The document provides a comparative study of the Goods and Services Tax (GST) system and the previous Value Added Tax (VAT) system in India over three consecutive terms, with a focus on the pre- and post-implementation of GST. It analyzes the impact of GST on businesses and the economy through surveys of industries. Some key findings are that over half of respondents reported decreased revenue after GST adoption, and the system was seen as less transparent than the previous VAT system. The implementation of GST in 2017 aimed to simplify taxation and boost economic growth by widening the tax base.

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International Journal of Management (IJM)
Volume 12, Issue 1, January 2021, pp. 1063-1069 Article ID: IJM_12_01_092
Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=12&IType=1
Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
DOI: 10.34218/IJM.12.1.2021.092
© IAEME Publication Scopus Indexed
A COMPARATIVE STUDY OF GST & VAT IN
THREE CONSECUTIVE TERMS: WITH
SPECIAL REFERENCE TO PRE & POST GST
IMPLEMENTATION
Anju Singh
Research Scholar, Mahatma Gandhi Kashi Vidyapith, Varanasi, India
ABSTRACT
In Indian economic history, the GST is the biggest tax reform. As government
revenues increase in terms of increased tax compliance and reduced tax evasion, the
spillover outcomes of GST are immense, enabling tighter control and encouraging more
precise monitoring than the conventional tax system. Increased government tax
collections will provide scope for increased public spending in numerous social and
physical development programmes, providing additional scope for the generation of
jobs. Despite GST's tremendous potential for a higher growth trajectory of the Indian
economy, however, numerous companies, sectors and exporters are currently facing
enormous problems because of the same. “More than half of the respondents revealed
that their post-GST adoption of company revenue has decreased, according to the
report. With respect to the overall accountability situation within the GST network, the
majority of respondents suggested that the system is less transparent. The process for
compensation and the availability of laws and regulations was less straightforward. In
the global consumer/indirect tax reforms, VAT/GST was a major breakthrough. GST is
a value added tax which applies to the use of goods and services. Different indirect
taxes, such as CST, VAT, service tax, etc., were levied prior to GST. All these taxes were
clubbed under one GST head, as one nation with unified tax system.” The 122nd Indian
Constitution amendment approved GST on 1 July 2017. The main reason for
incorporation is expanding the tax base by reducing the tax rate pressure. In India, GST
is categorised at two levels:-state (SGST) and federal taxation combination (CGST).
Key words: GST, Vat, Constitution, Government Tax, Post-GST Adoption
Cite this Article: Anju Singh, A Comparative Study of GST & VAT in Three
Consecutive Terms: With Special Reference to Pre & Post GST Implementation,
International Journal of Management, 12(1), 2021, pp. 1063-1069.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=12&IType=1

