Project Laika

A study on impact of GST on Textile Industry
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Chapter 1
Introduction of Impact of GST on Textile Industry
Synopsis
1.1 Meaning
1.2 History of GST.
1.3 Evolution of GST.
1.4 Tax Structure before GST.
1.5 When did GST start?
1.6 Decision taken by GST council.
1.7 Goods and Service Tax Network.
1.8 Key features of GST regime.
1.9 Features of GST.
1.10 Benefits.
1.11 Drawbacks.
1.12 Criticism.
1.13 GST Rates.
1.14 Payment Procedure under GST.
1.15 Why is GST needed in India?
1.16 Textile Industry.
1.17 Impact of GST on Textile Industry.
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1.1 Meaning of GST:
The Goods and Services Tax (GST) is a value-added tax levied on most goods and
services sold for domestic consumption. The GST is paid by consumers, but it is imposed
by the Government on businesses selling the goods and services. In effect, GST provides
revenue for the government.
Goods and Services Tax (GST) is an indirect tax (or consumption tax) imposed in India
on the supply of goods and services. GST is imposed at every step in the production
process, but is meant to be refunded to all parties in the various stages of production other
than the final consumer.
Goods and services are divided into five tax slabs for collection of tax - 0%, 5%, 12%, 18%
and 28%. 32% However, Petroleum products, alcoholic drinks, electricity, are not taxed
under GST and instead are taxed separately by the individual state governments, as per
the previous tax regime.[citation needed] There is a special rate of 0.25% on rough
precious and semi-precious stones and 3% on gold. In addition a cess of 22% or other
rates on top of 28% GST applies on few items like aerated drinks, luxury cars and
tobacco products. Pre-GST, the statutory tax rate for most goods was about 26.5%, Post-
GST, most goods are expected to be in the 18% tax range.
The goods and service tax (GST) is an indirect federal sales tax that is applied to the cost
of certain goods and services. The business adds the GST to the price of the product and a
customer who buys the product pays the sales price plus GST. The GST portion is
collected by the business or seller and forwarded to the government. It is also referred to
as Value-Added Tax (VAT) in some countries. GST has been introduced to replace
multiple indirect taxes levied by State and Central Governments in order to simplify the
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indirect tax system. GST has replaced almost 17 of the existing state and central indirect
taxes (more to come in the future) such as central excise duty, additional customs duty,
VAT, entertainment tax, service tax etc.It is called as Goods and Services Tax because it
is applicable on the supply of both Goods and Services.
Most countries with a GST have a single unified GST system, which means that a single
tax rate is applied throughout the country. A country with a unified GST platform merges
central taxes (e.g. sales tax, excise duty tax, and service tax) with state-level taxes (e.g.
entertainment tax, entry tax, transfer tax, sin tax, and luxury tax) and collects them as one
single tax. These countries tax virtually everything at a single rate.
The tax rates, rules and regulations are governed by the GST Council which consists of
the finance ministers of centre and all the states. GST is meant to replace a slew of
indirect taxes with a federated tax and is therefore expected to reshape the country's 2.4
trillion-dollar economy, but not without criticism. Trucks' travel time in interstate
movement dropped by 20%, because of no interstate check posts.
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1.2 History of GST in India:
● 2004: In India, the idea of adopting GST was first suggested by the Atal Bihari
Vajpayee Government in the year 2000. The state finance ministers formed an
Empowered Committee (EC) to create a structure for GST, based on their
experience in designing State VAT. Representatives from the Centre and states
were requested to examine various aspects of the GST proposal and create reports
on the thresholds, exemptions, taxation of interstate supplies, and taxation of
services. The committee was headed by Mr. Asim Dasgupta, the finance minister
of West Bengal. Mr. Dasgupta chaired the committee till 2011.
● 2004: A task force that was headed by Mr. Vijay L. Kelkar, the advisor to the
finance ministry, indicated that the existing tax structure had many issues that
would be mitigated by the GST system.
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● February 2005: The finance minister, Mr. P. Chidambaram, said that the medium-
to-long term goal of the government was to implement a uniform GST structure
across the country, covering the whole production-distribution chain. This was
discussed in the budget session for the financial year 2005-06.
