A

GRAND comprihansive PROJECT REPORT

ON
“A study on various provisions of GST & its impact on traders”

Submitted To
PARUL UNIVERSITY
In Partial Fulfillment of The
Requirement of the award for the degree of
Bachelor of Business Administration

Under the Guidance of:

Prof. Mahendra Patel

PARUL INSTITUTE OF BUSINESS ADMINISTRATION

BBA Programme
Affiliated to Parul University , Vadodara
April 2018
 Institute’s certificate

This is to certify that this project report titled “A study on Various Provision of GST & Its impact on
traders” is the bonofied work of below mentioned students who carried out the research under my
supervision. I also certify further that to the best of my knowledge the work reported herein does not
form parts of any other project report or dissertation on the bases of which a degree or award was
conferred on an earlier occasion on this or any other candidate .
University Seat (Enrolment
Sr.No Student Name no) Signature
No.
1 Funny .H. Patel

2 Pratibha .R. Shah

3 Darshita S. Variya

4 Hansha .L. Thakor

5 Hiral .A. Rathva

6 Pallavi .G. Jaguri

7 Mamta .R. Waghela

8 Unnati .U. Patel

Prof. Mahendra Patel Prof. Shantanu Chakravarty

(Assistant Professor) (Institute Head)

STUDENT’S DECLARATION

We, hereby declare that the report for Grand project entitled “A study on various provision of GST &
its impact on traders” is a result of our own work and our indebtedness to other work publications,
references, if any, have been duly acknowledged.

Place: Vadodara

Date:
 Sr.No Student name Enrollment No. Signature

1 Funny .H. Patel 150613101086

2 Pratibha .R. shah 150613101125

3 Darshita S. Variya 150613101156

4 Hansha .L. Thakor 150613101149

5 Hiral .A. Rathva 150613101111

6 Pallavi .G. Jaguri 150613101034

7 Mamta .R. Waghela 150613101160

8 Unnati .B. Patel 150613101097

PREFACE

Theoretical knowledge gives us basic idea about how to approach for certain things but it does not
tell us what practical things are involved while we are in the field ,so in order to give some practical
exposure to reach the project program in which student get expose to research in the field .

On the same trend in order to complete BBA we had done project on “analysis of various provision
of GST & its impact on traders “.
This study aims to know the impact of GST on traders.

Need to add or modification require

Right now ignore it
ACKNOWLEDGEMENT

The success of project report would not hint at any one individual, but it was a consolidated effort on
the part of all who contributed to this project report.

We are thankful to Prof. Shantanu Chakravarty, Principal of Parul Institute of Business

Administration to permit us and for providing us guidance & the opportunity to gain both theoretical
& practical knowledge in the field of finance as a part of finance & extending there full support .we
are also thankful to Prof. Mahendra Patel Assistant Professor, who have also guide us to achieve our
desired goal and in completion of report. We are also thankful to all those who directory and
indirectly contribute in completion of our project report.
 SUMMARY

Not needed right now

Summary of whole report and your comment with reference to what you learn and studied
SR.NO. TOPICS PAGENO.
Certificate
Institute’s Certificate
Students’ Declaration
Preface
Acknowledgement
Summary
1 Chapter 1
Introduction
2 Chapter 2
Literature Review
3 Chapter 3
Research methodology
- Introduction of research
- Types of research
- Approaches of research
- Sampling
- Types of sampling
- Sample unit
Area of research

Add chapter ;: Data analysis

Recommendation and
Suggestion
Conclusion
References
Or bibliography
Questionnaire

TABLE OF CONTENT
INDEX OF TABLE AND GRAPH
Not neede right now
 INTRODUCTION

India is the hub of taxes where people pay many taxes which create confusion for them. Presently
we pay two types of taxes i.e. Direct and Indirect in various sectors. Direct Tax paid directly to the
government by the taxpayer i.e. Income Tax, Wealth Tax, and Corporation Tax. Indirect Tax is a tax
levied on goods and services rather than on income or profits. It is not directly paid to government
but collected from intermediaries (such as retail stores) from the person who bears the ultimate
economic burden of the tax (such as consumers). The intermediary later files a tax return and
forwards the tax proceeds to government with the return for example Sales Tax, VAT, Excise Duty,
and Custom Duty and so on.

GST is a blanket of Indirect Tax that will subsume several indirect state and federal taxes such as
Value Added Tax (VAT) and Excise Duty and different State Taxes, Central Surcharges,
Entertainment Tax, Luxury Tax and many more. GST was firstly introduced in France in 1954, with
introduction of GST France became the first country ever to introduce GST. Its introduction was
requiring because very high sales taxes and tariffs encourage cheating and smuggling. After France it
was adopted by 165 nations. Now, India has also adopt it. After its implementation in India, India
will become 166th nation to adopt it. the finance minister P. Chidambaram, had announced the target
date for implementation of GST on 1 April, 2010. The Constitution (122nd Amendment) Bill was
introduced in the Lok Sabha by Finance Minister Arun Jaitely, on 19th December 2014, and passed
by the house on 6th May 2015. The bill was passed by Lok Sabha on August 2016. The bill, after
ratification by the States, received assent from President Pranab Mukherjee on 8th September 2016.
GST bill is brought for the reason that the different taxes paid by us on different rates would be
brought under one roof so that all the taxes may get cancelled and only one tax is paid which is GST.
Goods and Services Tax (GST) will include one tax one nation; this statement was given by the
honorable Prime Minister Mr. Narendra Modi of India. In today’s scenario we pay 30% to 35% tax
on different things but with GST it will be only 18%, which shows it will be beneficial. the GST
replace the following taxes :
 Those which are levied by Central Government:
1. Central Excise duty.
2. CVD (Counter Vailing Duty). Additional duties of customs.
3. SAD(Special Addition Duty) i.e. Special Additional duty of customs.
4. Service tax.
  Those which are levied by State Government:
1. VAT (Value Added Tax)
2. Sales Tax
3. Entertainment Tax
4. Tax on gambling and betting

