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Why GST For India, Challenges for Success in India an Analysis..


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Presently, the tax structure of India is very complex. Looking to the global developments and tax structure of developed countries. Here we are providing complete details for Why GST For India and GST – Challenges for Success in India. In this article you can find complete details regarding GST in India, Meaning of GST In India, Salient Features of GST

Basic Challenges In The Implementation of GST

  1. Uniformity
  2. Increase in compliance cost for business
  3. Avoidance of cascading effect cornerstone of GST– Seamless Credit– But I ‘See less credit”
  4. RCM pressure
  5. legal restrictions
  6. Discretionary disallowance
  7. Exemption/ threshold may distort RNR & GST
  8. Effectiveness of GST Council and adherence to its recommendations
  9. Efficacy of GSTN
  10. Tax administration no mention in any policy docs. [refer Shome Committee’s 1st Report, 2014]

Why GST For India

Presently, the tax structure of India is very complex. Looking to the global developments and tax structure of developed countries, GST is the need of the hour. The need of GST can further be explained in the following points:-

  • There are various definitional issues related to manufacturing, sale, service, valuation etc. arises. These needs to be rationalized.
  • Several transactions take the character of sales as well as services, thus there is complexity in determining the nature of transaction.
  • The mechanism of imposing taxes, exemptions, abatements, other benefits are different in state and centre
  • Existing law has resulted in significant number of issues related to interpretation or various provisions and the category of the products and the nature of services.
  • Administration mechanics of the centre and state and even in different states is different.
  • India needs comprehensive levy and collection on both goods and services at the same rate with the benefit of input credit
  • A simple tax structure can bring greater compliance, thus increasing number of tax payers and in turn tax revenues of Government.
  • GST will ensure competitive pricing. Tax paid by final consumer will come down in most cases. Lower prices will help in boosting consumption which is beneficial to Companies.
  • GST will ensure boost to exports. When the cost of Production falls in the domestic market, Indian Goods and services will be more pricecompetitive in foreign markets
  • The current state of Indian Economy demands fiscal consolidation and reduction in Fiscal deficit. A recent Report By CRISIL states that GST is the country’s best bet to achieve fiscal consolidation.
Tax rates Items

Nil Rate – 0 Percent

  • No tax will be imposed on items like fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Si door, stamps, judicial papers, printed books, newspapers, bangles, handloom etc


  • Items such as fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats will attract a tax of 5 percent.


  • Frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhujia, namkeen
  • Ayurvedic medicines, tooth powder, agarbatti, colouring books
  • picture books, umbrella, sewing machine, and cellphones will be under 12 per cent tax slab.


  • Most items are under this tax slab which include flavoured refined sugar
  • pasta, cornflakes, pastries and cakes, preserved vegetables
  • jams, sauces, soups, ice cream, instant food mixes, mineral water
  • tissues, envelopes, tampons, note books
  • steel products, printed circuits, camera, speakers and monitors.

28 %

  • Chewing gum, molasses, chocolate not containing cocoa
  • waffles and wafers coated with chocolate, pan masala, aerated water, paint
  • deodorants, shaving creams, after shave, hair shampoo
  • dye, sunscreen, wallpaper, ceramic tiles, water heater
  • dishwasher, weighing machine
  • washing machine, ATM, vending machines
  • vacuum cleaner, shavers, hair clippers
  • automobiles, motorcycles, aircraft for personal use
  • and yachts will attract 28 per cent tax – the highest under GST system.