● February 2006: The finance minister set 1 April 2010 as the GST introduction
date.
● November 2006: Mr. Parthasarthy Shome, the advisor to the finance minister,
mentioned that states will have to prepare and make reforms for the upcoming
GST regime.
● February 2007: The 1st April 2010 deadline for GST implementation was retained
in the union budget for 2007-08.
● February 2008: At the union budget session for 2008-09, the finance minister
confirmed that considerable progress was being made in the preparation of the
roadmap for GST. The targeted timeline for the implementation was confirmed to
be 1 April 2010.
● July 2009: Mr. Pranab Mukherjee, the new finance minister of India, announced
the basic skeleton of the GST system. The 1 April 2010 deadline was being
followed then as well.
● November 2009: The EC that was headed by Mr. Asim Dasgupta put forth the
First Discussion Paper (FDP), describing the proposed GST regime. The paper
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was expected to start a debate that would generate further inputs from
stakeholders.
● February 2010: The government introduced the mission-mode project that laid the
foundation for GST. This project, with a budgetary outlay of Rs.1,133 crores,
computerised commercial taxes in states. Following this, the implementation of
GST was pushed by one year.
● March 2011: The government led by the Congress party puts forth the
Constitution (115th Amendment) Bill for the introduction of GST. Following
protest by the opposition party, the Bill was sent to a standing committee for a
detailed examination.
● June 2012: The standing committee starts discussion on the Bill. Opposition
parties raise concerns over the 279B clause that offers additional powers to the
Centre over the GST dispute authority.
● November 2012: Mr. P. Chidambaram and the finance ministers of states hold
meetings and set the deadline for resolution of issues as 31st December 2012.
● February 2013: The finance minister, during the budget session, announces that
the government will provide Rs.9,000 crores as compensation to states. He also
appeals to the state finance ministers to work in association with the government
for the implementation of the indirect tax reform.
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● August 2013: The report created by the standing committee is submitted to the
parliament. The panel approves the regulation with few amendments to the
provisions for the tax structure and the mechanism of resolution.
● October 2013: The state of Gujarat opposes the Bill, as it would have to bear a
loss of Rs.14,000 crores per annum, owing to the destination-based taxation rule.
● May 2014: The Constitution Amendment Bill lapses. This is the same year that
Mr. Narendra Modi was voted into power at the Centre.
● December 2014: India’s new finance minister, Mr. Arun Jaitley, submits the
Constitution (122nd Amendment) Bill, 2014 in the parliament. The opposition
demanded that the Bill be sent for discussion to the standing committee.
● February 2015: Mr. Jaitley, in his budget speech, indicated that the government is
looking to implement the GST system by 1st April 2016.
● May 2015: The Lok Sabha passes the Constitution Amendment Bill. Mr. Jaitley
also announced that petroleum would be kept out of the ambit of GST for the time
being.
● August 2015: The Bill is not passed in the Rajya Sabha. Mr. Jaitley mentions that
the disruption had no specific cause.
● March 2016: Mr. Jaitley says that he is in agreement with the Congress’s demand
for the GST rate not to be set above 18%. But he is not inclined to fix the rate at
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18%. In the future if the Government, in an unforeseen emergency, is required to

raise the tax rate, it would have to take the permission of the parliament. So, a
fixed rate of tax is ruled out.
● June 2016: The Ministry of Finance releases the draft model law on GST to the
public, expecting suggestions and views.
● August 2016: The Congress-led opposition finally agrees to the Government’s

proposal on the four broad amendments to the Bill.
The Bill was passed in the Rajya Sabha.
● September 2016: The Honourable President of India gives his consent for the
Constitution Amendment Bill to become an Act.
● 2017: Four Bills related to GST become Act, following approval in the parliament
and the President’s assent:
Central GST Bill

Integrated GST Bill
Union Territory GST Bill
GST (Compensation to States) Bill
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1.3 Evolution of GST:
The Implementation of the Goods and Services Tax (GST) in India was a historical move,
as it marked a significant indirect tax reform in the country. The amalgamation of a large
number of taxes (levied at a central and state level) into a single tax is expected to have
big advantages. One of the most important benefit of the move is the mitigation of double
taxation or the elimination of the cascading effect of taxation. The initiative is now
paving the way for a common national market. Indian goods are also expected to be more
competitive in international and domestic markets post GST implementation.
