The IUP Journal of Accounting Research and Audit Practices:
Goods and Services Tax (GST) in India: Towards Sustainable Economic Growth

Article Details
Pub. Date : Jan, 2019
Product Name : The IUP Journal of Accounting Research and Audit Practices
Product Type : Article
Product Code : IJARAP11901
Author Name : Divya Verma Gakhar
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 08



Goods and Services Tax (GST) has been newly introduced in India. Not only will GST help India to adjust with the global taxation system, but it will also help the Government of India to increase its Tax to GDP ratio. The main objective of the study is to understand the GST launched by the government and to analyze its impact on the financial performance of the companies. The data for four industrial sectors (two industrial goods and two consumer goods) has been taken, namely, cement industry, steel industry, automobile sector and communication sector. A total of 78 companies were taken as the sample and quarterly results related to various financial parameters such as net sales, total expenses, net profit, earnings per share, price-earnings ratio and turnover were collected from the Prowess database. The data was collected for two quarters before and after the implementation of GST on July 1, 2017, so that the impact of GST implementation could be studied across sectors on various performance parameters. The analysis shows that introduction of GST has brought in a positive change in the performance of all sectors selected for this study.


Tax is a major source of income to the government. Governments levy taxes in two forms which are direct taxes and indirect taxes. Direct taxes are levied directly on the income of people and are progressive in nature, while indirect taxes are levied on the goods and services (i.e., on the consumption of the people) and are regressive in nature. The Government of India has recently upgraded its indirect tax regime by introducing “Goods and Services Tax (GST)” on July 1, 2017 by implementing Constitution (101st Amendment) Act, 2016. The GST has come as a great reform in the taxation structure of India as it has introduced destination-based taxation system, wherein the taxes are levied on the consumption of goods and services.


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