CHAPTER 1

INTRODUCTION & MEANING

Goods and Services Tax is an indirect tax imposed on the supply of goods and services. GST is
imposed at every step in the production process but is meant to be refunded to all parties in the
various stages of production other than the final consumer.

Wholesale Trade
Wholesale trade is a form of trade in which goods are purchased and stored in large quantities
and sold, in batches of a designated quantity, to resellers, professional users or groups, but not to
final consumers.

Definition
Wholesale trade consists of purchasing, storing and selling goods, generally to retailers,
professional (industrial or commercial) users or authorities, or to other wholesalers or
intermediaries, regardless of the quantities sold.

Wholesale trade intermediaries put buyers and vendors into contact (or perform commercial
operations for a third party), without being owners of the goods (these are commission agents,
brokers, sales agents, self-employed representatives, etc.). Trading groups, other trade
intermediaries, may be the owners of goods, which they sell to their members and their affiliates
for a very low trade margin.

Under the current indirect tax regime, wholesalers and retailers normally escape the tax liability
as there is no mechanism by which their actual purchase and sale can be traced. Many of their
transactions are done in black, meaning no invoice is issued to the buyer, and eventually no entry
is posted in the books for such sales.

These taxpayers usually leverage the tax liability evaded and undercut the market to gain in
volume. Their margin of profit remains as low as 1 percent. Since under the GST regime, every
invoice pertaining to taxable supply has to be uploaded on GSTN’s common portal and has to be
accepted by the buyer, wholesalers and retailers will now be unable to escape their tax liability.
The only possibility for tax evasion would arise if the entire supply chain is outside the tax
network and did not file a return under GST law, which is very unlikely.
All these factors have one easy solution – finding solace in the wholesale market. The wholesale
market, in a supply chain of goods and services, stands as an intermediary between the retailers
and the manufacturers. Even though both parties sell the same goods and services, their behavior
in the market is what differentiates them.

Distributor’s Role

 Shares a commercial relation with the manufacturer;

 He may deal with not one but several product lines, but ensures that none of these product
lines are in competition with or conflict with each other;
 Services the products to retailers, but may also service wholesalers;
 He deals with providing labour support to retailers to help them become established and
may also provide services which primarily include provision of credit to the manufacturer,
but also other services such as providing product related information, estimation of
valuation, technical support, post sales services;
 Most distributors enter into agreements with the primary manufacturer who in turn supplies
products to only limited distributors within a particular territory;
 They are usually very organized and maintain healthy margins with respect to their sales;
 They share a similar equation with retailers as the equation shared with them by the
manufacturer.
Wholesaler’s Role

 Rarely has any commercial or business obligations and operates on his own terms;
 Receives goods in bulk from the distributor for the purpose of resale, usually in bulk to
other retailers, distributors and even to other wholesalers;
 Purchases goods at a lower cost due to purchase being in bulk;
 May purchase a vast range of products and is not restricted in purchase as long as he is
making a profit;
 Mostly rural and some urban retailers prefer buying their products from distributors for the
lower cost of purchase and absence of too many terms and conditions;
 Works on narrow margins and thus rarely offers credit; rarely in the business of taking back
any unsold stock or products.
 Manufacturers ultimately benefit from the collaboration between retailers and wholesalers
as they can achieve their sales from markets where they are not expected to handle sales and
shipping directly.
 A mechanism to trace the tax liability on wholesalers, from the actual purchase of goods
from manufacturers to the sale made successfully to retailers. This is because they operate
without any commercial or business obligations, as most of their transactions are done in
black, where no invoice is issued to the buyer, A wholesaler in simple words, is a
middleman between manufacturers and retailers. Currently, there is nand eventually no
entry is posted in the books for such sales either.
 Lets examine what impact will GST have on Indian wholesale market-

1. Wholesalers acceptance towards GST

The bulk-buying nature of wholesalers allows them to bargain for lower prices from the
manufacturer, and undercut the market to gain in volume which results in overall profit for them.
Since this retailer-wholesaler dynamics allows manufacturers to achieve sales from those
markets, where they are not able to handle direct retail sales and shipments – there is no stopping
on the way wholesalers operate.

However, under the GST regime, every invoice pertaining to taxable supply has to be uploaded
on GSTN’s common portal and has to be acknowledged by the buyer. Both wholesalers and
retailers will now be unable to escape their tax liability. The only possibility for tax evasion
would arise if the entire supply chain is outside the tax network and does not file a return under
GST law, which is very unlikely. To avoid being boycotted by other businesses in the supply
chain, come 1st July and many wholesalers will eventually move to the tax bracket.