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From the viewpoint of a consumer, there would be a marked reduction in the overall tax
burden that is currently in the range of 25% to 30%. The GST, due to its self-policing and
transparent nature, is also easier to administer on an overall scale.
Several countries have already established the Goods and Services Tax.
In Australia, the system was introduced in 2000 to replace the Federal Wholesale Tax.
GST was implemented in New Zealand in 1986. A hidden Manufacturer’s Sales Tax was
replaced by GST in Canada, in the year 1991. In Singapore, GST was implemented in
1994. GST is a value-added tax in Malaysia that came into effect in 2015.
1.4 Tax Structure before GST:
Before the implementation of GST, taxation laws between the Centre and states were
clearly demarcated. There were no overlaps between the fiscal powers, whatsoever. The
Centre would levy tax on goods manufacture, except alcohol for consumption, narcotics,
opium, etc.
The states had the power to charge tax on the sale of goods.
The Centre would levy the Central Sales Tax that was collected by the originating states.
The Centre was also levying service tax on all types of services.
Additionally, the Centre was charging and collecting additional duties of customs on
goods that were imported into or exported from India. This tax was levied in addition to
the Basic Customs Duty. This additional duty of customs is referred to as Countervailing
Duty (CVD) and Special Additional Duty (SAD) and it counter balances excise duties,
state VAT, sales tax, and other such taxes. The introduction of the GST regime made
amendments to the Constitution so that the Centre and states are empowered at the same
time to levy and collect GST. This concurrent jurisdiction of the states and Centre also
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requires an institutional mechanism that ensures joint decisions are taken about the
structure and operation of GST.
1.5 When Did GST Start?
Several countries have already established the Goods and Services Tax.
In Australia, the system was introduced in 2000 to replace the Federal Wholesale Tax.
GST was implemented in New Zealand in 1986. A hidden Manufacturer’s Sales Tax was
replaced by GST in Canada, in the year 1991. In Singapore, GST was implemented in
1994. GST is a value-added tax in Malaysia that came into effect in 2015.
Constitution (One Hundred and First) Amendment Act, 2016
In order to address prevalent issues in taxation, the Constitution 122nd Amendment Bill
was put forth in the 16th Lok Sabha on 19 Dec 2014.
The Bill suggests levy of GST on all goods and services, except alcohol that humans
consume.
The tax is levied as Dual GST by the Centre and states/union territories. The component
levied by the Centre is Central Tax - CGST, while that levied by the state is State Tax -
SGST. The tax levied by union territories is Union Territory Tax - UTGST. The Centre
would levy the GST on inter-state trade or imports of services and goods. This tax is
referred to as Integrated Tax - IGST.
The Central Government will also levy excise duty on tobacco products, in addition to
GST.
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The tax on five petroleum products, i.e., high speed diesel, crude, petrol, natural gas, and
Aviation Turbine Fuel (ATF) will be outlined later after a decision is made by the GST
Council.
September 2016: A Goods and Services Tax Council (GSTC) was created by the union
finance minister, revenue minister, and ministers of state to take decisions on GST rates,
thresholds, taxes to be subsumed, exemptions, and other features of the taxation system.
The state finance ministers mentioned that the EC would be a platform for states where
there would be discussions of their regional issues. The GST Council is a separate entity
that would oversee the implementation of the GST system.
1.6 Decision taken by GST Council:
Some of the major decisions taken by the GSTC so far are:
There would be four tax rates under the GST regime, i.e., 5%, 12%, 18%, and 28%. Some
goods and services were also classified as exempt from tax.
A cess above the peak rate of 28% would be levied on certain sin and luxury goods.
The administrative control over 90% of taxpayers with turnover less than Rs.1.5 crore
would be with the State tax administration. 10% of control would be with the Central tax
administration.