2. A Comparative Study of GST & VAT in Three Consecutive Terms: With Special Reference to Pre &
Post GST Implementation
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1. INTRODUCTION
By bringing GST to the country, India took a big initiative. It is the biggest tax overhaul that
has arisen in recent decades. The substitution of VAT over GST has evidently received the
attention of several scholars. To explore GST's impact on the Indian economy, they adopted
various methodologies. The paper explain the tax rate on Indian traded goods and services with
respect to agricultural and industrial products both domestically and globally. To assess GST's
effects, they estimated domestic and foreign obstacles. The paper also discusses the relationship
between the old and the newly acquired tax system. They analysed the effects of tax reform
through a trade model by examining imports and exports[4]. The indirect tax structure in India's
competitive economy is followed by tax cuts imposed separately by the central and state
governments. The aim of GST is to combine all indirect taxes under one flag to form a seamless
national economy. Their study also states that GST will allow the economy to be nurtured by
increasing tax collection in a more stable and productive way, as it would interrupt all taxes.
2. GST (GOODS AND SERVICE TAX)
In terms of the supply of goods and services, GST serves as a single tax structure eliminating
the old tax structure in order to make our tax system transparent and comprehensible at all
levels. GST is entrusted with fixing edges in all respects in the previous phases. Over the span
of last three decades, the country has witnessed a major tax reform, another progress initiative
that could create a sting peak through this process. As a stable, emerging economy, India should
balance direct and indirect taxes equally and impartially. However, direct tax on this undue
dependency will be autocratic at the same time. The tax can be a similar public degree
obligation, which can be a sharp economic asceticism for ordinary people. The objective here
is to seek control over organisational gains by the approved scheme, thereby increasing
financial gains in India. The essence and intent of GST tax could generally be described as part
of tax reform, a well-organized, combined tax mechanism in a country's development. In the
2007-2008 Union budget Finance Minister suggested that India revolve its tax system at state
level. It also suggested to set April 1, 2011 as the consumer duty incentive deadline. Nearly all
GST countries have goods and services to be applied internationally, which is the basis of sales
tax. The first step of taxation is to gradually link the tax rate. Excise tax, being high, GST is
introduced to sell goods and services nationally, allowing India to expand and become a world-
class economy.
3. INDIAN ECONOMY PRIOR TO GST INTRODUCTION
Prior to the introduction of GST Producers, wholesalers and retailers placed 12.5 percent VAT
on customers, and this exerted burden on buyers It clearly shows how consumers had to practice
the multiple tax scheme and commit to paying taxes. The above three speculators generated
their own margin for these products and created problem for customers at all levels. The tax
essentially inflated the prices of goods and services.
4. IMPACT OF GST ON BUSINESS, INDUSTRY AND EXPORTERS
We conducted an in-depth survey to understand ground level realities about GST's impact on
various markets, businesses, and exporters across India. The interview was administered by
structured questionnaire. Nevertheless, attempts were made to obtain other data that could be
of interest to GST's aftermath. 241 Industry and export partners were registered for sample size.
Clothing, textiles, medicines and pharmaceuticals, electronics (including household goods,
electrical equipment (including white goods), machine tools (including machines and parts),
vehicle components, clothing and leather goods, sugar, food processing, chemicals and plastics,
rubber and paper.

3. Anju Singh
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4.1. Composition of Industries/Firms in the Survey
Chart 1: Types of industries
Source: PHD research bureau
Figure 1
Research was conducted with companies/industries covering various sectors. The survey
revealed that most respondents come from other sectors, including utilities and professional
services (33%), followed by electronics (including consumer durables) (10%), electrical
equipment (including white goods) (10%), machine tools (including machines and parts) (10%),
rubber and plastic products (10%), chemicals (5 percent ).
5. ANALYSIS OF INDIA’S EXPORTS VERSUS EXPORTS BY OTHER
TOP COUNTRIES
Exports from India have risen from USD 260 billion in CY2018 to USD 295.8 billion in
CY2017. However, in the first half of 2017, India could not build on the initial growth
momentum due to GST teething problems and the after-effects of demonetization on businesses
throughout India, especially the MSME market. Comparatively, as seen in the table below,
South Korea, Indonesia and Malaysia reported resurgent and robust export growth figures.
Given China's export size, the rise of 8.7 percent also reveals an increased demand for Chinese
goods worldwide.
Table 1
Source: Ministry of Commerce and Industry; Value based on Calendar Year