2. De-stocking or Re-stocking, what will the Wholesalers choose?

Under GST Law, retailers can avail input tax credit on closing stock held before the
implementation of GST. This however, is subjective to certain conditions such as, there should
be a record of invoices that reflect tax levied on transactions to be able to claim tax credit. In
most of the cases, the VAT / excise tax chain stops with the first stage dealers – wholesalers, and
the tax is passed on to the retailers as additional cost. If this way of business operation continue
post GST, retailers will be forced to pass on the tax cost to their customers, making their prices
much less in comparison to other players in the market. This will lead to retailers across the
chain having to de-stock the inventory during the transition phase, and again re-stock under the
new GST regime. This business activity of retailers will have an adverse effort on the
wholesalers who too will have to de-stock. If only the wholesalers become GST Compliant, sale
through the hurricane akin to the demonetozation phase, this could all translate into a steep rise
in demand for goods as a result of a widespread re-stocking of goods by wholesalers.

3. Will Direct Channels take over the Wholesale market?

From our above mentioned points, it is quite evident that wholesalers will have to transition to
GST to sustain their business vertical. And, to come in their support will perhaps be the
manufacturers they’re dealing with by reducing the cost of goods and increasing commissions ,
etc. But, to avoid so much chaos with the wholesalers, the manufacturers may also consider
reaching out to direct channels for business, and if they in all probability do so then this step of
theirs is sure to cause a major spike in company-owned-direct-outlets to carry forward the
distribution of goods business activity.

4. The Wholesale Market will Revive

Good things happen to people, who wait! Considering the fact that post GST, there will be
seamless availability of input tax credit across state boundaries, the supply chain will be more
efficient. Manufacturers would like to expand their business to other home states as well through
GST compliant wholesalers. And, wholesalers will make the most of the additional opportunity
by generating more sales from existing retailers, while also serving more retailers in the same
geography.

IMPACT OF GST ON WHOLESALER TRADERS

Under the current indirect tax regime, wholesalers and retailers normally escape the tax liability
as there is no mechanism by which their actual purchase and sale can be traced. Many of their
transactions are done in black, meaning no invoice is issued to the buyer, and eventually no entry
is posted in the books for such sales.

These taxpayers usually leverage the tax liability evaded and undercut the market to gain in
volume. Their margin of profit remains as low as 1 percent. Since under the GST regime, every
invoice pertaining to taxable supply has to be uploaded on GSTN’s common portal and has to be
accepted by the buyer, wholesalers and retailers will now be unable to escape their tax liability.
The only possibility for tax evasion would arise if the entire supply chain is outside the tax
network and did not file a return under GST law, which is very unlikely.
Distributors and wholesalers alike share a very integral role in the supply chain and it is obvious
that manufacturers cannot survive without their collaboration. Even though manufacturers have
begun to brace themselves as to what to expect with the advent of the GST, they face major
concerns from their retailers and wholesalers and whether these players are able to get up to
speed to GST compliance so that the process can function smoothly. Post the demonetization era,
the wholesale market has been wounded, however, with the coming into effect of the GST,
hopefully the market will recover and boost growth better than ever, due to the primary reasons
of transparency and better organization.

Below there are the ways in which the wholesale market will be impacted by the GST –