 Journey of GST
The GST journey is gain in year 2000 when a committee was setup draft law. It took 17 years from
the law to evolve. In 2017 the GST bill was passed in Lok sabha and Rajya Sabah. On 1stjuly 2017
the GST law came into force

How GST Works?

GST will be imposed on manufacturing, sale and consumption of goods and services rendered at
national level. According to Indian Government, they will opt for Dual System GST, which means
tax will be collected and levy by Centre and State. Imposing of tax and collected at Centre level will
be CGST (Central Goods and Services Tax), and other, which will be levy and collected at State level
will be SGST (State Goods and Services Tax).

If we talk about GST, it is imposed on value added on goods and services at each stage while sale
and purchase. What our present system says? It states that initially there is set off of taxes to be paid,
means that every seller recover tax from buyers, which ultimately put burden of taxes to those who
are end users( customers), of goods and services.

Let’s see the example and clearly understands, that how will GST work:

Suppose, in Distribution Channel, there are 3 people: Manufacturer, Wholesalers and Retailers.
Assume, that Manufacturer of Shirt buys raw material like cloth, buttons, threads and other necessary
things that is required to stitch the shirt, and it costs around Rs 200, included 10% tax of Rs 20. Now,
shirt is ready and manufacturer added his own value to the material, say Rs 60. Then the total cost of
shirt is RS 260 and tax for this will be Rs 26 (as 10% tax rate). Now, under GST taxation,
manufacturer will only pay Rs 6 (as Rs 20 he has initially paid, so Rs 26- Rs 20 = Rs 6).

Next we move on to second stage, where Wholesaler buys the shirt from manufacturer for Rs 260
and to make profit, he will keep a profit, say Rs 40. Now the total cost for shirt is Rs 300. Tax rate
would be same as mentioned above (10%), tax amount will be Rs 30. Earlier Rs 26 tax amount
already paid in first stage, so he need not to pay again and under GST, it will be calculated as : Rs 30
– Rs 26 = Rs 4 for wholesaler.

Final stage comes of Retailer, wherein retailer got the shirt from wholesaler at the cost of Rs 300, as
he also wants to earn profit, so he added margin of Rs 20. Total Price for Shirt comes out to be Rs
320 and 10% tax rate is charged, so tax would be Rs 32. In stage second, Rs 30 already paid as tax,
so tax incidence would be Rs 32 – Rs 30 = Rs 2.

Benefits of GST
The Goods and Services Tax (GST) is imposed on the supply of products and/or services within the
country. It subsumes multiple indirect taxes that are imposed by the State Governments or the
Central Government, such as Service Tax, Purchase Tax, Central Excise Duty, Value Added Tax,
Entry Tax, Luxury Tax, Local Body Taxes, etc.

GST offers benefits to the government, the industry, as well as the citizens of India. The price of
goods and services is expected to reduce under the new reform, while the economy will receive a
healthy boost. It is also expected to make Indian products and services internationally competitive.
Following are some of the main benefits of GST

Uniformity in Taxation: The objective of GST is to drive India towards becoming an integrated
economy by charging uniform tax rates and eliminating economic barriers, thereby making the
country a common national market. The subsuming of the aforementioned State and Central indirect
taxes into just one tax will also provide a major lift to the Government’s ‘Make in India’ campaign,
as goods that are produced or supplied in the country will be competitive not only in national
markets, but in the international ones as well. Moreover, IGST (Integrated Goods and Services Tax)
will be levied on all imported goods. IGST will be equal to State GST + Central GST, more or less,
thus bringing uniformity in taxation on both local as well as imported goods.

Cascading of Taxes: The cascading of taxes will be prevented by GST as the whole supply chain
will get an all-inclusive input tax credit mechanism. Business operations can be streamlined at each
stage of supply thanks to the seamless accessibility to input tax credit across products or services.

Common Portal: Since technology will be used heavily to drive GST, taxpayers will have a
common portal (GSTN). The procedures for different processes like registration, tax payments,
refunds, returns, etc., will be automated and simplified. Whether it is the filing of returns, filing of
refund claims, payment of taxes, or even registration, all processes will be done online via GSTN.
The verification of input tax credit will be done online too, and input tax credit across the country
will be matched electronically, thereby turning the process into an accountable and transparent one.
As a result, the process will also be much quicker since the taxpayer will not have to interact with the
tax administration.
Common Procedures: The procedures for refund of taxes and registration of taxpayers will be
common, while the formats of tax return will be uniform. The tax base will also be common, as will
the system of assortment of products or services in addition to the timelines for each activity, thereby
ensuring that taxation systems have greater certainty.

