Study on Implementation of GST and Customers Perception Towards

Goods and Service Tax

Research Report submitted to Bharathidasan University in partial fulfilment of the

requirements for the award of

Masters of Business Administration

Submitted by

Manohar A Varma

Register No.:17418177
under the guidance of

Prof. Prashant Mushtagi

Professor
Jain College
Bangalore

Bharathidasan University
Tiruchirappalli
2018
 DECLARATION

I hereby declare that the research entitled “Study of Implementation of GST and
Customers Perception towards Goods and Service Tax” submitted to Bahrathidasan
University in partial fulfillment of the requirements for the award of MBA, is a record of
independent research work carried out by me under the supervision and guidance of
Prof. Prashant Mushtagi, Professor, Jain College, Bangalore. This work has not
formed the basis for the award of any Degree and has not been submitted previously
to any other College/University.

Tiruchirappalli
September, 2018 Manohar A Varma
Prof. Prashant Mushtagi
Professor
Jain College
Bangalore

CERTIFICATE

I certify that this research entitled “Study on Implementation of GST and Customers
Perception towards Goods and Service Tax” submitted to Bharathidasan University in
partial fulfillment of the requirements for the award of MBA, is a record of independent
research work carried out by Mr. Manohar A Varma under my supervision and
guidance. This work has not formed the basis for the award of any Degree and has
not been submitted previously to any other College/University.

Tiruchirappalli Prof. Prashant Mushtagi

September, 2018 Research Mentor
 ACKNOWLEDGEMENT

I am deeply indebted to many people for the successful completion of this project . I
would like to take this opportunity and go on record to thank them for their help and
support . I am thankful to Mr Shanth Kumar,CA and to the Management of Kempfort
Mall Bangalore for all the support provided for this project .

I express my deep sense of gratuity and sincere feelings of obligation to my Project

Guide Mr Prashant Mustagi who has helped me in overcoming many difficulties and
who has imparted me the necessary conceptual knowledge .

I wish to thank all my teachers - for their helpful inputs - insightful comments -
steadfast love and support .

Date …............ Thanking You

Place …...............
 Chapter 1

Introduction

5
Concept of Tax :

Taxation is the inherent power of the state to impose and demand contribution from
people , properties , right etc, for the purpose of generating revenues for public welfare
purposes.Taxes are enforced proportional contributions from persons to property levied
by the law making body of the state by virtue of its sovereignty for the support of the
government and all public needs.

Brief History of Taxation :

Tax is today an important source of revenue for the government in all the countries .
More than 3000 years ago , the inhabitants of ancient Egypt and Greece used to pay tax
, consumption taxes and custom duties. Income tax was first introduced in India in 1860
by James Wilson who become Indians First Finance Member.

In order to meet the losses sustained by the government on account of military mutiny of
1857. In 1918 A New Income Tax bill was passed and which was further again replace in
1922. Finally, The Ministry of Law and Finance The Income Tax was Passed in 1961 and
brought came in force on 1st April 1962. and this is also known as the Financial Year in
Current Era. I e. ( 01.04.18 – 31.03.2019)

Taxation System :

Tax system of raising money to finance Government. All governments require payment of
money taxes from people.

Government use revenues to pay soldiers and police to build dams and roads, to operate
schools and hospitals, to provide food to the poor and medical care facilities etc and also
hundreds of other purposes without taxes to fund its activities, govt could not exist.

So, taxation is the most important source of revenues for modern government typically
90% of the revenue for government is obtained through taxes.

6
Why are Taxes Levied ?

The reason for levy of taxes is that they constitute the basic source of revenue to the
government. Revenue so raised is utilized for meeting the expenses of government like
defense, provision of education , health care, Infrastructure facilities like roads , dams
etc.

What are the Reasons for Taxation ?

1. Provide the basic facilities for every citizen of country.

2. Finance government multiple projects and schemes.

3. Protection of Life.

4. Responsibility of citizen to the Nation.

Meaning of Tax :

Tax can be defined in the following ways :

The compulsory payments made to governments associated with certain activities are
Called taxes

Tax in general, is the imposition of financial charge upon an individual or a company by

the govt of India or their respective state or similar other functional equivalents in a state.
The computation and imposition of the varied taxes prevalent in the country are carried
on by the Ministry of Finance Department of Revenue.

7
1.1 Background of Goods and Service Tax outside India

Goods and Service also known as the value added tax (VAT) or harmonized sales tax.
Following are some successfully implemented GST models in other countries:

1. France :

a. Rate of GST 19.6%

b. France was the first country to introduced GST in 1954.

World wide , almost 150 countries have introduced GST in one or the other form since
now. Most of the countries have a unified GST System. Brazil and Canada follow a dual
system vis a vis India is going to introduce . In china , GST applies only to goods and the
provisions of repairs , replacements and processing services.

2. Australia :

a. Rates of GST 10%

b. GST is administrated by the tax office on behalf of the Australian Government, and is
appropriated to the states and territories.

c. Every company whose turnover exceeds $ 75000 is liable for registration under
GST and in default 1/11th of the income and some amount is form of penalty.