Impact Details
 Most wholesalers make transactions in bulk and pay cash upfront as
Tax increases for consideration – from both manufacturers and distributors – albeit, with a
wholesalers – difference in their tax liability towards each of these market participants.
bringing them into  It is difficult for wholesalers to pass on the excise tax liability to the
the tax bracket and subsequent buyer in the supply chain as most of them do not possess excise
ensuring compliance registration themselves – therefore, they are unable to avail of any tax credit.
  The primary activity of a wholesaler is to buy and sell products – however
under the current indirect tax regime they are also burdened with the
requirements of maintaining invoices, being compliant with several tax laws
etc. – leading them astray from their primary course of work. Additionally,
wholesalers find it difficult to maintain compliance constantly because of
complex transactions and tax structures, and owing to non-registration, they
are not under scrutiny. Thus their tax liability is reduced significantly and
they are able to undercut the prices prevalent in the market thereby
generating higher sales.
 Under the GST regime however, all invoices are required to mandatorily
uploaded against the registered GSTN portal and the invoice must also be
simultaneously accepted by a buyer. Further, since all the taxes have been
subsumed into a common unified tax, tax credit has become more seamless
and smooth across the supply chain, notwithstanding the buyer or the seller
involved with the wholesaler.
 An advantage is that multiple registrations have been struck out and thus
wholesalers can be compliant with ease. The idea of tax evasion has been
cordoned off completely, however despite this, there still may be several
wholesalers who try to evade the compliance route – nonetheless, since there
is a system of checks and balances under the GST and buyers and sellers
have to confirm sales and purchases, non-compliance will be unlikely in the
long run.
 Wholesalers will ultimately be forced to be GST compliant in order to
maintain and sustain their business relations with the other players in the
supply chain.
 The entire wholesale market is dependent on very low margins. Especially in
the wake of demonetization, the entire wholesale market reverted to de-
stocking its inventory in order to get higher liquidity because of the cash
crunch that hit the nation.
 Big names in the fast-moving consumer goods sector such as Dabur and Tata
fear that the same situation will arise once again with the GST coming into
effect especially because of the fear that retailers have instilled within
themselves regarding availing of input tax credit on existing stock of goods.
 To give a clearer picture, retailers are registered under their respective state
VAT laws under the current indirect tax regime and are required to make
VAT payments on the stock held by them as at the date of transition. It is
pertinent to note that even though the VAT has been allowed as input credit
under the GST regime, there are certain conditions imposed by the
government on availing any input tax credit on closing stock – which means
that some retailers may be left out.
 100% input tax credit shall be available on goods on which the excise duty
Destocking against has been paid and there are invoices to ascertain the same – in case the
the shift from the invoices are not available then only 40% of the input tax credit may be
indirect tax regime to availed.
the GST regime  Tax on excise is applicable only to the wholesalers and distributors – to the
 retailers, such excise is passed as an additional cost and due to this reason,
retailers are usually unable to claim the entire amount of credit, owing to an
absence of information on the invoices.
 Pursuant to the GST regime, this cost shall be borne by the consumer,
amounting to less competitive prices to other players thereby triggering
destocking of inventory by the retailers across the nation (during the
transition to GST phase) and then restock their inventory post the transition
has settled.
 This means that for the transition period, wholesaler demand may die down
which would amount to wholesalers undergoing to the destocking exercise as
well.
 Finally, because of such restocking, the ultimate demand for goods is
expected to be on the rise.
 Wholesalers, especially those linked to provision of fast-moving consumer
goods and durable goods, have become wary of wholesale business as the
GST date moves closer. The managing director of HUL, Mr. Sanjiv Mehta
was recently noted saying that the entire wholesale sector in India would take
some time to stabilize post the GST transition, leading to a downturn in the
sector when compared to direct distribution channels.
 But obviously, the GST regime is expected to cause disruption in the
wholesale sector such as bulk transitions, sale for cash consideration, lack of
giving credit, maintenance of liquidity, operating on wafer thin margins etc.
 More wholesalers shall become part of the tax bracket, increasing both cost
and effort. The principal manufacturers shall become extremely important as
their role would include servicing the retailers in urban as well as rural areas.
 Manufacturers will have to further provide incentives in the form of lower
costs and increased commissions to wholesalers – nonetheless, the burden on
the direct distribution channel is expected to be lesser as distributors would
have entered into agreements with manufacturers for becoming GST
compliant, investing in technology and fixed assets.
 The wholesale sector thus is envisaged to becoming more expensive as
opposed to direct distribution. It is also pertinent to note that manufacturers
in the fast-moving consumer goods and durable goods sector shall begin to
extend direct reach in an effort to become more cost effective.
 The GST regime could lead to an increase in outlets directly owned by the
company and an increase in distribution channels – leading to positive news
for organized wholesale participants in the market, e-commerce outlets and
Direct Distribution cash & carry models of business that shall easily take over and crush the
Channels unorganized sector.
 Most supply chain models are made keeping tax liabilities in mind as
multiplicity of taxes can lead to greater costs especially when it comes to
transactions taking place interstate. This causes wholesalers to enter into
business agreements with manufacturers and retailers on an intrastate basis,
Open Market policy and limits them from reaching outside the state or growing their business.
  Under the GST regime, a more positive boost to wholesalers is expected as
firstly the multiplicity of taxes will be struck down. This will lead to the
entire nation becoming the marketplace. Further, input tax credit availability
will allow manufacturers to become more competitive both intrastate and
interstate.
 Manufacturers shall have wider room for access when it comes to reaching
out to distributors and wholesalers across the country thereby leading to an
expansion in the business portfolio. This helps in generation of sales from
both the existing retailers as well as serving a higher number of retailers
within the same state.