4. A Comparative Study of GST & VAT in Three Consecutive Terms: With Special Reference to Pre &
Post GST Implementation
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India's share of world exports have grew from 1.6% in 2016 to 1.8% in 2017, while China's
share increased from 3.1% to 13.1% to 13.7%, while South Korea's share grew from 3.1% to
3.4%. During the same time, Indonesia's share rose to 1 percent from 0.9 percent. “Though
India's exports increased by 9.8 percent during 2017-18, the trade deficit expanded by 45
percent to USD 157 billion in 2017-18, compared to USD 108 billion in 2016-17.”. India should
have achieved growth of at least 20 percent on growing Advanced Economies exports.
Amazingly, in the last seven years, the pace of increase in the trade deficit has been remarkable.
Table 2
The volume of trade deficit has been consistently falling since 2012- 13, valuing at USD
190 billion in 2012-13. However, due to relatively higher growth in imports during 2017-18 the
value jumped exorbitantly.
6. INDIAN ECONOMY AFTER GST IMPLEMENTATION
Loksabha first enacted GST Products & Service Tax Act on 29/03/2017 and incorporated on
1/07/2017. Law took the lead and exchanged much of the proposed indirect taxes. Government
has applied GST (12%) + State GST in lieu of various taxes (12 %). The central excise duties,
extra excise duties, sales taxes and separate supplemental duties have been substituted for a
single levy. The economy has gained from GST implementation, excelerating the chances of
higher sales.
7. ROLE OF GST IN THE ECONOMIC GROWTH
In India, the fiscal reform began in the 1990s with the commencement of liberalization. New
fiscal policies started to reduce personal benefit tax rates in 1991. A new tax was introduced in
2000; it is the full federal and state value-added tax. The central government implemented the
GST tax system as a special tax form, that subsumes all indirect taxes in a single scheme. Is
The GST tax laws essentially terminates various taxes on assorted products, from the
manufacturing point till the point it reaches customers. GST's underlying concept is "One
Country One Tax."
8. GST ADVANTAGES OF INDIAN ECONOMICS
CST (Central Sales Tax) is excluded and does not have to compensate. Under the Central Sales
Tax (CST) input tax is omitted . The tax system is extended by adding goods and services, but
also remains transparent. That will lower products and services costs and thereby raise demand.
Many indirect taxes used in GST at the state and central level is under unified system.,
Introducing the nation with an unified taxation, GST is a blessing to the Indian economy and to
ordinary citizens

5. Anju Singh
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9. GST AND ECONOMIC DEVELOPMENT. GST AND ECONOMIC
GROWTH
The GST framework is based on the aim theory. The tax base would shift from manufacturing
to usage, which ensures that imports will be taxed and export tax relieved. Foreign exports can
be null and void. In the other side, foreign products, regardless of whether or not the
manufactured items are produced locally, may be subject to both CGST and SGST on import.
Furthermore, GST would equitably redistribute the tax burden between goods and services,
contributing to a qualitative shift throughout the tax structure. By broadening the tax base and
minimising deductions, it would lower the tax rate. The 13th Finance Commission forecasts the
effect of implementing GST to abolish both development and delivery taxes and to maintain
the final usage only. The prospects for jobs are also supposed to be improved. The introduction
of a robust GST would efficiently distribute development factors and improve GDP and exports.
It will increase economic well-being and return to the development factors, i.e. property, labour
and money. ”Outputs are projected to rise from industries like garment and ready-made
clothing; minerals other than steel, gasoline, gas and iron ore, organic heavy chemicals, food
and textile industrial equipment, beverages and miscellaneous goods. The areas where
production is projected to decrease include natural gas and crude oil; iron ore; coal tar products;
as well as non-ferrous metal industries.” A decrease in the tax effect on the goods and services
sold would enable manufacturers to market their products at a cheaper price, which would result
in higher demand. A more fair taxation structure will contribute to less business economy
instability and a more effective allocation of capital in the industry.
10. LITERATURE REVIEW
Kumar (2018), observed that GST has streamlined India's tax system and eliminated the
cascading impact of numerous taxes, which gradually has decreased final burden on customer’s
end. “The study also identifies the problems that global importers face as they export from India
(like delayed delivery, quality etc.). Manoj (2019) says GST would provide an efficient tax
system for economic development and GDP growth. He further claimed that GST would affect
all sectors such as construction, textiles, carpets, telecommunications, vehicles, etc, but that
introducing GST will be best for manufacturing compared with the service sector.” Dr. R.
Vasanthagopal (2011) argued that transitioning from the present riddle of the indirect tax
system to a smooth GST framework is a defining move towards booming the Indian economy,
with GST being embraced by more countries worldwide. Nitin Kumar (2014) concluded that
the introduction of GST will suppress economic distortions in India from existing indirect taxes
and planned to have a rational and impartial tax system. Shanti &Murty (2019) carried out an
analysis and noticed that GST has a very strong effect on customer understanding and purchase
behaviour. Ehtisham Ahmed and SatyaPoddar (2009) studied and found GST to have an easy,
simpler and more straightforward indirect tax system that increases Indian economy
productivity. The advantages of applying GST rely, however, on a rational GST architecture.
Carpet Export Promotion Council (CPEC) reports that India exports to more than 70 nations,
led by Europe with the largest share of exports to the US (48.84%), 27.25% and 23.91% to the
rest of the world. According to one of the articles published in TOI's Handmade Carpet Industry,
the CEPC president urged the government to provide substantial relief to the carpet industry by
raising the duty downside from 12% to 5%. Chaurasia et al. (2016) in their study concluded
that GST would increase India's GDP and lead to economic growth. Kuruvilla, Hari Kumar &
Alex (2018) clarified the GST effect in the jewellery industry and concluded that after
introduction of the GST, gems and jewellery prices would become competitive. They also
claimed that a streamlined input tax credit process for products and services would render a
more effective and straightforward system.

