A STUDY ON PUBLIC AWARENESS TOWARDS

GOODS AND SERVICES TAX

(AMENDMENT) BILL IN KOTTAYAM REGION

ABSTRACT

Goods and Service Tax GST is all set to be a game changer

for the Indian economy. The tax is expected to reduce the concept of
‘tax on tax’, increase the gross domestic product of the economy and
reduce prices. In India, there are different indirect taxes applied on
goods and services by central and state government. GST is intended
to include all these taxes into one tax with seamless ITC and charged
on both goods and services. For the introduction of GST, the
Government needs to get the Constitution Amendment Bill passed so
that the proposed objective of subsuming all taxes and allowing states
to tax subjects in Union list and vice versa is achieved. Without these
powers, it is not legally possible to move towards GST. Conceptually
GST is expected to have numerous benefits like reduction in
compliances in the long run since multiple taxes will be replaced with
one tax. It is expected to bring down prices and hence the inflation
since it will remove the impact of tax on tax and enable seamless
credit. It is expected to generate revenue for the country as the tax
base will increase as the GST rate will be somewhere around 27%
with both goods and services covered. It is also expected to make
exports from India competitive and India a preferred destination for
foreign investment since GST is a globally accepted tax. Unless the
issues relating to GST has been overcome, the GST would become a
bare wall without any scripts to describe in future.
INTRODUCTION

Mathematics has many applications, calculating tax

rates, goods rates are one of the application. Goods and Service Tax
(GST) is a new form of tax."Goods and Services Tax" would be a
comprehensive indirect tax on manufacture, sale and consumption of
goods and services throughout India, to replace taxes levied by central
and state governments. Goods and Services Tax would be levied and
collected at each stage of sale or purchase of goods or services based
on the input tax credit method. This method allows GST registered
businesses to claim tax credit to the value of GST they paid on
purchase of goods or services as part of their normal commercial
activity. Taxable goods and services are not distinguished from one
another and are taxed at a single rate in a supply chain till the goods
or services reach the consumer. Administrative responsibility would
generally rest with a single authority to levy tax on goods and
services.

NEED AND SIGNIFICANCE

A host of daily consumption items will become

cheaper while lifestyle products will see increase in the GST rate.
However, while the much-awaited GST regime finds itself one step
closer to reality (the proposed date for GST implementation is July 1,
2017), the speculations and complex terminology around this intricate
tax reform have left citizens worried about what it means for their
pockets.
Household items like sugar, tea, coffee will come under
processed food that are used daily and will attract 5 per cent GST.
Cereals which are currently subject to 5 per cent tax will be an exempt
in GST. While consumer products like tooth paste, hair oils and soaps
will attract 18 per cent instead of the existing 28 per cent. Consumer
durable such as air conditioners, refrigerators, furniture, wristwatches
and exercise equipment will attract 28 per cent bracket against 26 %
of the existing tax.
In the meantime, let’s understand if this were to get
implemented, how your spending pattern will change. Will you pay
more or less for goods and services than you do now?
There are many research projects regarding the perception
towards GST, Public Awareness, Impact of GST and so on. “A Study
on public awareness towards Goods and Services Tax (amendment)
bill in Kottayam Region” is an untouched topic, hence the present
study has been undertaken to fill up that gap

STATEMENT OF PROBLEM
The new GST (Amendment) Bill is yet to be ratified
by all the states of India and is yet to be passed by the Parliament of
India. Since there is a dilemma in the GST (Amendment) Bill, there is
a lack of awareness among the general public. Even the professionals
in the Indian Financial System are facing problems of clarity in the
concepts of GST. Therefore, it is the need of the hour to have a study
on the public awareness towards GST (Amendment) Bill.

AIMS & OBJECTIVES

The following are the aims and objectives of the study:
 To have an overview about the new GST Bill in India.
 To have a study on public awareness towards GST
(Amendment) Bill
 To compare the goods rates and tax rates before and after the
implementation of GST.
 To enquire the impact of GST after its implementation.
 To find the effect of GST in a middle class family
 To provide suggestions based on the findings of the study.
METHODOLOGY
The study is based on both Primary and Secondary data.
Primary data (Public awareness) is collected by using questionnaire
and the secondary data has been collected from books, journals, and
websites and so on. A questionnaire which contains 30 questions is
used to collect primary data, i.e. public awareness on GST.
Questionnaire contains questions related to socio- economic details of
respondents and awareness questions on GST. Using questionnaire
collect the data from 200 people.