3. Canada :

a. GST is imposed at 5% in Part ix of the excise tax act. GST is levied on goods and
service made in Canada except items that are either exempt or zero rated.

b. When a supplier makes a zero rated supply, he is eligible to recover any GST paid on
purchases but the supplier who makes a supply of exempt goods he is not eligible take
input tax credit on purchases for the purpose of making the exempt goods and services.

8
4. New Zealand :

a. Rate of GST 12.5%

b. Exceptions are rent collected on residential rental properties, donations and financial
services.

Historical Background of Goods and Service Tax in India :

 Amaresh Baghchi Report , 1994 suggests that the introduction of Value Added Tax
will act as root for implementation of Goods and Service Tax in india.

 Ashim Dasgupta, 2000 empowered committee, which introduces VAT system in

2005 which has replaced old age taxation system in India.

 Vijay Kelkar Task Force 2004, it strongly recommended that the integration of
indirect taxes in to the form of GST in India.

 Announcement of GST to be implemented by 1st April , 2010 After successfully

implementation of VAT system in India and suggestion various committees and
task forces on GST, the union government first time in union budget 2006-07
announced that the GST would be applicable from 1st April 2010.

 The Government has formed various joint working groups of state finance
ministers to study the impact of GST various states.

 The empowered committees of state finance ministers after various meetings

reached on amicable formula for implementation of GST in India.

 Task force of finance ministers has submitted their report in December 2009 on
structure of GST in India.
 In August , 2013 Standing committee on Finance tabled its report on GST Bill.

 In December, 2014 revised constitution Amendment bill was tabled in Parliament.

 On June 14, 2016 , the ministry of finance released draft model law on GST in
public domain for views and suggestions

9
Concept Of Goods and Service Tax (GST)

Introduction Of GST

The reference of GST was first made in the Indian Budget in 2006-07 by the Finance
Minister Mr. P. Chidambaram as a single centralized Indirect tax. The GST constitution
( 122nd ) Amendment Bill 2014 was introduced on December 19, 2014 and passed on
May 06, 2015 in the lok sabha and yet to be passed in the Rajya Sabha.

The bill seeks to amend the constitution to introduce Goods and Services tax vide
proposed new article 246 A. This article gives power to Legislature of every state and
parliament to make laws with respect to goods and services tax where the supplies of
goods or of service take place . Recently, Union Minister Mr. Arun Jaitley said that GST
could be implemented as early as January 1, 2016.

10
Meaning of Goods and Service Tax (GST)

Clause 366 (12A) of the constitution Bill defines GST as “ goods and service tax”
means any tax on supply of goods, or services or both except taxes on the supply of the
liquor for human consumption. Further the clause 366 (26A) of the Bill defines Services
means anything other than Goods.

Thus it can be said that GST is a comprehensive tax levy on manufacture , sale and
consumption of goods and services at a national level . The proposed tax will be levied
on all transactions involving supply of goods and services, except those which are kept
out of its preview.

Purpose of GST:

The Two Important Purposes of GST are followings:

Single Umbrella Tax Rate:

GST shall replace a number of indirect taxes being levied by union and state
government.

Removing Cascading Effect:

GST is intended to remove Tax on Tax Effect and provides to common national market
for Goods and Services.
Types Of Goods and Service Tax in India

11
Different Taxes that are covered under GST :

1. State taxes which will be subsumed in SGST :

a) VAT/ Sales Tax.

b) Luxury Tax.

c) Entertainment Tax (unless it is levied by local bodies)

d) Taxes on Lottery, betting, and gambling.

2. Central Taxes which will be subsumed in CGST :

a) Central Excise Duty.

b) Additional Excise Duty.

c) Service Tax.

d) The Excise duty levied under the medical and toilet preparation Act.

e) Additional Customs Duty.

f) Education Less.

g) Surcharges.

3. Taxes that will not be subsumed:

a) Stamp Duty.

b) Electricity Duty.

c) Other Entry taxes and Octori Entertainment Tax ( levied by local bodies.)

d) Basic Customs duty and safeguard duties on import of goods in to India.

e) Professional Tax.

12
Salient Features of GST

1. The salient features of GST are as under:

2. The GST would be applicable on the supply of goods or services as against the
present concept of tax on the manufacture and sale of goods or provision of
services. It would be a destination based consumption tax.

3. It would be a dual GST with the Center and States simultaneously levying it on a
common tax base.

4. The GST would apply to all goods other than alcoholic liquor for human
consumption and five petroleum products, viz. petroleum crude, motor spirit
(petrol), high speed diesel, natural gas and aviation turbine fuel. It would apply to
all services barring a few to be specified.Tobacco and tobacco products would be
subject to GST

5. The GST would replace the taxes which are subsumed in it as discussed in the
above page

6. The CGST and SGST would be levied at rates recommended by the GST Council

7. The list of exempted goods and services would be common for the Center and
the States which would be finalized by GST Council.

8. An Integrated GST (IGST) would be levied and collected by the Center on inter-
State supply of goods and services. Accounts would be settled periodically
between the Center and the States to ensure that the SGST portion of IGST is
transferred to the destination State where the goods or services are eventually
consumed.

9. Tax payers shall be allowed to take credit of taxes paid on inputs (input tax credit)
and utilize the same for payment of output tax. However, no input tax credit on
account of CGST shall be utilized towards payment of SGST and vice versa. The
13
 credit of IGST would be permitted to be utilized for payment of IGST, CGST and
SGST in that order.