Helping Government Revenue Find Buoyancy: GST is forecast to help the Government
Revenue find buoyancy by expanding the tax base whilst enhancing the taxpayer compliance. The
reform is also expected to improve the country’s ranking so far as the ‘Ease of Doing Business Index’
is concerned. To add to it, it is also estimated to enhance the GDP by 1.5% - 2%.

Simpler and Lesser Number of Compliances: Compliance will be simpler through the
harmonisation of tax rates, procedures, and laws. Synergies and efficiencies are expected across the
board thanks to common formats/forms, common definitions, and common interface via the GST
portal. Inter-state disputes such as those on e-commerce taxation and entry tax that currently prevail
will no longer cause concerns, while multiple taxation on the same transactions will also be removed.
Compliance costs will also reduce as a result. The previous tax regime had service tax and VAT, and
they both had their own compliances and returns. GST will merge them and lower the number of
returns as well as the time spent on tax compliances. GST has around 11 returns under it. Four of
them are basic returns that are applicable to all taxable entities under GST. Although the number of
returns could increase, the main GSTR-1 shall be manually populated, while GSTR-2, GSTR-3,
AND GSTR-4 shall be auto-populated.

Regulation of Unorganised Industries: Certain sectors in the country, such as textile and
construction, are highly unorganised and unregulated. GST aims to ensure that payments and
compliances are done online, and input credit can only be availed when the supplier accepts the
amount, thus ensuring that these industries have regulation and accountability.

Lowered Tax Burden on Industry and Trade: The average tax burden on industry and
trade is expected to lower because of GST, resulting in a reduction of prices and increased
consumption, which will eventually increase production and ultimately enhance the development of
various industries. Domestic demand is set to increase and local businesses will have greater
opportunities, thus generating more jobs within the country.
Composition Scheme: Small businesses can find respite from tax burdens through the
composition scheme. Small businesses that earn turnovers ranging from Rs.20 lakh to Rs.50 lakh
will be subject to lower taxes.
These are some of the main benefits offered by GST. In the following sections we shall take a brief
look at the advantages of the regime to the consumer, the central and state governments, and
businesses and industry.
Disadvantages of GST

 According to the experts, terms such as GST which includes CGST, SGST, and IGST is nothing
but just a new name in accordance with the existing tax systems. Kind of old wine in a new
bottle.

 The Service Tax which stood at 15% in the previous regime, has now been replaced with GST at
18%. As such many services have become costlier with telecom, airline and banking affected
majorly. In fact, insurance and petroleum are also said to be majorly affected by the enactment of
GST Tax.

 The GST Act has given the control of businesses to Central and State Governments with
businessmen binding by-laws. This has given rise to complexity for many businessmen across the
nation.

 Post GST implementation, the first few instances of application have resulted in high tax outgo
for businesses. Businesses are trying to claim the credit of input tax but several cases of
mismatch of data are coming up. As a result, there is chaos among the tax filers.

 The opposition has called it as a Disability Tax as many of the things related to disabled people
which were earlier tax-free are now included in GST taxation. Prior to implementation of GST,
brail paper, typewriter, hearing aid and motorized wheelchair were tax-free whereas these things
are being taxed now. The opposition has made pleas to roll back the tax on such items.

 On one end, the government is trying to give a push to banking services and insurance in India
and on the other end, the government has decided to tax banking and insurance service at higher
rates when compared to the previous rates.

 GST has also had an impact on discount and reward programs as well. The product is being taxed
on the rates pre-discount whereas the products were earlier taxed at post discount prices. Most of
the companies have also suspended reward programs for temporary basis because of complexities
of GST.

 The government has chosen a mid-year launch for GST and this will lead to problems in taxation
and reporting during the end of the financial year. Ideally, the government should have launched
 GST at end of financial year as this would have avoided a lot of confusion during taxation and
reporting.

Benefits to business and industry

Industry will avail the maximum benefits of GST as the reform would not only contribute
significantly to its rapid growth, but it would also contribute to a 2% increase in the GDP. By
subsuming numerous taxes, GST would make the taxation system easier for businessmen by helping
them avoid the filing of several different taxes and reducing hassles.

Since GST will operate on an advanced IT platform, all GST-related issues will be addressed online,
thereby ensuring ease and transparency in GST payments. Moreover, GST clubs various indirect
taxes under one umbrella and eliminates cluster in the calculation of taxes. A single rate and a single
mechanism will prevail across India, thereby helping in ensure that there is no overlapping of taxes.
For instance, if the GST rate applicable to a certain product is 20% and a consumer purchases it for
Rs.200, the GST amount would be 20% of Rs.200 = Rs.40. The overall GST amount paid by all three
entities, viz. the manufacturer, the wholesaler, and the retailer will never be more than Rs.40. As a
result, the tax applicable to the retailer as per the previous system will be waived off and he can save
money on tax. The same applies to manufacturers and wholesalers as they would all have paid GST
on the same commodity, thereby providing relief on each other’s tax burden.

