Assessment and Impact of Existing Indirect Tax to Goods and Service Tax in India

Abstract

This study mainly considers about the broad regime for indirect taxation and it is overall system change to the proposed Goods and Service Tax system. The existing Indirect Tax acted as different types of taxation and levy. Current Indirect Taxation tends to create more cascading effects and tax burden for entire investors and final consumers. It includes as such as National Excise Tax, Extra Excise Taxes, Service Taxes, and Customs duty. Apart from these Sales Taxes, Central Sales Taxes, Entertainment Taxes, Entry Taxes, Luxury Taxes, Lottery, Betting and gambling Taxes. This type of central level and state level cascading taxation will increase the commodity price and also reduces productivity. Developed country does not use this system of tax levy. While introducing Goods and Service Tax, the commodity price will be centralized in all over the country so as beneficial for the final consumer and investors. But the GST tax slap rates depends upon commodity, particularly the manufacturing sector (Textile industry) and service sector (Restaurants) has been chosen and the existing Indirect Taxation and proposed GST system was computed of both sectors that has resulted in the service sector showing negative impact on the entire role of the business transaction and the manufacturing sector has positive impact shown only for the intermediary investors and the final consumers.