GST and its implications

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GST was considered as Unifying factor for Indian tax system and hailed it as "Liberal Reform" after 1990 reforms. Over the years implementation of GST tested the efficiency of the policy and its success. It is also called as Indirect tax reform. Many taxes where subsumed under GST. They are

Under Central Taxes :

  • Central Excise Duty ( CENVAT)
  • Service Tax
  • Additional Excise duties
  • Excise duty on manufactured goods ( Except on 5 hydrocarbons)
  • Additional duties of customes
  • Surcharges and Cess

Under State Taxes :

  • State VAT
  • Sales Tax
  • Purchase Tax
  • Entertainment Tax
  • Entry Tax
  • Taxes on lottery, betting
  • State surcharges and Cess
Taxes which are not subsumed :
  • Basic custom duties (These are levied during import of goods into India)
  • Export duty
  • Road and Passenger Tax
  • Toll Tax (Environment tax)
  • Professional Tax
  • Property Tax
  • Stamp Duty
  • Electricity Duty
  • Excise on liquor (states)
GST aims to provide input tax credit to entrepreneurs, so in theory it supposed to create a culture of self policing but in reality it was not. 

Due to global protectionist steps and slow economy the automobile sector suffered very badly. The GST was declines in service sector along with automobile.

GST is a destination tax and this was objected by many states which are manufacturing hubs of goods and services. Tamil Nadu staged a huge protest over it. Due to spirit of federalism many states came forward to implement GST with necesary safety nets (compensation cess).  

Many states suffered huge revenue loss and only states like Andhra Pradesh and North-East states witnessed the revenue generation. In 2019 this revenue losses multiplied many more time and became great challenge to nation economy. States which witnessed revenue collection namely Punjab, Himachal Pradesh, Goa, J & K, Chattisgarh, Odisha, Bihar, Gujarat. and Delhi. 







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