Awareness of Implementation of Goods and Services Tax (GST)

Abstract:
Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By
amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage
taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. Some of
them gave positive responds and some others gave negative feedbacks as the implementation has resulted in
higher prices for goods and services and thus this tax may cause burden to people. Therefore, this study was
carried out to identify student’s awareness and knowledge on the implementation of Goods and Service Tax
(GST). The sample comprised of 60 students ranging from different years of study. The sample selection was
made randomly. It is an issue if people are still unaware or confuse with the tax system of GST and become
worst when people ignore and boycott not to pay the tax. GST is a popular issue that is being discussed by
people day to day, it is necessary to know whether the students are aware of the government’s plan and do they
have knowledge on this issue. It is concluded that providing adequate and relevant fundamental information is
necessary to make them better understand the general principle of GST by organizing seminar, talk, training,
course and forum in order to increase awareness and knowledge and also conform to regulation. No doubt that
GST will give India a world class tax system by grabbing different treatment to manufacturing and service
sector

Key words: GST. Tax, Awareness and Knowledge.

I. INTRODUCTION

India has witnessed substantial reforms in indirect taxes over the past two decades with the replacement of State
sales taxes by Value Added Tax (VAT) in 2005 marking a watershed in this regard. Prior to VAT
implementation, the tax structure was considered problematic primarily due to the “cascading effect of taxes”
whereby an item is taxed more than once from the production to the final retail sales stage. Exporters were also
becoming less competitive in the international market due to the huge input costs involved (tax burden of a
commodity increases manifold as it is taxed repeatedly) through the earlier sales tax mode – reflected in higher
prices of products as compared to global competitors. To avoid this kind of a tax structure, VAT was introduced
so that taxes are paid on the “value added portion” by each producer and the hurdles of the cascading effect are
done away with. But shortcomings were also noticed in the VAT structure and efforts were made to further
rationalize the system. For instance, a number of Central taxes like customs duty, surcharge were not included in
Central Value Added Tax (CENVAT) while indirect taxes at the State level such as entertainment and luxury
taxes were left out of the purview of VAT. The major problem with VAT is that CENVAT on certain
commodities remains included in the value of goods to be taxed under State VAT. Thus, the same set of goods is
taxed repeatedly – once by the Centre and then by the State. Moreover, since VAT is applied on goods only (tax
on services in India is a complicated issue due to various exemptions and definitional problems) Introduction of
GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a

large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would
mitigate the ill effects of cascading and pave the way for a common national market. For the consumers, the
biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at
25%-30%. Introduction of GST would also make our products competitive in the domestic and international
markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the
Centre and the States due to widening of the tax base, increase in trade volumes and improved tax compliance.
Last but not the least, this tax, because of its transparent character, would be easier to administer.

WAY FORWARD FOR IMPLEMENTATION OF GST

 1) The 122nd amendment bill to be passed by upper house with 2/3rd majority and then will be ratified by
at least 50% state legislatures and will be followed by assent of president.
2) After the bill has been passed, GSTC (GST Council) to be established.
 3) GSTC to advocate GST law and procedure.
 4) GST law to be introduced in parliament.
 5) GSTN (GST Network) a section- 25 company established to design IT infrastructure of GST
BOTTLENECKS IN THE IMPLEMENTATION OF GST
Though the Government wants the GST Bill to be implemented by April 2016, there are certain bottlenecks
which need to be taken care of before that:

 What preparations are needed at the level of Central and State Governments for implementing the GST?
 Whether the Government machinery is efficient enough for such an enormous change?
 Whether the tax-payers are ready for such a change?
 What will be the impact on the Government’s revenue?
 How will the manufacturers, traders and ultimate consumers be affected?
 Will GST help the small entrepreneurs and small traders?

II. STATUS OF IMPLEMENTATION OF GST

To be fully viable by law in all the States, the GST Bill needs to be passed by a two-thirds majority in both
Houses of Parliament and by the legislatures of half of the 29 States. In December 2014, Finance Minister
ArunJaitley introduced the constitutional amendment Bill of the GST in the LokSabha. He announced that the
GST would be a major reform in India’s taxation system since 1947, which would reduce transaction costs for
business and boost the economy. Earlier, the Bill was rejected by a few States saying that it does not include the
issues of compensation, entry tax and the tax on petroleum products. Jaitley while introducing the Bill said that
all efforts have been taken to make sure that the States do not suffer any loss of revenue with the implementation
of the GST. The States will receive Rs 11,000 crore this fiscal year so that it would compensate the losses
suffered by them for decline in Central sales tax (CST) and subsequently financial assistance would be provided
for a five- year period. All said and done, the GST Bill which was conceived way back in the year 2000 has not
seen the light of the day as yet. If everything goes well, most likely the Bill will be legislated by April 2016.
According to a study by the National Council of Applied Economic Research (NCAER), full implementation of
the GST could expand India’s growth of gross domestic product by 0.9-1.7 percentage points. By removing the
system of multiple Central and State taxes, the GST can help in reducing taxation and filing costs and expand
business profitability, thereby attracting investments and promoting GDP growth. Simplification of tax norms can
help in improving tax compliance and increasing tax revenues.