In conclusion, the GST is expected to impact the wholesale market greatly. Even though this
impact may not be what the market expects with the first few hits, just like how demonetization
was rolled out, eventually the ecosystem will see the benefits and advantages of GST. Anyone
can survive this wave if there are ready to be in compliance with the taxation, as ultimately, such
adherence will allow all players in the market to reap benefits and achieve higher revenue and
overall growth.
The wholesale market is fundamental to extending the reach of goods and services to the
interiors of the country, especially the rural markets. Most wholesalers operate in cash
transactions because of which there is a good chance that some transactions are not accounted
for, which was previously a concern but ceases to be one under GST.
Given below are the main advantages that GST brings to wholesalers.

1.Transparent tax management

The introduction of technology into the taxation system can be a blessing in disguise, an
opportunity to bring about transparency in tax management. Rather than relying on cash
transactions, wholesalers will now get an opportunity to go digital. They will also be able to avail
the facility of input tax credit. Input tax credit is where the businessman will be able to claim tax
on all input goods and/or services. For example, if a wholesaler is renting a tempo for transport
of goods, going ahead they will be able to claim the tax paid on the rental and receive it as input
credit. They will thus be able to reduce the final market price of the transported goods by making
up for that amount.

2. Financial streamlining

Because the entire supply value chain including tax flows will be on GST records, wholesalers
will be better connected to retailers and suppliers. For example, the payment for a consignment
will reflect in the accounting records of the supplier company as well as the wholesaler, leaving
no ambiguity about payables and receivables. This will make it easier to process payments and
get tax returns in a timely manner, thereby improving the cash flows of traders. A reliable
positive cash flow will help build confidence in the new regime, by making working capital
available and aiding opportunities to grow the business.

3. Reorganization of supply chain

GST will enable high visibility and streamlining of the supply chain, providing wholesalers with
a transparent view of supply movements. For example, taxation at the “place of supply” is
already mobilizing FMCG companies establish fewer warehouses, the sizes of which will be
larger than before. This will aid business efficiency in the long run. However, in the initial
transition phase, many wholesalers may undergo de-stocking since they would have already paid
VAT on their current stocks, and would like to avail of the input tax credit on the basis of the
GST rules.

4. Ease of borrowing through digital lending

Because financial and tax transactions will now be recorded in the GST system, even small
traders will have digital records of their company finances and credit status. These digital records
will act as a ready reckoner of information when a trader opts for a loan. Financial institutions
and online lenders like Capital Float can now easily assess the loan eligibility of small traders
such as Kirana owners by accessing this data, and provide them quick and easy loans. Borrowing
funds online and doing business will now be easier.

5.Wholesalers acceptance towards GST

The bulk-buying nature of wholesalers allows them to bargain for lower prices from the
manufacturer, and undercut the market to gain in volume which results in overall profit for them.
Since this retailer-wholesaler dynamics allows manufacturers to achieve sales from those
markets, where they are not able to handle direct retail sales and shipments – there is no stopping
on the way wholesalers operate.

However, under the GST regime, every invoice pertaining to taxable supply has to be uploaded
on GSTN’s common portal and has to be acknowledged by the buyer. Both wholesalers and
retailers will now be unable to escape their tax liability. The only possibility for tax evasion
would arise if the entire supply chain is outside the tax network and does not file a return under
GST law, which is very unlikely. To avoid being boycotted by other businesses in the supply
chain, come 1st July and many wholesalers will eventually move to the tax bracket.

6. De-stocking or Re-stocking, what will the Wholesalers choose?

Under GST Law, retailers can avail input tax credit on closing stock held before the
implementation of GST. This however, is subjective to certain conditions such as, there should
be a record of invoices that reflect tax levied on transactions to be able to claim tax credit. In
most of the cases, the VAT / excise tax chain stops with the first stage dealers – wholesalers, and
the tax is passed on to the retailers as additional cost. If this way of business operation continue
post GST, retailers will be forced to pass on the tax cost to their customers, making their prices
much less in comparison to other players in the market. This will lead to retailers across the
chain having to de-stock the inventory during the transition phase, and again re-stock under the
new GST regime. This business activity of retailers will have an adverse effort on the
wholesalers who too will have to de-stock. If only the wholesalers become GST Compliant, sale
through the hurricane akin to the demonetozation phase, this could all translate into a steep rise
in demand for goods as a result of a widespread re-stocking of goods by wholesalers.