10. HSN (Harmonized System of Nomenclature) code shall be used for classifying the
goods under the GST regime. It is being proposed that taxpayers whose turnover
is above Rs. 1.5 cores but below Rs. 5 cores shall use 2 digit code and the
taxpayers whose turnover is Rs. 5 cores and above shall use 4 digit code.
Taxpayers whose turnover is below Rs. 1.5 cores will not be required to mention
HSN Code in their invoices.

11. Exports shall be treated as zero-rated supply. No tax is payable on export of

goods or services but credit of the input tax related to the supply shall be
admissible to exporters and the same can be claimed as refund by them.

12. Import of goods and services would be treated as inter-State supplies and would
be subject to IGST in addition to the applicable customs duties. The IGST paid
shall be available as ITC for payment of taxes on further supplies.

14
Challenges of GST Implementation :

1. With respect to Tax Threshold

The threshold limit for turnover above which GST would be levied will be one area which
would have to be strictly looked at. First of all, the threshold limit should not be so low to
bother small scale traders and service providers. It also increases the allocation of
government resources for such a petty amount of revenue which may be much more
costly than the amount of revenue collected. The first impact of setting higher tax
threshold would naturally lead to less revenue to the government as the margin of tax
base shrinks; second it may have on such small and not so developed states which have
set low threshold limit under current VAT regime.

2. With respect to nature of taxes

The taxes that are generally included in GST would be excise duty, countervailing duty,
cess, service tax, and state level VAT among others. Interestingly, there are numerous
other states and union taxes that would be still out of GST.

3. With respect to number of enactments of statutes

There will two types of GST laws, one at a centre level called ‘Central GST (CGST)’ and
the other one at the state level - ‘State GST (SGST)’. As there seems to have different
tax rates for goods and services at the Central Level and at the State Level, and further
division based on necessary and other property based on the need, location, geography
and resources of each state.

4. With respect to Rates of taxation

It is true that a tax rate should be devised in accordance with the state’s necessity of
funds. Whenever states feel that they need to raise greater revenues to fund the
increased expenditure, then, ideally, they should have power to decide how to increase
the revenue.
5. With respect to tax management and Infrastructure
It depends on the states and the union how they are going to make GST a simple one.
Success of any tax reform policy or managerial measures depends on the inherent
simplifications of the system, which leads to the high conformity with the administrative
measures and policies.

15
Impact of Goods and Service Tax

I. Food Industry

The application of GST to food items will have a significant impact on those who are
living under subsistence level. But at the same time, a complete exemption for food items
would drastically shrink the tax base. Food includes grains and cereals, meat, fish and
poultry, milk and dairy products, fruits and vegetables, candy and confectionery, snacks,
prepared meals for home consumption, restaurant meals and beverages. Even if the food
is within the scope of GST, such sales would largely remain exempt due to small
business registration threshold. Given the exemption of food from CENVAT and 4% VAT
on food item, the GST under a single rate would lead to a doubling of tax burden on food.

II. Housing and Construction Industry

In India, construction and Housing sector need to be included in the GST tax base
because construction sector is a significant contributor to the national economy.

III. FMCG Sector

Despite of the economic slowdown, India's Fast Moving Consumer Goods (FMCG) has
grown consistently during the past three – four years reaching to $25 billion at retail sales
in 2008. Implementation of proposed GST and opening of Foreign Direct Investment
(F.D.I.) are expected to fuel the growth and raise industry's size to $95 Billion by 201835.

IV. Rail Sector

There have been suggestions for including the rail sector under the GST umbrella to
bring about significant tax gains and widen the tax net so as to keep overall GST rate low.
This will have the added benefit of ensuring that all inter – state transportation of goods
can be tracked through the proposed Information technology (IT) network

16
V. Financial Services

In most of the countries GST is not charged on the financial services. Example, In New
Zealand most of the services covered except financial services as GST. Under the
service tax, India has followed the approach of bringing virtually all financial services
within the ambit of tax where consideration for them is in the form of an explicit fee. GST
also include financial services on the above grounds only.

VI. Information Technology enabled services

To be in sync with the best International practices, domestic supply of software should
also attract G.S.T. on the basis of mode of transaction. Hence if the software is
transferred through electronic form, it should be considered as Intellectual Property and
regarded as a service. And if the software is transmitted on media or any other tangible
property, then it should be treated as goods and subject to G.S.T. 35 According to a
FICCI – Technopak Report. Implementation of GST will also help in uniform, simplified
and single point Taxation and thereby reduced prices.

VII. Impact on Small Enterprises

There will be three categories of Small Enterprises in the GST regime.

Those below threshold need not register for the GST

Those between the threshold and composition turnovers will have the option to pay a
turnover based tax or opt to join the GST regime.

Those above threshold limit will need to be within framework of GST Possible downward
changes in the threshold in some States consequent to the introduction of GST may
result in obligation being created for some dealers. In this case considerable assistance
is desired. In respect of Central GST, the position is slightly more complex. Small scale
units manufacturing specified goods are allowed exemptions of excise up to Rs. 1.5 Cr
ores. These units may be required to register for payment of GST, may see this as an
additional cost.