Administrative control over taxpayers having turnover above Rs.1.5 crore would be
equally divided between the State and Centre tax administration.
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1.7 Goods and Services Tax Network:
Goods and Services Tax Network (GSTN) was set up as a private company in 2013 by
the Government under Section 25 of the Companies Act, 1956. GSTN is expected to
offer the front-end services of registration, payment, and returns to taxpayers. It would
also develop back-end technical modules that will be utilised by 25 states that have opted
in.
GSTN has also identified 34 IT and financial technology companies and tagged them as
GST Suvidha Providers (GSPs). These organisations will develop applications that will
be used by taxpayers when they interact with GSTN.
1.8 Key Features of the GST Regime:
The GST system is characterized by the following features:

GST is applicable on the “supply” of services or goods as opposed to the earlier concept
of taxation on goods manufacture, sale of goods, or service provision.
GST is a destination-based tax structure unlike the origin-based structure that existed
previously.
CGST, IGST, and SGST/UTGST are levied at rates that would be mutually agreed upon
by the states and Centre.
GST will replace the central taxes mentioned below:
Duties of Excise (medicinal and toilet needs)
Central Excise Duty
Additional Duties of Excise (Goods of Special Importance)
Additional Duties of Customs (CVD)
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Service Tax
Special Additional Duty of Customs (SAD)
Additional Duties of Excise (Textiles and Textile Products)
Cesses and surcharges
GST will subsume the following state taxes:
Central Sales Tax
Entry Tax
State VAT
Luxury Tax
Purchase Tax
Entertainment Tax, except that levied by local entities
Taxes on lotteries and gambling
Taxes on advertisements
State cesses and surcharges
Taxpayers with annual turnover of Rs.20 lakh is exempt from GST. For special category
states, this cut-off is Rs.10 lakh. An option of compounding is available to small-scale
taxpayers with annual turnover of Rs.50 lakh or below. The choice of threshold
exemption and the compounding scheme are optional.
Input credit of CGST shall be used only for paying CGST on the output. Similarly, input
credit of SGST/UTGST will be used only for the payment of SGST/UTGST. Therefore,
the two channels of input tax credit cannot be cross-utilised, except for the payment of
IGST for inter-state supplies
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1.9 Features of GST:
The implementation of the Goods and Services Tax (GST) in India was a historical move,
as it marked a significant indirect tax reform in the country. The amalgamation of a large
number of taxes (levied at a central and state level) into a single tax is expected to have
big advantages. One of the most important benefit of the move is the mitigation of double
taxation or the elimination of the cascading effect of taxation. The initiative is now
paving the way for a common national market. Indian goods are also expected to be more
competitive in international and domestic markets post GST implementation.
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From the viewpoint of the consumer, there would be a marked reduction in the overall tax
burden that is currently in the range of 25% to 30%. The GST, due to its self-policing and
transparent nature, is also easier to administer on an overall.
1.10 Benefits:
Some of the benefits of GST are:
1. Elimination of Multiple Taxes:
The biggest benefit of GST is an elimination of multiple indirect taxes. All taxes that
currently exist will not be in picture. This means current taxes like excise, octroi, sales
tax, CENVAT, Service tax, turnover tax etc will not be applicable and all that will fall
under common tax called as GST.
2. Saving more Money:
For a common man, GST applicability means the elimination of double charging in the
system. This will reduce the price of goods and services & help common man for saving
more money. It is expected that price of FMCG products, small cars, cinema tickets,
electrical wires etc. is expected to reduce.
3. Ease of business:
GST will bring one country one tax concept. This will prevent unhealthy competition
among states. It will be beneficial to do interstate business.
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4. Easy Tax Filing and Documentation:
For a businessman, GST will be a boon. No multiple taxes means compliance and
documentation will be easy. Return filing, tax payment, and refund process will easy
and hassle free.
5. More Employment:
As GST will reduce cost of product it is expected that demand of product will increase
and to meet the demand, supply has to go up. The requirement of more supply will be
addressed by only increasing employment.
6. Increase in GDP:
As demand will grow naturally production will grow and hence it will increase gross
domestic product. It is estimated that GDP will grow by 1-2% due to GST.