GST helps in decreasing transaction costs, which in turn make it easy to improve business, wich
eventually increases competition within the industry. An increase in competition will also help in
generate more jobs as newer businesses are established across industries. Exporters and
manufacturers can also reap the benefits of GST as most of the state and central taxes would no
longer be applicable to products and services, and there will be no more levy of Central Sales Tax
either. Lowered costs in the Indian industry will mean that Indian exports will receive a major boost,
therefore making Indian goods and services more competitive in international markets.
Benefits to central and state government

Since all indirect taxes charged by the state governments and the central government will be
subsumed by GST, it will become simpler to administer the taxation system, especially because of
the presence of a robust IT system. Evading GST will become almost impossible due to the use of an
advanced IT platform, thereby promoting the payment of taxes.

The cost of collecting taxes will decrease significantly with the implementation of GST, thereby
resulting in higher revenue efficiency. GST will also end the duplication of indirect tax collection,
and it would also lower the cost of revenue collection, thereby benefitting both, the state
governments as well as the central government.

Benefits of customer

A good number of products and/or services are either exempt from tax or charged at 5% or less under
GST, thereby making daily necessities more easily available to the poor. Small traders will find
themselves on a level playing field thanks to a simplified tax structure with fewer exemptions.
Products and services will be allowed to move freely across the country, thus resulting in increased
competition between manufacturers and businesses which will eventually benefit consumers. Items
such as movie-ticket prices, two-wheelers, televisions, stoves, washing machines, SUVs and luxury
cars, two-wheelers, etc. will be cheaper.

Since there will be no overlapping of taxes, there will be a big reduction on the overall tax on a
commodity, thereby leading to lower prices. The overall tax burden on most goods, as a result, will
also reduce, therefore benefitting the consumer.
Registration

GST registration is mandatory for any entity that engages in the supply of goods and services within
India. The bill for the implementation of GST was approved by Prime Minister of India,
NarendraModi, so that indirect taxes imposed by the central and state government could be
subsumed under one single tax. Here is simple procedure to complete GST registration from comfort
of our home
 Log on to www.gst.gov.in
 The menu a top the page has a tab called ‘services’, click on it and you will get three options-
‘registration’, ’payments’, and ‘User services’.
 Click on ‘registration’ and choose ‘new registration’ to start with part A of the registration
process.
 A new page will open and here you will be require to select some status as a GST practioner
or a taxpayer.
 A few details will then have to be entered in the form, such as the legal name of the business,
the district and state in which the business is locate, email address, mobile number,
permanent account number, etc.
 The portal will then verify your details and you will receive a One time password for
confirmation.
 Enter the OTP in the OTP verification window and click on ‘proceed’.
 The system will generate a temporary reference number which will be displayed on the
screen.
 1The temporary reference number will have to be used to login to Part B of the registration
process
 Enter the temporary reference number along with the captcha code to start with Part B of the
registration process.
 ‘My saved Application‘ will appear on a new page and you have to click on the ‘Edit’ icon
under the ‘Action ‘ icon.
 You will be redirected to the registration application form with different tabs, such as
business details, Authorised Signatory , Promoter/Partners ,
Authorized Representative, Principal Place of Business, , Additional Places of Business ,
Bank Accounts , Goods and Services, State Specific Information and Verification . You will
have to click on each of the aforementioned tabs to enter the required information .
 Next, enter the information related to the commodity before you select ‘Save and continue’.
 You will then have to fill in information regarding your bank account and then upload the
relevant documents.
 You will then be redirected to the verification tab were the details you have sent for the
verification are displayed. You will be required to put your digital signature on the application
 after you have filled it up. Digital signature can be put using EVC, E-Signature, or Digital
Signature Certificate. Companies and LLPs can use only Digital Signature Certificate.
 Hit the ‘Submit’ option and the updated details and documents will be saved.
 Hit ‘Proceed’ and you will be redirected to a pop-up window where you will have to click on
‘Sign’.
 Once you have signed the form, you can submit it so that an acknowledgment can be sent to your
registered mobile number and email in the form of the application reference number.
 A GST officer will then verify your application number to determine whether it can be approved
or rejected. If your application is rejected, you will have to provide some more information or
documents until the authorities are convinced to approve your application.

People who do not pay GST or do not make the full payment shall be liable to a penalty of 10% of
the tax amount, subject to a minimum of Rs.10,000. Offenders who deliberately evade paying taxes
will be levied with a penalty of 100% of the tax amount. However, genuine errors will attract a
penalty of 10% of the tax due.
  List of items exempted under GST

The Goods and Services Tax (GST) in India was implemented on July 1, 2017. Even after two
months of GST roll out, there is much confusion on what products come under GST and what not.

Here is the list of products that are kept outside the purview of GST
Tax
ITEMS
Rate
Milk
Eggs
Curd
0% Lassi
Unpacked Food grains
Unpacked Paneer
Gur
Fresh Vegetable
Sugar
Tea
Edible Oils
Domestic LPG
Nuts
5% Milk food for Baby
Fabric
Spices
Coal
Life Saving Drugs
Butter
Ghee
12% Almonds
Fruit juices
Hair Oil
18% Tooth Paste
Soap
Pasta
Corn Flakes
Small Car
AC
28% Fridge
Washing Machine
And many other Durable goods
Components of GST

There are 3 taxes applicable under GST: CGST, SGST, and IGST
 CGST: Collected by Central Government on an intra-state sale.
 SGST: Collected by State Government on an intra-state sale.
 IGST: Collected by Central Government on an inter-state And two other taxes.
 UTGST: collected by central Government on every intra UT supply of goods and services
Compensation tax: levied to compensate loss due to GST application.