17
 Benefits of GST

(A) Make in India

i. Will help to create a unified common national market for India, giving a boost
to Foreign investment and “Make in India” campaign

ii. Will prevent cascading of taxes as Input Tax Credit will be available across goods
and services at every stage of supply;

iii. Harmonization of laws, procedures and rates of tax;

iv. It will boost export and manufacturing activity, generate more employment and
thus increase GDP with gainful employment leading to substantive economic
growth;

v. Ultimately it will help in poverty eradication by generating more employment and

more financial resources;

vi. More efficient neutralization of taxes especially for exports thereby making our
products more competitive in the international market and give boost to Indian
Exports;

vii. Improve the overall investment climate in the country which will naturally benefit
the development in the states;

viii. Uniform SGST and IGST rates will reduce the incentive for evasion by
eliminating rate arbitrage between neighboring States and that between intro and
inter-state sales;

ix. Average tax burden on companies is likely to come down which is expected to
x. Reduce prices and lower prices mean more consumption, which in turn means
more production thereby helping in the growth of the industries . This will create
India as a ” Manufacturing hub”.

18
(B) Ease of Doing Business

 Simpler tax regime with fewer exemptions;

 Reductions in the multiplicity of taxes that are at present governing our indirect
tax system leading to simplification and uniformity;

 Reduction in compliance costs - No multiple record keeping for a variety of taxes -

so lesser investment of resources and manpower in maintaining records;

 Simplified and automated procedures for various processes such as registration,

returns, refunds, tax payments, etc;

 All interaction to be through the common GSTN portal- so less public interface
between the taxpayer and the tax administration

 Will improve environment of compliance as all returns to be filed online,

input credits to be verified online, encouraging more paper trail of
transactions;

 Common procedures for registration of taxpayers, refund of taxes, uniform formats

of tax return, common tax base, common system of classification of goods and
services will lend greater certainty to taxation system;

 Timeliness to be provided for important activities like obtaining

registration, refunds, etc;

 Electronic matching of input tax credits all-across India thus making the
process more transparent and accountable

(C) Benefit to Consumers:

 Final price of goods is expected to be lower due to seamless flow of input tax
credit between the manufacturer, retailer and service supplier;
 It is expected that a relatively large segment of small retailers will be either
exempted from tax or will suffer very low tax rates under a compounding scheme
purchases from such entities will cost less for the consumers;

 Average tax burden on companies is likely to come down which is

expected to reduce prices and lower prices mean more consumption

19
GST SLAB and Structure Of GST Rates :

20
21
22
23
 Chapter 2

Literature Review

24
 Literature Review

The proposed GST is likely to change the whole scenario of current indirect tax system. It
is considered as biggest tax reform since 1947. Currently, in India complicated indirect
tax system is followed with imbrication of taxes imposed by unions and states separately.
GST will unify all the indirect taxes under as umbrella and will create a smooth national
market. Expert says that GST will help the economy to grow in more efficient manner by
improving the tax collection is it will disrupt all the tax barriers between states and
integrate country by single tax rate.

GST was first introduced by France in 1954 and now it is followed by 140 countries .
Most of the countries followed unified GST while some countries like Brazil , Canada
follow a dual GST system where tax imposed by central and state both. In India also dual
system of GST is proposed including CGST and SGST .

Dr. R. Vasanthagopal (2011) , Conducted a study on , “ 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 positive step in becoming 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 [2]

According to Torgler (2011) , tax morale is important to taxpayer awareness. On the

other hand, research by Tekeli (2011) using multiple regression analysis show that tax
morale has insignificant relationship on tax awareness. A Tekeli (2011) conclusion is
supported study by regarding cause and consequences of tax morale.

Research by Mustapha and Palil (2011) , stated that the influence of compliance
behavior towards individuals’ awareness has been proven in various researches. From
the findings of Razak and Adafula (2013); Santi (2012) they found that taxpayers’
awareness is significantly associated with tax compliance and this is also supported by
study Jatmiko (2006).

25
Djawadi and Fahr ( 2013) , This study is pointed out that knowledge about tax is
important to increase the thrust of authorities and citizens.The researcher used
structure equation modelling to examine the relationships between tax awareness
and tax knowledge and researcher found that tax knowledge has positive
relationship with tax awareness . Hence, taxpayers will be more aware about tax
system when they have knowledge and understanding towards the tax system.

Pinki , Supriya Kamma and Richa Verma ( July 2014) studied, “ Goods andService
Tax “ Panacea for indirect tax system in india “ and concluded that the new NDA
government in india is positive towards implimentation of GST and it is beneficial for
central government , state government and as well as for consumers in long run if its
implimentation is backed by strong it infrastructure.
Agogo Mawuli (May 2014) studied , “ Goods and Service Tax An Appraisal “ and found
that GST is not good that low income countries and does not provide broad based growth
to poor countries. If still countries want to implement GST then the rate of GST should be
less than 10 % for growth.

Boonyarat et al. (2014), the researcher used Structure Equation Modelling (SEM) to
examine the relationships between tax awareness and tax knowledge and the researcher
found out that tax knowledge has positive relationship with tax awareness. Hence,
taxpayers will be more aware about tax system when they have knowledge and
understanding towards the tax system.