HOW GST WORKS?

GST is collected and paid at all stages of the supply chain. All businesses pay GST when they buy supplies,
assets or services for running their business. GST registrants will charge and collect GST on taxable goods and
services that they provide (taxable supplies). The GST paid on their purchases (input tax credit) will be set off
from the GST they charged and collected (output tax). If the output tax exceeds the input tax, the difference is to
be remitted to the customs authorities. On the other hand, if output tax is less than the input tax, a refund will be
given by the Customs authorities. The end consumer is borne to pay the ultimate GST

WHY INDIA APPLYING GST

In India economy the service sector contributes 0ver 55%. Separate taxation of goods and services is neither
viable nor desirable. Value added in manufacture and sale of goods require inputs of both- goods and services
and vice versa, which is often not separable. Introduction of a GST to replace the existing multiple tax structures
of Centre and State taxes is not only desirable but imperative in the emerging economic environment.
Increasingly, services are used or consumed in production and distribution of goods and vice versa. Separate
taxation of goods and services often requires splitting of transaction values into value of goods and services for
taxation, which leads to greater complexities, administration and compliances costs. Integration of various taxes
into a GST system would make it possible to give full credit for inputs taxes collected. GST, being a destination-
based consumption tax based on VAT principle, would also greatly help in removing economic distortions and
will help in development of a common national market.

REVIEW OF LITERATURE:

 Ehtisham Ahmed and SatyaPoddar (2009) have found that GST introduction will provide simplier and
transparent tax system with increase in output and productivity of economy in India. But the benefits of
GST are critically dependent on rational design of GST1.
 Pinki, et.al. (2014) have concluded that the new NDA government in India is positive towards
implementation of GST and it is beneficial for central government, state government and as well as for
consumers in long run if its implementation is backed by strong IT infrastructure.
 AgogoMawuli (2014) has found that GST is not good for low-income countries and does not provide broad
based growth to poor countries. If still these countries want to implement GST then the rate of GST should
be less than 10% for growth.
 Nurulhasnishaari, Alizah Ali, and Noraini Ismail (2015), have concluded that to provide adequate and
relevant fundamental information is necessary to make them better understand the general principle of GST
by organizing seminar, talk, training, course and forum in order to increase awareness and knowledge and
also conform to regulation.

III. STATEMENT OF THE PROBLEM

GST is deemed as one of the steps in making India as a country which has a high income tax system,
comprehensive, efficient, transparent and business-friendly. It is also considered the world's best tax system
based on the implementation of the country which has implemented the GST.GST has just being applied in
India. The government and its crew are still in their way to spread out the information of GST in order to
combat confusion among people. Sales and contracts are made almost every day and some of these transactions
required people to pay the GST. It is an issue if people are still unaware or confuse with the tax system of GST
and become worst when people ignore and boycott not to pay the tax. GST is a popular issue that is being
discussed by people day to day, it is necessary to know whether the students are aware of the government’s plan
and do they have knowledge on this issue. Therefore this study makes an attempt to analyze the College
Student’s Awareness and Knowledge on the Implementation of Goods and Services Tax (GST) .

OBJECTIVES OF THE STUDY

 To study about the socio- economic and demographic profile of the respondents

 To identify the level of awareness of the students implementation of GST

 To find out level of knowledge of the students on issues of GST
 To give suitable suggestions on the basis of the findings of the study.

HYPOTHESIS OF THE STUDY

 There is no association between socio-economic profile of the respondents such as age, gender, studied
course, education status, occupational status and level of knowledge of the students on issue of GST

Source: Primary data

The data were collected and subsequently analyzed descriptively to obtain the frequency and percentage and chi
square test using the software SPSS.

METHODOLOGY
The study is based on both Primary and Secondary data. Primary data is collected by Interview Schedule and the
secondary data has been collected from books, journals, and websites and so on.

