focuses on the benefits, challenges and impact of GST on Indian economy.