TRADERS

Trade: A business or occupation for profit, particularly in retail or wholesale or requiring special
mechanical skill to exchange one thing for another, which includes money for goods, and favors for
goods or money.

Trader:-A trader is a person or entity in finance who buys and sells financial instruments like
Bonds, Stock, Mutual fund etc... In the capacity of agents and Speculators.

Impact of GST on Traders

The introduction of Goods and Services Tax (GST) is a landmark in India’s taxation regime. GST is
hyped to simplify doing business in India, allowing supply chains to be integrated and aligned, as
well as allowing for greater transparency. Here’s understanding in a little more detail, how life will
change for a trader post GST.

Positive Impact on Traders:

 Increased Threshold Limit for Registration:-

Post GST, a unified threshold limit of INR 10 lakhs for special category states (Uttarakhand),
Himachal Pradesh, Sikkim and the 7 NE states) and INR 20 lakhs for rest of India has come. This
especially helps start-ups and new businesses, who can leverage on the increased limit, to
concentrate more on setting up the business, rather than take the tension of compliance in the early
days.
  Increased Composition Levy:-
The composition threshold limit has increased from INR 50 lakhs to INR 75 lakhs, while that for
Special Category States remained at INR 50 lakhs. For any trader, this extra margin of INR 25 lakhs
is definitely a huge positive sign, as all he would need to pay is a floor rate of 1% GST computed on
his turnover or 5% GST if he is running a small restaurant. Also, the government may further
increase the threshold limit of 75 lakhs to a maximum of 1 crore.

 Availability of ITC for Excise:-

Earlier, a trader was not eligible to take Input Tax Credit (ITC) for excise, which is ultimately passed
on by him as cost to his buyer, leading to increased costs. Post GST, the cascading effect of taxes will
be eliminated as CGST will be levied as an equivalent of excise. Since the full credit of input CGST
will be available, there will be an unrestricted flow of ITC across the chain. An SME can thus utilize
the same to off-set his tax liability with a single registration.

 Availability of ITC for Input Services / Business Expenses:

Post GST, the concept of “furtherance of business” has been introduced, whereas a trader can avail
ITC on services utilized in the course of business such as advertising services, promotions etc. This
boosts his profitability and impacts positively on his working capital as well.

 Full and Immediate ITC on Purchase of Capital Goods:

Post GST, the treatment of capital goods and goods for trade becomes the same, and full ITC will be
available on the purchase of capital goods itself. The noteworthy exemption is motor vehicles on
which ITC cannot be availed, unless used for providing taxable services such as transport of
passengers or goods on motor vehicles.

 Opening up of Markets across India:

In the GST regime, IGST replaced CST, thus placing both inter-state and local traders on the level
playing field. Another advantage is the removal of entry taxes, as goods cross state borders. This
ensures that good quality products being manufactured in one part of the country will find markets in
the farthest part of the country – opening up India as a common market for all traders.
Negative Impact on Traders.

 Blockage of ITC due to Non-Compliance by Supplier:

Post GST, compliance in general and ITC is dependent on invoice level information – as invoice
matching will be the key to avail the correct ITC. One of the genuine concerns hitting the trader
under GST, will be the scenario of non-payment of tax by his supplier. As per the GST law, a
recipient will get his due ITC, only if his supplier has uploaded all the correct sales invoices, which
is matched and acknowledged by the recipient; and, any missing purchase invoices uploaded by the
recipient are also matched and acknowledged by the supplier. In short, if a supplier chooses to
default, this will lead to loss of ITC for the trader. However, traders can potentially avoid such
scenarios, by effective vendor management in advance – identifying vendors who will be compliant,
and keeping a watch out for credit rating before doing business with any entity.

 Stock Transfer becomes a Taxable Event:

Post GST, stock transfer has become a taxable event. While the tax paid will be available fully as
credit and there will be no need for credit reversals. This impacts the working capital. This is
because, for the tax paid on the date of the stock transfer, the ITC is available only when the stock is
liquidated by the receiving branch. Thus, in case the logistics planning is poor, leading to
overstocking at branches, working capital will be blocked for a long time – a direct challenge for
SMEs who operate with thin working capital. With the seamless availability of credit on inter-state
purchase and effective removal of state business boundaries going forward, there could be a potential
reduction in the number of branches / warehouses – as they would exist solely for operational
reasons rather than for compliance. This could lead to reduction in stock transfers, which nullifies the
impact of stock transfer on the working capital of a trader.

Compliance Activity and Costs:

Post GST, the depth for 37 returns per year (3 monthly and 1 annually) is more, as all transactions
will need to be matched and filed accurately for the right compliance to happen, and the right ITC to
be availed. The complexity increases if one has operations across states, since each state will require
a separate registration. Traders must invest in the right GSTsoftware and technology to ensure that
the work gets done accurately and on time.

Overall, GST is good for the trading community. As long as a trader smartly manages his business
ecosystem, efficiently manages his supply chain and stays GST compliant – he will continue to reap
benefits under GST. However, technology will surely be a game-changer in this regard, as this will
be the only way the compliance burden of GST can be effectively absorbed, translating into more
business benefits for the Indian trader.
Types of traders:-

 Wholesaler
 Retailer
 Importers
 Exporters

Wholesaler:-
Person or firm that buys large quantity of goods from various producers or vendors, warehouses
them, and resells to retailers, wholesaler to carry only non-competing goods or lines are called
distributors.

