GST and Service Sector in India

Abstract

The Goods and Services Tax (GST) is a landmark step taken by Government of India to boost the growth of Indian economy and to introduce a more effective Tax regime.GST is a unified tax structure that was introduced by India on July 2017.The new regime has accompanied a significant changes in taxation levels and rules associated with it. The main focus of the present paper is to analyse the GST impacts on Service sector in India-both positive and negative effect. Present study is based on secondary data taken by various journals, reports and other sources. If we see the positive side of GST   on service   sector, GST is likely to put an end to the double taxation of services. For companies like profit books, that sell online software, it was not clear whether to apply VAT or service tax on the product. In GST regime there is a clear distinction between products and services which will remove the confusion for service sector. The cost of inputs is likely to drop. Inputs taxation like vat, excise duty, and the likes will no longer be an issue to deal with .There are also the downside of this system of taxation like-Lack of centralised registration, increased cost of services to end customers, the burden of public education etc. If we try to conclude we can say that GST is a great move that will push the economy even further. There will be some challenges, but it is a great thing to have a single taxation system for the service providers. For service sector GST system has definitely increased the compliance burden, but things will be much smoother once the issues are addressed.