IMPACT OF GOODS AND SERVICE TAX (GST) ON MANUFACTURING SECTOR

Abstract

India is emerging as the one of the growing economies in the world. India is currently Asia’s third largest economy by GDP. The share of services sector is 57 per cent (in 2013), followed by industrial sector at 25 per cent, and agriculture sector at 18 per cent. Industrial sector is generally accepted as the vibrant and leading sector in an economy that enables economic development by utilizing the deposited resources, fulfilling the needs of the society, augmenting international trade and laying an effective path to reach the sustainable development. The Government of Indian recognizes the consequence of the manufacturing sector in the country’s economic growth and development. The government also understands that becoming a manufacturing hub will have to need numerous strategic reforms to make simpler manufacturing in India. Make in India and the implementation of the GST is one of the proposed reforms thus leading to manufacturing synergy in India. The GST has already been introduced in nearly 160 countries of the world and France was the first to introduce GST in the year 1954. The journey of introduction of GST in India has been long and was a culmination of the efforts of many political leaders and officers of the Centre and State Governments. The 101st Amendment of constitution empowers the centre and state to levy and collect the GST at uniform rate except Alcoholic liquor for human consumption. GST as a historic tax reform is expected transform the indirect taxation in India came into effect from 1st July, 2017. The impact of GST on manufacturing sector is to be positive, on the other hand, India’s manufacturing performance has been uninspiring. Therefore this paper made an attempt to assess the impact of GST on manufacturing sector.