6. A Comparative Study of GST & VAT in Three Consecutive Terms: With Special Reference to Pre &
Post GST Implementation
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11. EFFECTS OF VALUE ADDED TAXES ON SOCIETY
The implementation of value added tax is an essential component of the tax reforms that have
been under way since liberalisation. VAT is a multidimensional taxation framework with value
added tax levied at - point of the supply chain transaction. After independence, India started to
grow rapidly to eliminate the severe poverty in the supply chain. After independence, India
started to quickly grow to eliminate the intense economic hardship. To achieve maximum
development and to achieve rapid economic change from underdeveloped to developed
countries, the state was granted an interventionist position. This allowed the Government to
raise and leverage surplus funds for swift growth, including direct and indirect taxes, where
they were available. In India, corporate tax, corporate tax and property tax are primary tax
examples, while tariffs, excise tax and sales taxes are indirect tax examples. Many considered
too poor to pay direct tax because their income is inadequate to pay taxes. The theory is that at
each point of production and distribution, value addition should be provided to government,
and some of it should be given to social development. The middle and lower classes who are
not informed of these accounting methods have trouble determining prices for a product or
service. A dual procedure for the management of invoices, bills by the vendor and the consumer
must be maintained in order to maintain a better value added tax regime in India. "VAT is
already levied differentially on food and drink; Sheron, a Commons Health Committee
Appointed advisor on alcohol earlier this year."If this policy was applied to alcohol but was
reversed – say, for example, reducing the VAT for on-sales from 20 to 12 percent – it would be
possible to increase the rate of duty to compensate for this without increasing the price of
alcohol in pubs."
12. CONCLUSION AND FUTURE SCOPE
GST institution can be considered a landmark achievement in the Indian taxation system. It also
combined a wide variety of federal-state taxes. Future application of GST is expected to attract
international companies and encourage investment and exports. From the above discussion can
be concluded: 'A single type of tax called GST or goods/services tax is applied throughout the
country and is substituted for a variety of other indirect taxes, such as VAT, services tax etc.
Compared to earlier taxation, it is a simpler tax system. The GST would not significantly raise
the tax burden and in certain instances the cumulative tax burden will reduce when the
cascading impact of combining a number of tax structures with one tax structure is eliminated.
The greatest profit is the rise in competition and the simplicity of which GST carries out
business. The overall effect on the economy is projected to scale in an Consumers will benefit
from the same rate as the tax burden on products and services will decline by 25% -30% from
the present stage. Moreover, the new tax system will be easy to track and run, relatively
increasing the competitiveness of Indian products and services in domestic and international
markets. While this would drive economic growth in the coming years, value-added tax would
change the structure of trade, medium-level trading would threaten businesses with lower
marketing. The current central sales tax provision and value-added tax cannot be combined.
The Direct Selling model will gain momentum after abolishing central sales tax and the need
for warehouse will decrease or disappear in all states. In the last two decades, value added tax
in India has been imposed in adjusted forms. However, in its original shape, value added tax is
yet to be imposed in India, at the central or national stage.

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