TOOLS USED FOR ANALYSIS

The data are analyzed with the help of SPSS. The following statistical tools are used.
 Percentage
 Chi-square test
2. Socio-Economic profile of the respondents

Source: Primary data: While analyzing the personal profile, it is evident that, majority of the respondents
(66.67%) are male. In relation to Age wise classification, most of the respondents (78.0%) are having the age of
22 to 24 years. Regarding the studied course of the respondents, majority of the respondents (42.0%) have been
studying M.com. Under nature of courses, most (73.0%) of the respondents have been studied Government aided
courses. About the Income wise classification, most of the respondents (87.0%) are having Rs. 10,001 to 15,000
as their income. Majority of the respondents (52%) are professional.

ANALYSIS OF STUDENTS AWARENESS ON THE IMPLEMENTATION OF GST

In order to identify the awareness of College Students and Knowledge on the Implementation of Goods and
Services Tax (GST), the researchers has collected and presented data in the Table 3

Table 3
S. Awareness No of
No Respondents Percentage
1 Aware 108 90.0
2 Not aware 12 10.0
Total 120 100.0

Table 3 shows that 90% of the respondents were aware of the implementation of GST April this year and
remained 10% of the respondents have not aware of this new implementation. This shows that the respondents
have their concerns of government’s plan to implement GST.
 Table. 4. Students’ Knowledge on the issue of GST
S. No Item Strong Agree Neutral Dis Strongl Total
ly agre y
Agree e Disagr
ee
1 GST aims to make the tax - 84 24 - - 108
system more efficient, (70%) (20%)
comprehensive and
transparent.
2 GST will generate and 28 80 - - - 108
increase (23.3%) (66.7%)
revenue for the country.
3 GST can overcome the sale - 42 42 24 - 108
and (35%) (35%) (20%)
services tax which was
introduced earlier.
4 GST will not burden people. - 42 42 - 24 108
(35%) (35%) (20%)
5 GST protects the interests of 28 42 38 - - 108
low (23.3%) (35%) (31.7%)
income earners.
6 Do not understand how - 94 14 - - 108
GST (78.3%) (11.7%)
would be implemented.
7 GST will result in higher 28 14 42 24 - 108
prices for goods and (23.3%) (11.7%) (35%) (20%)
services.
8 GST is the best tax system 56 52 - - - 108
adopted by many countries (46.67%) (43.33)
around
the world.
9 No GST is imposed on 28 42 14 24 - 108
exported (23.3%) (35%) (11.7%) (20%)
goods and services.

Source: Computed Data

In relation to the Eighth statement, 46.67% of the respondents strongly disagree that the GST is the best tax
system adopted by many countries around the world and 78.33% of the respondents agree the statement that do
not understand how GST would be implemented. 35 % of the respondent’s neutral the statement that GST will
not burden people. . 20 % of the respondents disagree the statement that No GST is imposed on exported goods
and services, GST will result in higher prices for goods and services and GST can overcome the sale and services
tax which was introduced earlier. 20 % of the respondents strongly disagree the statement that GST will not
burden people.

LEVEL OF STUDENT’S KNOWLEDGE ON THE ISSUE OF GST

The respondent’s level of student’s knowledge on the issue of GST has been determined by 9 statements. The
level of student’s knowledge on the issue of GST has been determined by the score values calculated from 9
statements by adopting scaling techniques. The responses observed for each statement in the schedule has been
scored. To secure the total customer satisfaction score for the respondents, five points are given for “strongly
agree”, four points are “Agree”, three points for “Neutral”, two points for “Disagree”, and one point for
“Strongly disagree” responses. The level of student’s knowledge on the issue of GST has been derived from the
mean (𝑋 ) 𝑎𝑛𝑑 𝜎 valuesof the 60 respondents. The calculated values of Mean and S.D are 3.3685 and 1.2753
respectively. If the score values are greater than X+𝑆. 𝐷,It has been taken as high level of student’s knowledge on
the issue of GST whereas, if the score values are less than X – S.D, it has been taken as low low level of
student’s knowledge on the issue of GST. However the difference between than (X+S.D) and (X−S.D) has

lassified as medium level of student’s knowledge on the issue of GST.

Therefore
X+ S.D = 3.3685+1.2753= 4.6438
X− S.D = 3.3685−1.2753= 2.0932 (X+ S.D) to (X− S.D) = 2.09 to 4.64

The level of student’s knowledge on the issue of GST is measured in the three levels, High, Medium and Low
level. The respondents who have scored 4.64 and above are come under high level. The respondents whose
scores fall between 2.09 to
4.64 are medium level and those whose score is 2.09 and below have low level of student’s knowledge on the
issue of GST. Table 5 shows that the level of students’ knowledge on the issue of GST.