7.Will Direct Channels take over the Wholesale market?

From our above mentioned points, it is quite evident that wholesalers will have to transition to
GST to sustain their business vertical. And, to come in their support will perhaps be the
manufacturers they’re dealing with by reducing the cost of goods and increasing commissions ,
etc. But, to avoid so much chaos with the wholesalers, the manufacturers may also consider
reaching out to direct channels for business, and if they in all probability do so then this step of
theirs is sure to cause a major spike in company-owned-direct-outlets to carry forward the
distribution of goods business activity.

8. The Wholesale Market will Revive

Good things happen to people, who wait! Considering the fact that post GST, there will be
seamless availability of input tax credit across state boundaries, the supply chain will be more
efficient. Manufacturers would like to expand their business to other home states as well through
GST compliant wholesalers. And, wholesalers will make the most of the additional opportunity
by generating more sales from existing retailers, while also serving more retailers in the same
geography.

As we have seen that GST is a boon to the Indian economy as it increases the GDP of the
country by 2%-3% which in turn increases the no. of taxpayers and leads to increase in tax
revenue for the government. GST will favourably affect the Distributors or Wholesalers in the
following way:

 GST is a unified tax that brings benefits to the distributor or wholesaler as it avoids the
cascading effects of tax and simplifies the compliance procedure and open opportunities
to consolidate suppliers
 GST is also expecting to cut down the cost of goods manufactured and distributed in
India which in turn benefit the end consumer
 GST bring one unified standard rate which is charged on all product all over India which
removes the hurdles of large variances and different tax rates prevailed in VAT
 GST harmonizes central and state tax administration which in turn reduce duplication and
compliance cost.
 GST automatize the compliance procedure which reduces errors and increase efficiency
 GST reduces the additional duty, CVD, special additional duty components of customs
duty
 GST removes excise duty concepts which results in more manufacturing as GST is levied
at the time of sale/supply of product rather than at the time of removal of products from
the factory and that leads to more distribution and wholesale of the products
  In GST taxation event will shift from manufacture, sale or provision of services to supply
of goods and services hence branch transfer would be constituted as supply and would be
taxable however eligible for full credit
 GST made provision for removing the imposition of entry tax or octroi across India
which indirectly benefits the wholesaler/distributor
 GST has widened the tax base, which is necessary for lowering the tax rates and helps in
eliminating the classification disputes
 GST replaces the most indirect tax in India which indirectly helps
distributors/wholesalers to lower their tax burden
 In GST there is common formats for a tax return, payments, refund etc. Traders operating
in multiple geographies across India will find it easy to compliance
 GST nullify the cascading effect which lower down the price of goods and leads to
increase in revenue trickling down to the distributors as the dealers pass on the benefit of
reduced tax
 In GST tax burden will be equally divided among the whole supply chain which includes
the wholesaler and distributors through lower tax rates by increasing the tax bases and
minimizing the exemptions

The following are some of the major changes that GST will bring in the Indian wholesale
market:

1.High Taxation

In the current taxation system, wholesalers usually buy in bulk and pay in cash. They sell the
goods at extremely low profits (about 1% or so) but are still able to generate high revenues due
to the scale itself.

One of the reasons why wholesalers are happy with their business in India is because most of
them don’t come under the tax radar. They deal with next to no formal paperwork and use cash
for transactions for the most part. However, GST will take that comfort away from
them. wholesalers

GST regime is a based on an interconnected system in which manufacturers, wholesalers,

distributors, and retailers will need to work in sync to avoid penalties and enjoy the tax benefits it
has to offer. So, wholesalers who will come under a tax bracket will have to pay their taxes, or
they won’t get business at all. This is because the other entities (distributors, retailers, etc.) in the
chain would want to stay compliant to claim input tax credits. Moreover, the GST council is
especially determined to check tax evasion under the new taxation system to increase tax
revenue.

2.Stock Problems During Migration wholesalers

The entire wholesale industry is based on small margins and large inventories. Thus, in an event
of cash crunch, stock clearance can become a big problem. In fact, the same happened last year
when the government launched the “note-ban” operation. Industry experts believe that the same
can happen after GST implementation.