7. Reduction in Tax Evasion:
GST is a single tax which will include various taxes, making the system efficient with
very little chances of corruption and Tax Evasion.
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8. More Competitive Product:
As GST will address cascading effect of tax, inter-state tax, high logistics cost it will
make manufacturing more competitive. This will bring advantage to businessman and
consumer.
9.Increase in Revenue:
GST will replace all 17 indirect taxes with single tax. Increase in product demand will
ultimately increase tax revenue for state and central government.
10.Simplified Structure
Less tax compliance and a simplified tax policy compared to current tax structure.
11.Reduction of Manufacturing Cost:
Reduction of manufacturing costs due to lower burden of taxes on the manufacturing

sector. Hence prices of consumer goods will be likely to come down.
12. Reduction in Burden on Common Man:
Lower the burden on the common man i.e. public will have to shed less money to buy the
same products that were costly earlier.
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13. Increase in Production of Goods:
Increased demand will lead to increase supply. Hence, this will ultimately lead to rise in
the production of goods.
14. Control of Black Money:
Control of black money circulation as the system normally followed by traders and
shopkeepers will be put to a mandatory check.
15. Boost to the Indian economy in the long run.
Goods and service tax is a boon for the Indian economy and the common man. It is a
welcome step taken by the government.
1.11 Drawbacks of GST:
1. When the aviation industry was witnessing the much awaited growth with increasing
domestic traffic, the GST implementation might slower the rate at which the industry is
expecting growth as flying will become expensive. Service tax on fares currently range
between 6% and 9% (depending on the class of travel). With GST, the rate will surpass
15%, if not 18%, effectively doubling the tax rate.
2. India, on one hand, has the lowest insurance penetration in the world (less than 5% of
Indian population & half of the global average) and on the other GST will further make
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the insurance products dearer. Life, health & motor insurances will begin to cost more
from April 2017 as taxes will go up by up to 300 basis points.
3. IT companies have adopted a strategy of spreading their operations and stationing their
majority workforce where the cost of operations in low (e.g. Chennai, Bangalore). The
GST may lead to increasing costs of operations at their most cost-effective delivery
centres.
4.The Banking & Financial Sector (including Insurance as stated above) might take a hit
as currently the effective tax rate in the sector is 14 per cent, which is levied only on fee
component (and not interest) of the transaction. Under GST, effective tax rate on fee-
based transactions is expected to increase to 18-20%. With the implementation of GST a
moderate increase in the cost of financial services such as loan processing fees,
debit/credit card charges, insurance premiums, etc. is expected.
5. Petroleum products form a majority import value in the Indian ecosystem. However,
key petroleum products like crude, natural gas, high-speed diesel and ATF have been
kept out of GST. Compliance costs are likely to rise because of dual indirect tax
mechanism.
6. GST in India would impact negatively on the real estate market. It would add up to 8
percent to the cost of new homes and reduce demand by about 12 percent.
7. CGST (Central GST), SGST (State GST) are nothing but new names for Central
Excise/Service Tax, VAT and CST. Hence, there is no major reduction in the number of
tax layers.
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8. Some retail products currently have only four percent tax on them. After GST,
garments and clothes could become more expensive.
9. Adoption and migration to the new GST system would involve teething troubles and
learning for the entire ecosystem.
10. Every country that follows GST experienced a hike in inflation when they first
introduced it. They encountered the inflation by keeping tabs on prices and initiating anti-
profiteering measures at the retail level to protect consumers from price cheating. While
there have been similar discussions in the GST Council, India still does not have concrete
anti-inflationary measures to control the inflation that is an unavoidable outcome of GST.
11. Currently, some sectors like the textile industry are freed from taxes or pay low taxes.
GST has only 4 proposed tax rates of 5%, 12%, 18%, and 28%. Thus, for many sectors,
the tax burden will increase which in turn will increase the price of the final goods.
12.Most businesses use accounting software or ERP’s for filing tax returns which have
excise, VAT, and service tax already incorporated in them. The change to GST will
require them to change their ERP’s , too, leading to increased costs of purchasing new
software and training employees. GST needs businesses to register in all the states they
are operating in. This will increase the burden of compliance.