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.

International Journal of Scientist research and management (2014) , Girish Gargh

Assistant Professor from PGDAV College University of Delhi has published paper
titled”Basic Concepts and Features of good and service tax in India. In this paper he has
given the outline of GST and what does this tax system wants to achieve with threats and
challenges opportunities that the free market economy can bring.

Mohammad Ali Roshidi (2016) , conducted a study on “ Awareness and perception of

tax payers towards Goods and Service Tax implementation. The study attempts to find
out what level of awareness and perception to GST taxpayers in Malaysia. This study
only consist of 256 civil service servants of the secondary school teachers in the kaula
26
kangsar, Perak. Data collected using questionnaire. The result shows that moderate and
majority of respondents give a high negative perception to the GST. The eventually
causes the majority of respondents did not accept implementation of GST in Malaysia.

International Journal of innovative studies in sociology and humanities (2016) , A

study on impact of GST after implementation Milan-deep Kour and his co-authors
Assistant Professor from Eternal University himachal Pradesh talks about the impact of
GST and implementation of it, its benefit and challenges. He also emphasizes that GST
is going to change things in current situation .

Shakwipee ( 2017) , A study conduct on the inquring the level of awareness towards
GST among the small business owners in Rajasthan State, found that the main areas to
be focused include training errors and computer software availability.

Vineet Chauhan (2017) , Conduct a study on “ Measuring Awareness about

implementation of GST.” A study survey of small business unit of Rajasthan State in
India. The study seeks to evaluate the awareness of the business owners about GST
difficulties they face to encase of the current awareness about it. 148 small business
owners were analyses in order to identify the awareness about GST from Rajasthan
state and the kind and extent of relief provided and the implementation of the provision
under GST Law.

Times of India (26 July, 2017) Page no 1&17 it is stated that Sweet makers are
confused with fixing the tax for their products as the ingredients used in the sweets are
taxed separately as rawmaterial and as finished goods the products its taxing is different
Example Plain burfi is 5% taxed but chocolate burfi is fixed with 28%. Plain burfi mixed
with other dry fruits is of 12%. This taxing system makes the Sweet makers to get
confused on how much GST to be fixed for which product.

Times of India dated ( 27 July , 2017) , stated that the GST implication across different
places for the same product has wider differences which the consumers are unaware,
resulting them in surprise. Example A Rasamalai sold in counter at a shop is taxed with
5% but if it is served in the hotel it is taxed with 18% this has resulted in difference of
consumers shopping to purchase the similar products.

27
 Chapter 3
Research Methodology

28
Research Methodology :

Research is a logical and systematic search for new and useful information on a
particular topic. Research methodology is a systematic way to solve a problem. It is a
science of studying how research is to be carried out. Essentially, the procedures by
which researchers go about their work of describing , explaining and predicting
phenomenon are called research methodology.

About my Research Problem :

The present research is exploratory in nature. Since GST is a new phenomenon in India,
there are hardly any studies in this area. Specially there is a huge gap of empirical and
behaviour studies on GST in India. The study tries to find the significance of popular
perception regarding GST.

Problem Statement:

The title of Project Report: A Study on GST Implementation and Customers Perception
towards Goods and Service Tax in Bangalore, Karnataka State. The problem statements
were framed to assess the customer perception about GST.

Manufacturer to wholesaler taxing on total bill for the product sold Ÿ Wholesaler to
distributor taxing on total bill for the product sold Ÿ Distributor to Retailer taxing on total
bill for the product sold Ÿ Retailer to Consumer itemized / total bill taxing for the product
bought

Need of Study :

The Need of study is to fill the gap that has been identified in the previous researchers.
Under this study we know that how much level of understanding the GST and Perception
towards GST as well as traders, taxpayers are concerned by GST.

Scope of the Study :

This study is conducted to find out the views of consumers in Bangalore, Karnataka and
to know about their expenditure pattern and the variation. The respondents selected are
of mixed group which will give wider difference in understanding. The scope of the study

29
is limited only to the concerned area of study which cannot be justified for any other
place.
Objectives of Study:

➢ To Analysis customers perception regarding Goods and Service Tax (GST).

➢ To Asses Customers view regarding importance of GST in Bangalore, Karnataka.

➢ To find out the perception and their views on newly implemented taxation system.

Research Design:

A good research design has characteristics viz, problem definition , time required for
research project and estimate of expenses to be incurred the function of research design
is to ensure that the required data are collected and they are collected accurately and
economically. A research design is purely and simply the framework for a study that guide
the collection and analysis data. In this project the two basic types of research design are
used :

➢ Exploratory Research :

All research projects must start with exploratory research . This is a preliminary phase
and is absolutely essential in order to obtain a proper definition of problem in hand. The
major emphasis on the discovery if ideas and insights . The exploratory study is
particularly helpful in breaking broad and vague problems in to smaller, more precise sub
problem statements . Exploratory research is also used to increase the familiarity with the
problem under investigation.

➢ Descriptive Research :

It is the design that one simply describe something such as demographic characteristics
of people . The descriptive study is typically concerned with determining frequency with
which something occurs or how two variables vary together. A descriptive study requires
a clear specification of who, what, when and why apex of the research . It requires
formulation of more specific hypothesis and the testing these through statically inference
technique.