DATA COLLECTION

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.
Tax/rate comparison of goods between before and after
implementation of 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 are 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.

Impact on some basic expenses in the household consumption basket:

Automobiles
The price difference will be bigger for SUVs (55% to 43%)
compared to small cars (30% to 29%).

Base price: Rs 4.75 lakh

Total taxes now*: Rs 1.43 lakh
Under GST: Rs 1.38 lakh

Refrigerators and washing machines

For most white goods, there won't be much difference in price as
new rates will be close to earlier ones.

Base price: Rs 20,000

Total taxes now*: Rs 5,300
Under GST: Rs 5,600

Life insurance
While premium of term plans and non-life policies are taxed,
only charges (mortality and AMC charges, etc) in other life policies
attract GST.
Base price: Rs 15,000
Total taxes now*: Rs 2,250
Under GST: Rs 2,700

Gold ornaments: Making charges Rs 10,000

The yellow metal will become dearer as there will be 3% GST
on gold and 5% on making charges.

Base price: Rs 60,000

Total taxes now*: Rs 1,800
Under GST: Rs 2,000

Hotel stay
If you settle for a room that costs less than Rs 1,000, there will
be no GST to pay. Then it rises progressively. Anything above Rs
5,000 will attract 28%.

Base price: Rs 7,000

Total taxes now*: Rs 1,400
Under GST: Rs 1,960

Refined cooking oil

Hair oil prices will stay high due to 18% GST. But coconut oil
being refined cooking oil will be taxed at 5%.

Base price: Rs 200

Total taxes now*: Rs 23
Under GST: Rs 10

Air travel: Economy

Taxation gap between economy and business class has increased
with GST.
Base price: Rs 5,000
Total taxes now*: Rs 300
Under GST: Rs 250

Train travel: AC coaches

While those travelling by local trains or in sleeper class are not
affected, first-class and AC compartment travellers will pay more

Base price: Rs 3,000

Total taxes now*: Rs 131
Under GST: Rs 150

Telecom: 2 phones + 1 DTH bill

Since these services will not get much input credit, you have to
bear the burden of hiked rates.

Base price: Rs 2,500

Total taxes now*: Rs 375
Under GST: Rs 450

Eating out: For a family of 4

A non-AC eatery will only charge 12% GST.
However, eating at a restaurant in a 5-star hotel will mean shelling
out 28% in GST.

Base price: Rs 2,000

Total taxes now*: Rs 270
Under GST: Rs 360

Apparel: Readymade
Due to industry pressure, GST on garments priced below Rs
1,000 has been brought down from 12% to 5%.
Base price: Rs 2,000
Total taxes now*: Rs 130
Under GST: Rs 240

Entertainment: Cinema for a family of 4

Reduction in GST for tickets up to Rs 100 will benefit single
screen cinemas in small towns.

Base price: Rs 1,200

Total taxes now*: Rs 360
Under GST: Rs 336

*Tax rates before implementing GST.

ANALYSIS & INTERPRETATION

Awareness on GST
No of
No Particulars Percentage
people
Yes 200 100
Familiar with
1 No 0 0
GST
Total 200 100
Any idea about Yes 72 36
2 proposed rate of No 128 64
tax Total 200 100
Yes 84 42
No 78 39
GST will
3 No
Burden people 34 17
opinion
Total 200 100
GST will result Yes 110 55
in higher prices No 28 14
4
for goods and No
62 31
services. opinion
 Total 200 100
Yes 25 12.5
No 89 44.5
GST is a fair tax
5 Don’t
system 86 43
know
Total 200 100
Yes 20 10
GST in No 50 25
6 educational Don’t
130 65
field know
Total 200 100
Yes 22 11
No 44 22
GST for
7 Don’t
medicines 134 67
know
Total 200 100

Majority of the respondents are familiar with GST. It is

found that 64% of the respondents have no idea about the proposed
rate of tax in GST. Most of the respondents (42%) agree that; the new
GST Bill will burden consumers. Most of the respondents (55%)
agree the statement, “The price of goods would increase after the
implementation of GST”. It is found that 44.5% of the respondents
have disagreed about the statement, “GST is a fair tax”. The analysis
revealed that 65% of the respondents have no idea about, GST in
educational field and 67% of respondents have no idea about GST for
medicines.
Most of them are not aware about different GST rates (62%)
and types of GST rates (71.5). Majority are not supporting GST
(51%) and they think that GST will cause inflation (63%) and it is not
better for economic development of country (50.5%). More than 65%
are not aware about the variations in SGST and about 64.7% are not
satisfied with the available details on GST.
The study conducted between middle class people and most
of them are price sensitive customers. More than 60% people agree
with that GST affects their consumer behaviour and it reduce personal
consumption. Because of lack of awareness about GST in public
caused an increase of goods rates.

