From Inception to Implementation: Evaluating the Impact of Goods and Service Tax on Indian E-Commerce Industry – A Critical Comment

From Inception to Implementation: Evaluating the Impact of Goods and Service Tax on Indian E-Commerce Industry – A Critical Comment

Garima (Banaras Hindu University, India)
Copyright: © 2018 |Pages: 19
DOI: 10.4018/978-1-5225-3787-8.ch008

Abstract

Goods and service tax (GST) is a partially centralized and unified indirect taxation system on goods and services, which will sculpt India as a one common market place. GST on one side is being regarded as a paradigm shift in Indian taxation system, as it will comprehend all the indirect taxes levied on manufacturing, sale, and consumption of goods and services across pan India while on the other side there is lot of commotion over its implementation as it is generally perceived that it will bring no benefit for the country as a whole and rather will create more ambiguity cross state and center. Taking cognizance of the shift in the Indian taxation structure and emergence of the GST, the present chapter addresses this dilemma and contradictions by commenting on the various aspects and impacts of GST, specifically on the Indian e-commerce industry.
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2. Literature Review

Implementation of GST had been denunciated as well as endorsed by different researchers. The different insights about the GST as submitted by various researchers has been summarised in the literature review below-

Vasanthagopal (2011) while discussing the impact of GST on various sectors of the economy endorsed GST as a big leap and a new stimulus for bringing economic reform in India. Garg (2014) explored the impact and GST on Indian Tax scenario and concluded that it will strengthen out free market economy. Kumar (2014) discussed the silent features of GST and endorsed the progressive impact of GST on the taxation structure prevailing in India before the implementation of GST. The author further appraise GST for the development of common national market in India. Similarly, Parkhi (n.d)through his exploratory research suggested that implementation of GST is a will bring major transformation in the Indian economy and the government is well equipped for that which is a symptom of fast paced economy.

However, Ahmed and Poddar (2009), stated that the benefits of GST are critically dependent on rational design of GST. Similarly, Mawuli (2014) criticized GST on the basis of its impact on low-income countries and does not provide broad based growth to poor countries. The author further suggested that the rate of GST should be less than 10% for developing economies.

In India very few scholarly studies have been published so far with regards to e commerce sectors and impact of GST (most of the studies were found in the form of reports). A study conducted by IAMA (2016) endorsed GST for being a unified tax across India. However, the report strongly recommends elimination or availability of single standard waybills and transit form to facilitate the ease of doing business across India A study paper drafted by ICAI (2017) provides detailed information of provisions relating to E-Commerce transactions under GST rule and regulatory guidelines for foreign direct investment on e-commerce.

All the above researches confronts that there is a need to trace the inception, current status of the Indian economy and its taxation structure along with newly implemented GST in order to have better understanding of GST. Further, there has been little research done so far to explore mechanism for levying GST on inter, intra state level, its aggregate impact, and major challenges that GST will bring for e commerce industry. Hence, these lacunas reported through literature reviews compel researcher to ponder over them, and in the light of the above mentioned gap, objectives of the study have been drafted.

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3. Objectives Of The Study

On the basis of the gap identified through the literature review, the following objectives has been

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