Retailer:-
A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who
normally sell their goods to another business.

Importer:-
For customs purposes, the party who makes (or on whose behalf an agent or broker makes) the
import declaration, and who is liable for the payment of duties (if any) on the imported goods.
Normally, this party is named either as the consignee in the shipping documents and/or as the buyer
in the exporter's invoice.
Exporter:-
For customs purposes, the party who makes (or on whose behalf an agent or broker makes) the
export declaration. The exporter sells its goods to someone in another country, known as the
importer.

LITERATURE REVIEW
Pinki, Supriya Kamma and Richa Verma (July 2014) studied, “Goods and Service Tax-
Panacea For Indirect Tax System in India” and concluded that the new NDA government in India is
positive towards implementation of GST and it is beneficial for central government , state
government and as well as for consumers in long run if its implementation is backed by strong IT
infrastructure. [ CITATION Pin14 \l 16393 ]

Ehtisham Ahmed and Satya Poddar (2009) studied, “Goods and Service Tax Reforms and
Intergovernmental Consideration in India” and found that GST introduction will provide simplier
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.[ CITATION Eht09 \l 16393 ]

Brew, (2012)
The authors have studied the relation between the modes of collection of VAT revenues with the
target of VAT collection for the municipality of Tarkwa – Nsuaem in West Ghana. The
authors have used questionnaires and interviews to collect the data and then analysed it using the
regression analysis and established that the methodof VAT collection in the said municipality was
above average. The study is important because VAT is one of the primary revenue generators for any
Government.[ CITATION Bre12 \l 16393 ]

Ciobanasu (2012)
The authors trace the correlation between the types of taxes and their role in the budgeted revenues
and the fiscal development of Romania. Indirect tax by its very nature is easier to govern, is neutral
to status of tax payer, and increases revenue but leads to inflation. On the other hand direct taxes
depend on the tax payer and are difficult to Govern. Further, indirect tax helps the government to an
extent to direct consumption of the public. The authors conclude that both the taxes are important for
overall growth of the economy.[ CITATION Cio12 \l 16393 ]

Nitin Kumar 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.
Kumar (2014) studied: “goods and services tax- A way forward” and concluded that after
implementation of GST in India many indirect taxex will be finished and their will be only one tax
i.e GST which is expected to encourage unbiased tax structure

Anushuya and Narwal (2014) studied, “ Application of CGE modals in GST” and concluded
that both CGE and GST are famous all over the world but GST is the powerful concept in the field of
indirect taxes.

Bikas, (2013) The authors have studied the VAT rate and the EU economy and also the link between
the VAT and macroeconomic indicators and their influence on the VAT rate. The authors conclude
that there is a positive relation between macroeconomic indicators like GDP, per capita income and
consumption, export ,import etc and the VAT rate applicable.[ CITATION Bik13 \l 16393 ]

Neha and Manpreet Sharma describes about GST in their research paper “A
Study on goods and services Tax in India “. They tried to find out the benefiets of GST and current
status of GST in India.according to them we are moving towards GST due to fault in our current
indirect tax structure. Our current indirect tax structure is unable to increase the competitiveness of
industries. Both the authors’ emphasis on the benefiets of GST

Dr. G. Sunitha and P. Satischandra broadly discussed about GST in their

research paper titled “ Goods and services Tax (GST): As a new path in tax reforms in Indian
economy “. The authors have tried to explain the concept of GST and different models of GST. They
also focused on the impact on GST on Indian markets. According to them the current tax structure is
the main hurdle for growth of Indian Economy .new Tax structure of GST will remove the hurdles
and boosts the Indian Economy.

Dhanda (2015) studied, “GST in India: A Key Tax Reform” and concluded that due to dissilent
environment of India economy, it is demand of time to implement GST.

Chaurasiaetal(2016) Studied, “Role of Goods and Services Tax in the growth of Indian
economy” and concluded that in overall GST will be helpful for the development of Indian economy
and this will also help in improving the Gross Domestic Products of the country more than two
percent.

RESEARCH METHODOLOGY START WITH NEW PAGE

The research paper is an attempt of exploratory research based on the secondary data sourced from
journals, Internet, articles, previous paper. Looking into requirements of the objective of the study
the research design employed for the study is of descriptive type. Keeping in the view of the set
objectives, this research design was adopted to have greater accuracy and in depth analysis of the
research study. Available secondary data was extensively used for the study. The investigator
procures the requirement data through secondary data.

Research Scope
This research has been conducted to get an idea of how GST is going to affect retailers and
wholesalers. This study can help companies to understand the problem and needs of retailers and
wholesalers in GST implementation.
 Types of Research:
It can be broadly categorized into two categories.

Fig.: Difference between Fundamental Research and Applied Research

(1). Fundamental Research:

1. It is a based on the question ‘Why things happen’?

2. This research is conducted largely for the enhancement of knowledge, and is research which
does not have immediate commercial potential.
3. The research which is done for human welfare is called basic, pure, fundamental research.
4. The main motivation here is to expand man's knowledge, not to create or invent something.
 5. Fundamental researchdoes not usually generate findings that have immediate applications in
a practical level.
6. Fundamental research is driven by curiosity and the desire to expand knowledge in specific
research area.
7. This type of research makes a specific contribution to the academic body of knowledge in the
research area.
8. Fundamental researches mainly aim to answer the questions of why, what or how and they
tend to contribute the pool of fundamental knowledge in the research area.