Table. 5. Level of student’s knowledge on the issue of GST

S. No Particulars No. of. Percentage

Respondent
s
1 High 56 46.67
2 Low 52 43.33
3 Medium 12 10.00
Total 60 100

From Table 5 it has been observed that out of 120 respondents, 56 (46.67%) students have high level of
knowledge on the issue of GST, maximum of 52 (43.33%) students have medium level of knowledge on the
issue of GST and 12 respondents (10 %) of them who come under the category of low level students of
knowledge on the issue of GST.
CHI- SQUARE TEST
Chi- square test is applied to measure the relationship between two variables. The Chi-square test for
independence, also called Pearson’s chi-square test or the chi-square test of association, is used to discover the
relationship between two categorical variables. The researcher has framed the following hypothesis “There is no
relationship between socio-economic profile of the respondents Such as age, gender, studied course, education
status, occupational status and level of knowledge on issue of GST” The Chi- square result is shown in table 6

Table. 6. Chi- square result

S. Particulars Pearson Result

No
Chi- square
Value
1 Age 0.000 Not
Significant
2 Gender 0.499 Significant
3 Studied Course 0.000 Not
Significant
4 Nature of 0.000 Not
Course Significant
5 Occupation 0.000 Not
Significant
6 Employment 0.000 Not
status of Significant
parents
Source: Computed Data

Note: The significant value of Chi square which is less than the acceptable level of 0.05 the null hypothesis is
rejected and more than the acceptable level hypothesis is accepted. From the Table shows that “There is no
relationship between socio-economic profile of the respondents Such as age, studied course, education status,
occupational status and level of knowledge on issue of GST” “There is a relationship between gender and their
level of knowledge on issue of GST”.

FINDINGS
 It is understood from the survey that majority of the respondents(60.0%) are male.
 It is found that most of the respondents (78.0%) are having the age of 24 to 26 years.
 It reveals that majority of the respondents (42.0%) has been studied M.com graduate.
 It declares that majority of the respondents (87.0%) comes under the category of incomes Rs. 10,001 to
15,000.
 It is clear that under nature of courses, most (73.0%) of the respondents are Government aided courses.
 It is indicated that Majority of the respondents (52%) are professional.
 It is revealed that Majority (90%) of the respondents were aware of the implementation of GST April this
 year.
 In order to test the relationship between Socio economic profile of the respondents and have their level of
students’ knowledge on the issue of GST It is concluded that “There is no relationship between socio-
economic profile of the respondents Such as age, studied course, education status, occupational status and
level of knowledge on issue of GST” “There is a relationship between gender and their level of knowledge
on issue of GST”.

SUGGESTIONS
The overall findings show that even though the students were aware of the government’s initiative to implement
Goods and Services Tax (GST) but they still have medium level in knowledge relation to this matter. This is
because most of the respondents chose to answer unsure when they were asked question related to GST issue. It
shows that the information provided by the government pertaining to GST is inadequate. Therefore, there is
also a need for the government to give and provide a comprehensive understanding of relevant GST.

IV. CONCLUSION

Students and young generation in fact, are elements or important assets in the country and will be a leader in the
future. They will continue to implement the national development program to achieve Vision 2020. This group
one of the factors contributing to the progress and development of the country. Providing adequate and relevant
fundamental information is necessary to make them better understand the general principle of GST by
organizing seminar, talk, training, course and forum in order to increase awareness and knowledge and also
conform to regulation. No doubt that GST will give India a world class tax system by grabbing different
treatment to manufacturing and service sector. But all this will be subject to its rational design and timely
implementation. There are various challenges in way of GST implementation as discussed above in paper. They
need more analytical research to resolve the battling interest of various stake holders and accomplish the
commitment for a cardinal reform of tax structure in India.
V. REFERENCE:

[1]. Nurulhasnishaari, Alizah Ali, and Noraini Ismail

(2015), “Students awareness and knowledge on the
implementation of Goods and Services Tax (GST) in
Malaysia”, International Accounting and business
conference 2015, IABC 2015

[2]. GirishGarg (2014), Basic Concepts and

Features of Good and Service Tax In India.
International Journal of scientific research and
management (IJSRM)|| Volume||2||Issue ||2||Pages
|| 542-549||2014||

[3]. Monika Sehrawat *1,

UpasanaDhanda(2015)GST in India: A Key Tax
Reform International Journal of Research –
Granthaalayah, Vol. 3, No. 12(2015): 133-141.

[4]. Kim-Hwa,L.,&Qi,O.P.(2013). Implementing

Goods and Services Tax in Malaysia.
Http://penanginstitute.org/gst/Goods ServicesTax-
20131008.pdf,(October)

[5]. WWW.Wikipedia.com

[6]. WWW.GST.in