1.12 Criticism:
Technicalities of GST implementation in India have been criticized by global financial

institutions, sections of Indian media and opposition political parties in India. World
Bank's 2018 version of India Development Update described India's version of GST as
too complex, noticing various flaws compared to GST systems prevalent in other
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countries; most significantly, the second highest tax rate among a sample of 115 countries
at 28%.
GST's implementation in India has been further criticized by Indian businessmen for
problems including tax refund delays and too much documentation and administrative
effort needed. According to a partner at PwC India, when the first GST returns were filed
in August 2017, the system crashed under the weight of filings.
The opposition Congress party has consistently been among the most vocal opponents of
GST implementation in India with party President, and leader of the opposition, Rahul
Gandhi, slamming BJP for allegedly "destroying small businessmen and industries" in the
country. He went on to pejoratively dub GST as "Gabbar Singh Tax" after an ill-famed,
fictional dacoit in Bollywood films Blaming the implementation of alleged Gabbar Singh
Tax as a "way of removing money from the pockets of the poor", Rahul has lamented it
as a "big failure “while declaring that if Congress Party is elected to power, it will
implement a single slab GST instead of different slabs. In the run-up to the elections in
various states of India, Rahul has intensified his "Gabbar Singh" jibes on Modi
government.
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1.13 GST Rates
5% Household necessities such as tea, sugar, oil, coffee etc. and lifesaving drugs
are also included under this gst slab.
12% This includes computers and processed food
18% Hair oil, toothpaste and soaps, capital goods and industrial intermediaries are
covered in this slab
28% Luxury items such as small cars, consumer durables like AC and refrigerator,
cigarettes and aerated drinks, high end motorcycles are included here.
Though edible items like sugar, tea and coffee are included in the 5% slab, milk does not
attract any tax under the new GST regime. The idea behind these us to ensure that basic
items are available for everyone but instant food is kept out of this category.
● Basic households which currently attract 28% tax will be taxed at 18% only.
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● Sweets will also be taxable at 5%.
● Tax rates on coal has been reduced from 11.69% to just 5%.
● GST also gives major push to domestic industries.
1.14 Payment Procedure under GST:
Every registered person is required to compute his tax liability on a monthly basis by
setting off the Input Tax Credit (ITC) against the Outward Tax Liability. If there is any
balance tax liability the same is required to be paid to the government.
There are 3 ledgers prescribed by the government that is required to be maintained by

every tax payer –
1. Electronic Tax Liability Ledger
The electronic tax liability ledger shows the total tax liability of a registered person at any
point of time. This detail can be accessed on the GST portal of a registered tax payer.
2. Electronic Cash Ledger
An Electronic Cash Ledger will also be maintained on the GST portal. It will display the
total amount deposited by the tax payer towards discharge of his tax liability or interest or
late fee or penalty any other amounts. Also, it is now mandatory for businesses making
payment for more than Rs 10,000 to do it electronically.
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3. Electronic credit ledger
All the taxes paid on the inputs would be recorded in the electronic credit ledger. The
input tax credit in each of the cases mentioned below, shall also be transferred to the
electronic credit ledger:
ITC available to the branch for the amount of credit transferred by ISD
ITC allowed on input held in stock and the semi-finished or finished goods would be
credited to electronic credit ledger if the taxpayer applies for registration within 30 days
of becoming liable to pay tax.
ITC available on the input held in stock and semi-finished or finished goods by a
taxpayer in the composition scheme converting to a normal taxpayer shall be transferred
to electronic credit ledger.
ITC available due to the taxes paid under the reverse charge mechanism shall also be
transferred to the electronic credit ledger.
ITC available on goods/services used for the business and other purposes shall only be
allowed to the extent applicable for business purposes.
All the payments under GST have to be made by either using the input tax credit
available in the electronic credit ledger or through the electronic cash ledger.