Wholesalers who still have stocks are supposed to pay VAT on them at the day of GST launch as
per the existing laws. For their convenience, the government has made provisions that allow
them to use the VAT paid as input tax credits in the GST scheme. However, they need to satisfy
certain conditions to qualify, which is not possible for every business.

Another problem with the new tax regime is linked to excise duty. Wholesalers who have paid
excise duty can receive 100% tax credit but only if they can furnish appropriate invoices. If
that’s not the case, they will only get 40% of the excise in the form of tax credits.

3.Increased Business Costs

To be GST-complaint and avail its benefits, wholesalers will need to maintain and record their
transactions, furnish returns, and do a lot more. Plus, the majority of them will also need to pay
higher taxes. So, doing business is going to become an expensive affair.

Since manufacturers can’t do without someone selling their products, they are likely to try
helping the wholesalers through better pricing and higher commissions, etc. Distributors, on the
other hand, would have already adapted to the GST regime to protect themselves, albeit at a
smaller cost. Thus, the manufacturers are likely to start leaning towards direct distribution rather
than through wholesale networks- a misfortune for the wholesalers.

For the most part, the life of an average wholesaler is going to be tough under the GST regime.
According to industry stakeholders, they will need at least a few months to adapt to the changes
and get back on track. However, they will still benefit with an organized system, in the long run,
that’s for sure.

The wholesale market is fundamental to extending the reach of goods and services to the
interiors of the country, especially the rural markets. Most wholesalers operate in cash
transactions because of which there is a good chance that some transactions are not accounted for
which was previously a concern but ceases to be one under GST.

CHAPTER 2
REVIEW OF LITERATURE
Before embarking upon the research study author made an attempt to review the literature on the
subject. A number of research papers and articles provide a detailed insight on GST. The
findings from the literature are presented here.

Poirson (2006) studied the Indian tax system from the perspective of how effective it is towards
encouraging growth of the economy. The author has compared the Indian tax system to other
countries and concluded that Indian economy is highly indirect tax dependent, effective tax rates
and productivity are lower, and marginal tax rates are higher. The study has concluded that
indirect taxes are a big contributor of total taxes which can be regressive, effective tax rates are
lower and marginal effective tax rates are high.

Ahmad (2009) discussed the GST specifically in relation to the place of supply rules for services
to be adopted, the method to apply dual GST. The author has discussed the options to introduce
the dual GST in India which could be Concurrent Dual GST, National GST or State GST. Under
the concurrent dual GST the better option was the one where GST is applied on both goods and
services. The other option explored was whether the Central GST would be on goods and
services but state GST would be only on goods. This option also recommended one single return
with both CGST and SGST details and PAN based registration. Given the difficulties in
identifying the state where SGST on services is payable, one more variant of dual GST was
where the center collects SGST on behalf of states and then apportioning it on some scientific
basis. The authors then discussed the various rates available to tax, the slab structures,
exemptions, etc. The paper concluded that whilst GST is much awaited all these issues need to
be addressed for it to be effective.

Ehtisham Ahmed and Satya Poddar (2009) studied “Goods and Service Tax Reforms and
Intergovernmental Consideration in India” and found that GST introduction will provide simple
and transparent tax system with increase in output and productivity of economy in India. But the
benefits of GST are critically dependent on rational design of GST.

NCAER (2009) pointed out that the introduction of GST in India would lead to benefits like
increase in efficiency in use of energy, increase in general economic welfare, increase in the
exports, increase in the GDP, increase in the return on capital, optimum returns and allocation of
the factors of production, reduction in general price level, etc. The paper has stated how indirect
taxes have always been a major contributor in the GDP in India as compared to most countries
forming a part of the study. Similarly in India, indirect taxes form major part of the total taxes
collected in the economy. The paper further states that with the introduction of GST, resources
would be used better; the tax could become environment friendly. Further, the recommended rate
for the comprehensive GST is 6-10 %. It was suggested that there should be fewer taxes, most
indirect taxes should be subsumed within the GST, and there should be very few exemptions.
The paper also studies the impact of the proposed GST on the imports, tax collections, exports,
etc.

Dr. R. Vasanthagopal (2011) studied “GST in India: A Big Leap in the Indirect Taxation
System” and concluded that switching to seamless GST from current complicated indirect tax
system in India will be a positive step in booming Indian economy. Success of GST will lead to
its acceptance by more than 130 countries in world and a new preferred form of indirect tax
system in Asia also.