The following are examples for fundamental researches in business:

An investigation into the main elements of brands and branding, a study of factors impacting each
stage of product life cycle

(2). Applied Research:

It is a based on the question ‘how things happen’? Applied research “aims at finding a solution for an
immediate problem facing a society, or an industrial/business organization, whereas fundamental
research is mainly concerned with the formulation of a theory”
1. Applied research is designed to solve practical problems of the modern world.
2. The goal of applied research is to improve the human condition.
3. It focuses on analysis and solving social and real life problems.
4. This research is generally conducted on a large scale basis and is expensive.
5. As such, it is often conducted with the support of some financing agency like the national
government, public corporation, World Bank, UNICEF, UGC, Etc.
6. According to Hunt, “applied research is an investigation for ways of using scientific
knowledge to solve practical problems”

The following are examples for applied research:

Improve agriculture crop production, treat or cure a specific disease, improve the energy efficiency
of homes, offices, how can communication among workers in large companies be improved.

WHICH METHOD YOU FOLLOW????

SAMPLING:
It is statistical method of obtaining representative data or observations from a group (lot, batch,
population, universe).

Sampling can be explained as a specific principle used to select members of population to be

included in the study. It has been rightly noted that “because many populations of interest are too
large to work with directly, techniques of statistical sampling have been devised to obtain samples
taken from larger populations.”

WHICH SAMLPLING TECHNIQUE OF METHOD ARE APPLIED AT WHAT

The Main Characteristics of Sampling

In sampling, we assume that samples are drawn from the population and sample means and
population means are equal. A population can be defined as a whole that includes all items and
characteristics of the research taken into study. However, gathering all this information is time
consuming and costly. We therefore make inferences about the population with the help of samples.

Types of Sample:

Probability Sampling: In probability sampling every member of population has a known chance
of participating in the study. Probability sampling methods include simple, stratified systematic,
multistage, and cluster sampling methods.

 What is each and how is it done?

 How do we decide which to use?
 How do we analyze the results differently depending on the type of sampling?
 Simple Random Sampling: A simple random sample (SRS) of size n is produced by a
scheme which ensures that each subgroup of the population of size n has an equal probability
of being chosen as the sample.

 Stratified Random Sampling: Divide the population into "strata". There can be any number
of these. Then choose a simple random sample from each stratum. Combine those into the
overall sample. That is a stratified random sample. (Example: Church A has 600 women and
 400 women as members. One way to get a stratified random sample of size 30 is to take a
SRS of 18 women from the 600 women and another SRS of 12 men from the 400 men.)

 Multi-Stage Sampling: Sometimes the population is too large and scattered for it to be
practical to make a list of the entire population from which to draw a SRS. For instance,
when the a polling organization samples US voters, they do not do a SRS. Since voter lists
are compiled by counties, they might first do a sample of the counties and then sample within
the selected counties. This illustrates two stages. In some instances, they might use even more
stages. At each stage, they might do a stratified random sample on sex, race, income level, or
any other useful variable on which they could get information before sampling.

(which technique you have used)

Non-probability Sampling: In non-probability sampling, on the other hand, sampling group
members are selected on non-random manner, therefore not each population member has a chance to
participate in the study. Non-probability sampling methods include purposive, quota, convenience
and snowball sampling methods.

Why don't we use non-probability sampling schemes? Two reasons:

 We can't use the mathematics of probability to analyze the results.

 In general, we can't count on a non-probability sampling scheme to produce
representative samples

SAMPLE UNITS:

 A sampling unit can refer to any single person, animal, plant, product or ‘thing’ being
researched
 In the context of market research, a sampling unit is an individual person.
 The term sampling unit refers to a singular value within a sample database.
 For example, if you were conducting research using a sample of university students, a
single university student would be a sampling unit.
 Another example of a sampling unit could be if you were conducting online
research with 50 households, one household would be a singular sampling unit.
 Sampling units are taken from an entire population, such as a country, customer
database or region, and put into a smaller group to form a research sample.
  This group of units is then used to research, analyze and draw conclusions on.

Research Area:
Area of research is Vadodara

Research design
The research would be descriptive, emphirical as well as analytical. The design would be based on
the objectives of the study .
Data in relation to provisions for taxing of financial services would be collected from the existing
law. The data collected through the questionnaires will be subject to further statistical methods of
analysis.

Sampling
All assesses, students, accountants, tax professionals related to the financial sector are the
population. The different members selected are around 1000 in number will form the sample. The
sample of 1,000 individuals who will be asked to fill the questionnaires.

Tools for data collection

The study involves collection of both primary and secondary data. Primary data is being collected by
using structured questionnaire.
Secondary data is collected through existing legislations, proposed legislations on GST floated in
public domain, published/ unpublished reports on GST impact in India and globally, various websites
on GST and financial services.

Data analysis & Methods of reporting

The data collected will be reported using text, pie diagrams for successful understanding.