30
This is the research design of the study and then it comes to develop the research

plan , which means that what to do before going for the actual interpretation and it is

discussed below .

➢ Developing a Research Plan :-

The present research is exploratory in nature. Since GST is a new phenomenon in India,
there are hardly any studies in this area. Specially there is a huge gap of empirical and
behavior studies on GST in India. The study tries to find the significance of popular
perception regarding GST.

The data for this research project has been collected through self Administration . Due to
time limitation and other constraints direct personal interview study method is used . A
structured questionnaire was farmed as it consumes less time duration and is very
important from the point of view of information , easier to tabulate and interpret . More
ever respondents prefer to give direct answer. For accomplishing the objective of study,
both Primary and Secondary data have been used.

Classification of Data :

The correct information is the key to success. Data information is of two types ; Primary
Data and Secondary Data. Primary data is information collected by researcher or person
himself where is secondary data is collected by other but utilized or used by researcher .
Data can be classified under two categories depending upon source utilized . These
categories are :

➢ PRIMARY DATA

➢ SECONDARY DATA

31
1. Primary Data : The study is largely based on the primary data which has
been collected through the structured Questionnaire Method.

Using Primary Data Collection Tool :

Questionnaire:-

The data has been collected by administering a structured schedule of questions. The
questions are generally framed by 5 point Likert Scale and answers by respondents are
recorded in the form of Agree , Disagree , Neutral, Strongly Agree and Strongly disagree.

The Questionnaire has been prepared to study the customer perception towards the
Goods and Service Tax in Bangalore, Karnataka, Kempfort Mall.
For the present study purpose, questionnaire method is used to collect the primary data .
This questionnaire is self administrated questionnaire

Secondary Data :

This type of data has already been collected by someone else and has already
passed through statistical process.

For this study Primary Data and Secondary data both has been used for research topic.

RESEARCH INSTRUMENTS:

QUESTIONNAIRE

A questionnaire is a research instrument consisting of a series of questions and other

prompts for the purpose of gathering information from respondents . Although they are
often designed for Statistical Analysis of the responses.

RESEARCH PLAN :

Data source: Primary data

Research Approach: Survey

Research Instrument: Questionnare

Method of contacts: Personal interaction

Sample size: 50 respondents

32
Tools of Analysis:

Mathematical Tools

In the present research work, simple mathematical tools are used. In this method
percentage and simple average has been used for analysis and interpretation of data.

A Percentage frequency distribution is a display of data that specifies the percentage of

observations that exist for each data points. It is particularly useful method of expressing
the relative frequency of survey responses and other data.

Percentage Method :

It was used to draw specific inferences from the collected data that fulfil the
objective of the study

The formula used was :

P = Q/ R * 100

P = Reading in Percentage

Q= Number of respondents falling in specific Category to be measured

R = Total Number of respondents or it is the population.

Limitations of Study:

This study too has its limitations that limits the applicability and validity of study which lim
are as below:

1. The sample size is small and cannot be applied to the entire population

2. GST is newly launched tax system so some inherent complications faced by the people
have noit been specifically captured, however an attempt has been made to address
the specific problem statements as per the research objectives

33
 Chapter 4

Data Analysis & Interpretation

 DATA ANALYSIS & INTERPRETATION

Data Analysis

The data collected various respondents have to analysis for the drawing conclusion . So
in this chapter efforts have been made to analysis and interpret the collective data
towards perception of customers on “ Goods and Service Tax '' through questionnaire.

First of all the collected data have been presented in tabular form and there after it is
analyzed with the help of percentage and then the interpretation is given based on the
responses obtained from the respondents and my own understanding of the research

A brief description of the problem statements , analysis and interpretation is given below
Table No. 4.1
An attempt has been made to classify the respondents on the basis of their response
regarding the statement “ GST has increased the various legal formalities”

Table No. 4.1

No. of
SL No Response Respondents Percentage(%)

1 Strongly Agree 21 42

2 Agree 21 42

3 Neutral 7 14

4 Dis Agree 1 2

5 Strongly Disagree 0 0

Total 50 100

Sources Data collected from primary sources through questionnaire method.

Interpretation:

Above Chart shows that the majority of the respondents felt that GST has increased
various legal formalities because the respondents in this case felt that the government
has come up with a three-pronged approach: interest, monetary penalties, and
prosecution to encourage compliance with India's new GST tax regime.Compared to
earlier tax laws (i.e., Excise Duty, Service Tax, VAT), the GST tax regime contains a
substantial increase in the maximum penalty levied because of which reason
respondents could not easily evade taxes and bypass the compliance procedures.
Table No 4.2 An attempt has been made to classify the respondents on the basis of
their response regarding the statement “GST has increased the Tax burden on Tax
payers''

Table No. 4.2

No. of
Sl No. Response Respondents Percentage(%)

1 Strongly Agree 8 16

2 Agree 16 32

3 Neutral 15 30

4 Dis Agree 11 22

5 Strongly Dis agree 0 0

Total 50 100

Sources Data collected by Primary sources through the questionnaire method

Interpretation:
From the above table, it can be inferred that respondents felt that GST has increased
the tax burden because the respondents in this instant case were Service providers
YLG (Beauty salon) which fell in the 18% tax bracket.18% tax is quite substantial and
certainly a matter of concern for tax payers who paid only 14% service tax before GST,
as a reason of which there is considerable fall in the customer base which could affect
the business of the beauty and salon service providers.
Table No 4.3 An attempt has been made to classify the respondents on the basis of
their response regarding the statement “GST is very difficult to understand”.