Jana V. M., Sarma& V Bhaskar (2012) studied “The Road Map for implementation of Goods
and Service Tax”. He found that the steps to be undertaken to implement the comprehensive tax
system i.e., GST. The authors have thrown light on the constitutional amendment required for the
implementation of GST in India.

Syed Mohd Ali Taqvi (2013) studied the challenges and opportunities of Goods and Service
Tax in India. He explained that GST is only indirect tax that directly affects all sectors and
sections of our country. It is aiming at creating a single, unified market that will benefit both
corporates and economy. He also explained the proposed GST model will be
implemented parallel by the central and state governments as Central GST and State GST
respectively.

Jaiprakash ( 2014) in his research study mentioned that the GST at the Central and the State
level are expected to give more relief to industry, trade, agriculture and consumers through a
more comprehensive and wider coverage of input tax set-off and service tax setoff, subsuming of
several taxes in the GST and phasing out of CST. Responses of industry and also of trade have
been indeed encouraging. Thus GST offers us the best option to broaden our tax base and we
should not miss this opportunities to introduce it when the circumstances are quite favorable and
economy is enjoying steady growth with only mild inflation.
Nitin Kumar (2014) studied “Goods and Service Tax- A Way Forward” and concluded that
implementation of GST in India help in removing economic distortion by current indirect tax
system and expected to encourage unbiased tax structure which is indifferent to geographical
locations.

Nishitha Guptha (2014) in her study stated that implementation of GST in the Indian
framework will lead to commercial benefits which were untouched by the VAT system and
would essentially lead to economic development. Hence GST may usher in the possibility of a
collective gain for industry, trade, agriculture and common consumers as well as for the Central
Government and the State Government.

Saravanan Venkadasalam (2014) analyzed the post effect of the goods and service tax (GST)
on the national growth on ASEAN States using Least Squares Dummy Variable Model
(LSDVM) in his research paper. He stated that seven of the ten ASEAN nations are already
implementing the GST. He also suggested that the household final consumption expenditure and
general government consumption expenditure are positively significantly related to the gross
domestic product as required and support the economic theories. But the effect of the post GST
differs in countries. Philippines and Thailand show significant negative relationship with their
nation’s development. Meanwhile, Singapore shows a significant positive relationship.

Agogo Mawuli (2014) studied “Goods and Service Tax-An Appraisal” and found that GST is
not good for low-income countries and does not provide broad based growth to poor countries. If
still these countries want to implement GST then the rate of GST should be less than 10% for
growth.

Shefali Dani (2015) has suggested that GST administration is an irresolute endeavor to
legitimize backhanded expense structure. Roughly more than 150 nations have executed GST
idea. The legislature of India must examination the GST administration set up by different
nations and furthermore their aftermaths previously actualizing GST. IT is the need of hour that,
the legislature must make an endeavor to protect the huge poor populace of India, against the
expansion because of execution of GST. GST will disentangle its current roundabout
duty framework and should expel wasteful aspects made by the current heterogeneous
expense framework, just if there is a reasonable agreement over issues of edge constrain, income
rate, and incorporation of oil based commodities, power, alcohol and land.

Srinivas K. R (2016) in his article “Issues and Challenges of GST in India” mentioned that
central and state governments are empowered to levy respective taxes as per the Indian
constitution which is likely to change the complete scenario of present indirect taxation system.
GST will be a compressive indirect tax structure on manufacture, sales and consumption of
goods and services throughout India, to replace the various indirect taxes levied by the both the
governments.

Poonam (2017) in her study cleared that in the system of indirect taxation GST plays a very
important role. The cascading and double taxation effects can be reduced by combing central and
state taxes. Consumer’s tax burden will approximately reduce to 25% to 30% when GST is
introduced and then after Indian manufactured products would become more and more
inexpensive in the domestic and international markets. This type of taxation system
would directly encourage economic growth. GST with its transparent features will prove
easier to administer.

Ehtisham Ahmed and Satya Poddar (2009) studied “Goods and Service Tax Reforms and
Intergovernmental Consideration in India” and found that GST introduction will provide simple
and transparent tax system with increase in output and productivity of economy in India. But the
benefits of GST are critically dependent on rational design of GST.

Dr. R. Vasanthagopal (2011) studied “GST in India: A Big Leap in the Indirect Taxation
System” and concluded that switching to seamless GST from current complicated indirect tax
system in India will be a positive step in booming Indian economy. Success of GST will lead to
its acceptance by more than 130 countries in world and a new preferred form of indirect tax
system in Asia also.