Let’s take an example:

Before GST

Think about an Ice-cream; consider it had Rs.100

(including tax) before the implementation of GST. Take tax rate as
26% that is Rs.33. Remaining 77 is the production cost and profit.

Cost: Rs.100
Tax rate: 26%
Tax amount: Rs.26
Production cost & profit: Rs.74

After GST

After the implementation of GST, production cost increased up to

Rs.100 and make a large profit.

Production cost and profit: Rs.100

Tax rate: 18%
Tax amount: Rs.18
Cost: Rs.118

People have no proper awareness about GST, so that no-one will not
complain on this. Tax rate decreased but good rate increased.

FINDINGS

The following are the findings of the study:

 Everyone is familiar with the word GST.

  It is found that 64% of people have no idea about the proposed
rate of tax in GST.
 Most of the people (42%) agree the new tax system will burden
people.
 It is found that 44.5% of the respondents have disagreed about
the statement, “GST is a fair tax”.
 It is found that most of them are not aware about different GST
rates (62%) and types of GST rates (71.5).
 Majority are not supporting GST (51%) and they think that GST
will cause inflation (63%) and it is not better for economic
development of country (50.5%).
 More than 65% are not aware about the variations in SGST and
about 64.7% are not satisfied with the available details on GST.
 It is found that more than 60% people agree with that GST
affects their consumer behaviour and it reduce personal
consumption. GST affect the family budget.
 Lack of awareness cause an increase of goods rate.

CONCLUSION

The survey concentrated more on middle class family because

most of the Indians are belonging in this category. Most of them are
unaware about GST. After the implementation of GST, cost of most
items are increased. It is because of improper implementation of GST
and unawareness of society about GST. We find that tax payers have
more knowledge about GST, its different rates and types. But most of
them are not supporting the new tax system. Business people aware
about GST but they are suffering to pay the return bill because of lack
of more details about GST payments and return. More than half of the
people have no proper knowledge about GST. And most of them have
attitude against GST. GST is good tax system, but it not implemented
properly. If an item had less tax rate than previous system, it will not
reduce the cost of that item. This means our government need intense
focus on publics’ knowledge and attitude towards GST. There were
no proper rules and regulations for GST, if it is no one aware about
this. Each shop, business organization, producer or seller have a GST
number and it need to print on bills. But there were no proper
computer billing applications or proper system for billing purpose.
A great revolution in the indirect tax system i.e. GST care in
India, but the general public is almost unaware of the concepts. India
being a democratic country should make clear to its citizens about it.
Therefore, it is the need of each and every citizen to have awareness
about the new GST Bill. 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.

REFERENCE

 Central Board of Excise & Customs; GST FAQ ;

available from www.keralataxes.gov.in
 S.Murugaiyan, R.Sasi Jeyanthi and P.Siddharth, “A Study
on Public Awareness towards Goods and Services Tax
(Amendment) Bill in Sivakasi Region”, www.trp.org.in
 Narendra Nathan, “How GST will impact your household
budget” , 17 Sep 2017,
www.economictimes.indiatimes.com
 Amol Agrawal,” India’s Goods and Services Tax – A
Primer”, STCI Primary Dealer Ltd, http://www.stcipd.com
 GST Rates Comparison Chart - Existing Rates Vs New
GST Rates 2017, https://gst.caknowledge.in/gst-rates-
comparison-chart/
 S.Muthupandi, Dr. A. Joseph Xavier, Awareness of
Implementation of Goods and Services Tax (GST) Among
College Students’ in Sivakasi, http://ijesc.org/
 Milandeep Kour Kajal Chaudhary Surjan Singh
Baljinder Kaur, “A study on impact of gst after its
implementation”, www.ijissh.org
 www.wikipedia.com
 www.GST.in
 http://www.gstindia.com