Table No. 4.5

No. of
Sl No. Response Respondents Percentage (%)

1 Strongly Agree 6 12

2 Agree 18 36

3 Neutral 15 30

4 Dis agree 10 20

5 Strongly Dis agree 1 2

50 100

Sources Data collected by Primary Sources through questionnaire method .

Interpretation:
Around 48% respondents feel that the certain provisions of GST are ambiguous which in turn
require expert advice.The respondents in this case were the shoppers in central mall
bangalore. The mall was running 51% off on clothing and apparel section, the apparels were
subject to MRP act so the price should bear MRP tag. GST is inclusive of all taxes but the
mall collected the taxes separately over and above discounted sale price. When the issue is
reported to the mall management team, they opined that they were justified in levying such
tax. However,courts have to pass relevant judgement on this issue which is pending.
Table No. 4.4
An attempt has been made to classify the respondents on the basis of their perception
regarding this statement “GST will increase the inflation the country”

Table No. 4.4

No. of
Sl No. Response Respondents Percentage(%)

1 Strongly Agree 9 18

2 Agree 6 12

3 Neutral 17 34

4 Dis agree 14 28

5 Strongly Dis agreed 4 8

Total 50 100

Sources Data collected from Primary sources through questionnaire method .

Interpretation:

In this case the majority of the respondents have taken a neutral stance about this particular
problem statement. The possible reason for this view according to my research is as follows:
In India, while the CPI basket does not show an adverse impact of GST on inflation, we must
not ignore the fact that tax on services, which is a big chunk of our GDP, is increasing.
Overall, GST impact on inflation could be somewhere between neutral to a marginal increase
in the short-term.
In Table No 4.5 An attempt has been made to classify the respondents on the basis of
their response regarding the statement “GST is beneficial in the Long Term”.

Table No. 4.5

No. of
SL No. Response Respondents Percentage (%)

1 Strongly Agree 8 16

2 Agree 25 50

3 Neutral 14 28

4 Dis Agree 3 6

5 Strongly Dis agree 0 0

Total 50 100

Sources: Data collected from Primary sources by questionnaire method.

Interpretation:
From the above figure and table it is concluded that 50% respondents feel that GST is
beneficial in Long Term. The reason according to my understanding of the GST Tax
regime is as follows:
Rate of GST is not the only indicator of final price on goods and services. The essence
of GST is that all goods and services be taxed at moderate rate. So in the long run it is
expected that the burden of GST on common man will be reduced although some
complexities were prevalent in the initial days of the proposed GST levy
Table No 4.6
An attempt has been made to classify the respondents on the basis of their perception
regarding this statement “GST is affecting Small scale Businessman very badly”
Table No. 4.6

No. of
Sl No. Response Respondents Percentage (%)

1 Strongly Agree 9 18

2 Agree 10 20

3 Neutral 25 50

4 Dis agree 6 12

5 Strongly Dis agree 0 0

Total 50 100

Sources Data collected from Primary Sources through questionnaire method

Interpretation:

The result for this problem statement is hypothetical because the responses obtained were
subjective and are based on the business practices of the small business entities. However,
according to my understanding based on the research design I would opine that:

Since the GST is extra money that you need to pay, it could have a slight negative effect on
profitability. There is the option to raise your prices to cover the amount of the tax, but with
that, the risk of losing your loyal customers is more.

However, on the positive side,GST has done away with the confusing differentiations
between goods and services.This will go a long way in reducing tax-evasion opportunities.
"GST requires every tax-paying entity to self-assess tax and file its returns on a monthly and
an annual basis. Returns are to be filed electronically, which will reduce errors and lapses."
Table No 4.7 An attempt has been made to classify the respondents on the basis of
their perception regarding the statement “Will the GST impact Purchasing Power of
customer which would intern affect the service providers”

Table No. 4.7

No. of
Sl No. Response Respondents Percentage(%)

1 Strongly Agree 8 16

2 Agree 12 24

3 Neutral 11 22

4 Dis Agree 19 38

5 Strongly Dis Agree 0 0

Total 50 100

Sources Data collected from Primary Sources by questionnaire method .

Interpretation:

In this case the respondents who are exclusively providing services like entertainment zones
and service providers belonging to hair salon and spa segment agreed to the fact that GST
impacted the purchasing power of the consumers because they fell into the tax bracket of
18% as compared to only 14% during the service tax regime.

However people who provided composite services were benefited because of single tax
structure and compliance procedures, so the respondents of this category denied the fact
that GST affected the purchasing power of the consumer.