Jana V. M., Sarma& V Bhaskar (2012) studied “The Road Map for implementation of
Goods and Service Tax”. He found that the steps to be undertaken to implement the
comprehensive tax system i.e., GST. The authors have thrown light on the constitutional
amendment required for the implementation of GST in India.

Syed Mohd Ali Taqvi (2013) studied the challenges and opportunities of Goods and Service
Tax in India. He explained that GST is only indirect tax that directly affects all sectors and
sections of our country. It is aiming at creating a single, unified market that will benefit both
corporates and economy. He also explained the proposed GST model will be
implemented parallel by the central and state governments as Central GST and State GST
respectively.

Agogo Mawuli (2014) studied “Goods and Service Tax-An Appraisal” and found that GST is
not good for low-income countries and does not provide broad based growth to poor countries. If
still these countries want to implement GST then the rate of GST should be less than 10% for
growth.

Jaiprakash ( 2014) in his research study mentioned that the GST at the Central and the State
level are expected to give more relief to industry, trade, agriculture and consumers through a
more comprehensive and wider coverage of input tax set-off and service tax setoff, subsuming of
several taxes in the GST and phasing out of CST. Responses of industry and also of trade have
been indeed encouraging. Thus GST offers us the best option to broaden our tax base and we
should not miss this opportunities to introduce it when the circumstances are quite favorable and
economy is enjoying steady growth with only mild inflation.

Nitin Kumar (2014) studied “Goods and Service Tax- A Way Forward” and concluded that
implementation of GST in India help in removing economic distortion by current indirect tax
system and expected to encourage unbiased tax structure which is indifferent to geographical
locations.

Nishitha Guptha (2014) in her study stated that implementation of GST in the Indian
framework will lead to commercial benefits which were untouched by the VAT system and
would essentially lead to economic development. Hence GST may usher in the possibility of a
collective gain for industry, trade, agriculture and common consumers as well as for the Central
Government and the State Government.

Saravanan Venkadasalam (2014) analyzed the post effect of the goods and service tax
(GST) on the national growth on ASEAN States using Least Squares Dummy Variable Model
(LSDVM) in his research paper. He stated that seven of the ten ASEAN nations are already
implementing the GST. He also suggested that the household final consumption expenditure and
general government consumption expenditure are positively significantly related to the gross
domestic product as required and support the economic theories. But the effect of the post GST
differs in countries. Philippines and Thailand show significant negative relationship with their
nation’s development. Meanwhile, Singapore shows a significant positive relationship.

Shefali Dani (2015) has suggested that GST administration is an irresolute endeavor to
legitimize backhanded expense structure. Roughly more than 150 nations have executed GST
idea. The legislature of India must examination the GST administration set up by different
nations and furthermore their aftermaths previously actualizing GST. IT is the need of hour that,
the legislature must make an endeavor to protect the huge poor populace of India, against the
expansion because of execution of GST. GST will disentangle its current roundabout
duty framework and should expel wasteful aspects made by the current heterogeneous
expense framework, just if there is a reasonable agreement over issues of edge constrain, income
rate, and incorporation of oil based commodities, power, alcohol and land.

Srinivas K. R (2016) in his article “Issues and Challenges of GST in India” mentioned that
central and state governments are empowered to levy respective taxes as per the Indian
constitution which is likely to change the complete scenario of present indirect taxation system.
GST will be a compressive indirect tax structure on manufacture, sales and consumption of
goods and services throughout India, to replace the various indirect taxes levied by the both the
governments.

Poonam (2017) in her study cleared that in the system of indirect taxation GST plays a very
important role. The cascading and double taxation effects can be reduced by combing central and
state taxes. Consumer’s tax burden will approximately reduce to 25% to 30% when GST is
introduced and then after Indian manufactured products would become more and more
inexpensive in the domestic and international markets. This type of taxation system
would directly encourage economic growth. GST with its transparent features will prove
easier to administer.

CHAPTER 3
RESEARCH METHODOLOGY

CHAPTER 4
DATA ANALYSIS, INTERPRETATION AND PRESENTATION
Q.1. Has GST affected your profit margin?

Analysis ,
Above result shows that there is nothing a big margin of changes in the profit of wholesalers.

Q.2. What impact GST left on your customers?

Analysis,

Above results shows that there is