Utility of the Research

A good tax system would ensure that the country’s resources are utilized in an most advantageous
manner and the country is competitive in the global trade. In this regard , GST in India would ensure
that with seamless ITC the cost will come down for both the business people and the consumers. It
would lead to an increase in the GDP of the country and proficient use of all the factors of
production.
Further, financial services sector supplies average 50% of the total demand in an economy and
contributes to almost 20% of the indirect taxes Indian economy.
Hence the study of the existing system with the pros and cons , the impact of GST on the said
financial sector, the difficulties in administrative compliance in the sector and examination of views
of accountants in this relation is pertinent.

QUESTIONNAIRE (MUST BE AT LAT AS ANNEXUTERE)

We student of B.B.A. from parul university – B.B.A. dept. as per our curriculum
we are conducting this research project titled “A study on various provision of
GST & it’s impact on traders”.
We kindly request you to give your honest opinion in this regard. also we oblige
to you about the privacy of the information so reveled by you would be solely
used for academic purpose only and the information sourced would not be
disclosed under any circumstances without the identify and permission of the
concerned person.

PERSONAL INFORMATION:

Name:- ___________________ Gender:- _________________

Age:- ____________________ Type of business:- _______________

Q-1 you think all businesses need to be registered under GST regime?
Yes ( ) No ( )

Q-2 Which system do you think is more beneficial?

( ) VAT
( ) Goods & Service tax
( ) Traditional tax

Q-3 Do you think GST is Burdon on trades for business ?

Yes ( ) No ( )

Q-4 Do you think implementing GST will cause higher lead to increase price of goods and
service?
Yes ( ) No ( )

Q-5 Which payment procedure trade use to pay GST?

( ) Credit card/Debit card
( ) RTGS
( ) Cheque / Cash at bank
( ) Online Banking

Q-6 What are your annual turnover?

( ) less than 20,00,000
( ) 20,00,00 - 50,00,000
( ) 50,00,000 - 70,00,000
( ) More than 70,00,000
Q-7 Do your business registered under GST?
Yes ( ) No ( )

Q-8 Do you get credit of IGST paid at the time of importing domestic liability?
Yes ( ) No ( )

Q-9 How much GST you pay?

( ) 0% - 5%
( ) 5% - 10%
( ) 10% - 20%
( ) 20% - 28%

Q-10 Due to GST the profit margin of traders affect?

Yes ( ) No ( )

Q-11 Do you think after GST implementation price of your commodities are increased?
( ) Strongly Agree
( ) Agree
( ) Neutral
( ) Disagree
( ) Strongly Disagree

Q-12 Most common problem faced by you are ?

GSR Rate ( ) Filing GST Return ( )
Billing ( ) Record maintain ( )

Q-13 Which reason influence you to avoid or remove GST of ?

Critical tax method ( ) Profitability ( )
GST Return ( ) Tax Rate ( )
 Data Analysis and interpretation

1_ Gender of respondents

Male 79 79
 Female 21 21%

Total 100 100%

Female; 21%; 21.00%

Male
Male; 79%; 79.00% Female

INTERPRETATION

In our Survey, we have selected 100 respondent. Out of which 79% of Male engaged in trading
Business and only 21% of Female are working or doing business as trader.

2_Age Of Respondents

Responden
Age t Percentage
 18-25 3 3%
26-35 21 21%
36-45 19 19%
More than 45 57 57%
100 100%

Analysis :- The above table says that there are only % respondent are at the age of 18 to 25, 21%
respondent at the age of 26 to 35, 19% are at the age of 36-45, and 57% respondent are more than 45
age.

18-25; 3%; 3.00%

26-35; 21%; 21.00%
18-25
45+; 57%; 57.00% 26-35
36-45; 19%; 19.00%
36-45
45+

Interpretation: - Majority of the respondents are in the age of 45 and more the well experience
traders. And the minority is at 18-25 as at this age people had not entered into business.

Q-1) Do you think all businesses need to be registered under GST regime?

Rates Respondent Percentage

 Yes 77 77%

No 23 23%

Total 100 100%

Yes; 77

No; 23

Analysis and Interpretation: - Here the table and chart describe about the percentage of
people ready for the registration. 77% of people favour about the need for registration. Where rest
23% think as there is no need for registration. Majority people are in favour with the registration,
while other may be having turnover less than 20lakh.

Q-2) Which system do you think is more beneficial?

responden Percentag
Taxes
t e
Vat 37 37%
Goods and Service 57 57%
Traditional Tax 6 6%
Total 100 100%

Goods &
Service; 57%

VAT; 37%

Traditional
Tax; 6%

Analysis and Interpretation: - Here the table and chart shows that how many respondents
think which system is more beneficial. In our survey we find that there are 57% respondent thinks
that goods and service is more beneficial than other taxes. And traditional taxes are least beneficial.

Q-3) Do you think GST is Burdon on trades for business ?

Responden
Rates t Percentage

Yes 48 48%

No 52 52%

Total 100 100%

 NO; 52%; 52.00% YES; 48%; 48.00%
YES
NO

Interpretation: - The table shows that 52% feels GST is not a burden. And 48% says it’s a
burden.GST is a burden as small traders entrepreneurs are not able to roll out of the new law.

Q4) Implementing GST will cause higher lead to increase price of goods and
service?

Responden
Rates t Percentage

Yes 48 48%

No 52 52%

Total 100 100%

Analysis: Table shows us that 48% people believe that gst will create higher price of goods and
service. And 52% believe that price won’t get higher due to GST.

NO; 52%; 52.00% YES; 48%; 48.00%

YES
NO