Table No. 4.8

An attempt has been made of classify the respondents on the basis of their response
regarding the statement “GST is a good method to replace the sales and services
tax”

Table No. 4.8

No. of
Sl No. Response Respondents Percentage (%)

1 Strongly Agree 13 26

2 Agree 14 28

3 Neutral 12 24

4 Dis Agree 9 18

5 Strongly Dis Agree 2 4

Total 50 100

Interpretation:

In the instant case majority of the respondents i.e. 54% feel that GST is a very good tax
reform to replace sales and service tax because:
GST, which will replace the State VAT, Central Excise, Service Tax and a few other indirect
taxes will be a broad-based, single, comprehensive tax levied on goods and services. And
also the compliance burden of the tax payers reduced drastically because of which they
could save the part of working capital which otherwise would have been spent on compliance
with other Indirect tax laws.

Table No 4.9 An Attempt has been made to classify the respondents on the basis of
their response towards the statement “The newly implemented GST confused the
Customers”

Table No 4.9

No. of
SL. No. Response Respondents Percentage (%)

1 Strongly Agree 9 18

2 Agree 9 18

3 Neutral 13 26

4 Dis Agree 17 34

5 Strongly Dis Agree 2 4

Total; 50 100

Sources Data collected from Primary Data through questionnaire method.

Interpretation:
This is a specific case where the respondents were selling the products with high discount
margins, and the GST was collected above the discounted price which is constitutionally not
valid as MRP is inclusive of prices, however revenue authorities are justifying the actions of
the people who levy additional GST on discounted prices, therefore in this case respondents
have agreed to the fact that some GST provisions confused the customers.
Table No. 4.10 An attempt has been made to classify the respondents on the basis of
their response towards the statement “GST encourage individuals to save part of
their Income in the form of tax benefits”

Table No. 4.10

No. of
Sl No. Response Respondents Percentage (%)

1 Strongly Agree 0 0

2 Agree 24 48

3 Neutral 14 28

4 Dis Agree 05 10

5 Strongly Dis Agree 7 14

Total 50 100

INTERPRETATION:
The respondents for this statement belonged to food industry who provide food along with air
conditioned facilities, the majority of them felt that GST promotes savings because food
industry is one major sector which got immensely benefited because of the fact that they fall
in 5% tax bracket as compared to 14% under the Service Tax laws before GST roll out.
 Chapter 5

Summary

Findings

Suggestions

Conclusion

References
 Chapter 5

SUMMARY , FINDINGS & CONCLUSION

Summary of the study :

This project report helped me to get deeper understanding of the “ Customers
Perception towards the Goods and Service Tax” ( GST) in Bangalore city, Karnataka.

The main focus of this study was to asses the perception of customers regarding the
Goods and Service tax in Bangalore city, Karnataka. The study is structured of five
chapters namely Introduction , literature review, research methodology , Data analysis
and interpretation and last one is summary and conclusion .

First chapter covers the introduction of the taxation system , background of GST outside
India and also within India.Concept of GST,Types of GST,Structure of GST,Impact of
GST in different Sectors and How To file the GST return , GST slab and Benefits of GST.

The Second Chapter i.e. Literature Review includes more than 20 Studies of different
researchers which are carefully analysed and used in this research.

Third Chapter i.e.research methodology highlights the problem statement , scope of

study , need of study, objectives of study, research design,Sampling design,Sample
technique and sample size and data collection methods and limitations of study.

The fourth chapter, i.e. In Data analysis and interpretation part efforts have been made to
analyse the data with the help of mathematical tools such as percentage method . Data
are show in Tables form which responses from respondents have been elicited,
percentage is calculated for the responses and then it is interpreted based on my
understanding of research objectives
Findings of The Study:

After Analysis and Interpretation of the data the following findings were emerged

 Most of respondents perception are very positive towards the GST and they
are aware of GST through the mass media.

 Also 56 % respondents are of the opinion that GST is a very good tax reform in
India and it is the turning point of the taxation system

 Most of the customers feel GST is very beneficial in Long Term for the economy
and also it will affect the GDP in a positive way.

 Maximum 50% respondents opined that GST has increased the various
Legal formalities.

 Majority of the people are of the opinion that they still need more clarity on
certain provisions of GST which are ambiguous and can lead to compliance
burden of the tax payers

 Most of the respondents feel that GST is a fair taxation system and also it is
predominantly a compliance tax
Recommendations:

The customers suggested that there should be a smooth, transparent and simple
transition provisions which is easily understandable so that the legal formalities will be
reduced.

Special training should be given to all officers, professionals and assesses so

that the obvious misfits are eliminated and there shall be less litigation cases.

The people are not well informed about the compliances procedures as a result of which
they need expert opinion of professionals which will add to their cost structure.Therefore
the government should come out with proper guidelines on the procedures as to how to
comply with the GST rules and regulations

CONCLUSION:

This study highlighted the overall overview of customers’ perception of GST in Bangalore
city of Karnataka state.The central and state governments to put in more efforts to ensure
that consumers have a clear understanding of GST provisions and develop a positive
perception towards GST leading to its acceptance which in turn brings more number of
taxpayers into the tax bracket.
 REFERENCES

www.gstindia.com

computax.up.nic.in

www.gstn.org

www.cbec.gov.in

www.financialexpresss.com

www.gstcounsil.gov.in

www.taxman.com

www.cleartax.in

ICAI publications on GST Implementation

Sharma Publication “Concept of Tax, Structure of Tax, Indian Taxation System''

Kothari C.R. 2nd Edition (2004) Research Methodology.

BDU study material “Research methodology”