Interest on delayed payments
Per Section 50 of the CGST Act, interest will start accruing on a delayed payment the day
after the payment was due. This applies to both missed payments and payments not made
in full. The payment of interest is automatic and should be made voluntarily, even
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without a demand. The interest rate, not to exceed 18 percent, will be determined by the
Government on the recommendation of the GST Council.
In the case of undue or excess claim of ITC, or undue or excess reduction in output tax
liability, interest shall be paid at a higher rate, not to exceed 24 percent, to be notified by
the Government.
1.15 Why GST is needed in India?
Introduction of GST is considered to be a significant step in the reform of indirect

taxation in India. Amalgamating of various Central and State taxes into a single tax
would help mitigate the double taxation, cascading, a multiplicity of taxes, classification
issues, taxable event, etc., and leading to a common national market.
VAT rates and regulations differ from state to state. On the other hand, GST brings in
uniform tax system across all the states. Here, the taxes would be divided between the
Central and State government.
1. Impact of GST on Indian Economy:
GST offers several benefits to our economy. Here are some key advantages:
Create unified common national market for India, giving a boost to Foreign investment
and “Make in India” campaign
Boost export and manufacturing activity and leading to substantive economic growth
Help in poverty eradication by generating more employment
Uniform SGST and IGST rates to reduce the incentive for tax evasion
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2. Impact of GST on Consumers:
GST is also beneficial for consumers. Here is how it impacts the Indian consumers
Simpler Tax system
Reduction in prices of goods & services due to elimination of cascading
Uniform prices throughout the country
Transparency in taxation system
Increase in employment opportunities
3. Impact of GST on Traders
GST is also has some positive impact on traders. Let’s see how it affects the traders:
Reduction in multiplicity of taxes
Mitigation of cascading/ double taxation through input tax credit
More efficient neutralisation of taxes especially for exports
Development of common national market
Simpler tax regime
Fewer rates and exemptions
Distinction between Goods & Services no longer required
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1.16 Textile Industry:
Textile sector of India is one of the top contributors toward the development of the Indian
economy, concerning GDP, employment, export promotion, etc. Known as one of the
oldest manufacturing industry in the country and the second largest, after agriculture, the
textile industry employs both skilled and unskilled people. The industry contributes over
10 percent of the total annual exports of the country which is likely to increase under the
new Goods and Services Tax (GST) regime. Under the GST purview, the rate structure
for textile is decided at 5% for cotton fibre and 18% for manmade synthetic fibre while
totally exempting silk and jute from the same. The rate of GST on apparels is also
decided based on the category, as the apparels whose cost is below Rs. 1000 will attract
5% GST and apparels above this mark will attract 12% GST.
The GST council has mentioned some rules regarding the e-way bill and rates. At the
same time, the GST rates on job work of textiles and the related products that are
manufactured are reduced from 18% to 5%. With the implementation of GST, the
difficult data of the rates and categorisation of GST in the textile sector has been eased
out. The decline in pricing will invert the supply rule directly, and there will be a boost in
demand instantly. Due to the fall in price, there will be competition in the market thus
creating a healthy environment for export. However, on the domestic front, the
manufacturers may face a setback as the price fall may result in less revenue generation.
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1.17 Impact of GST on Textile Industry:
Despite some changes under the GST regime, the textile sector is in for certain
advantages with the implementation of the regime. The tax regime will impact the textile
industry by bringing in following changes.
● Introducing a break in input credit changes
● Reduction in manufacturing cost.
● Allowing input capital on capital goods.
● Increase in export of textile Products.
There may be few drawbacks for the textile industry due to the higher tax rate and
removal of benefits under cotton value chain, but it is safe to say that GST will help this
industry in long run by getting more registered tax papers under a well-regulated system.
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Chapter 2: Research Methodology
Synopsis
2.1 Research Design
2.2 Objectives
2.3 Methods of Data Collection
2.4 Sampling Plan
2.5 Area of Study
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2.1 Research Design
A research design is a comprehensive plan guiding researcher to achieve its objectives. It

is a detailed blueprint of the research. It details the procedures necessary for obtaining the
information needed to structure or solve research problem. Research design is the adhoc
plan, structure and significant strategy of exploration apprehended so as to acquire
solutions to research problems and to control any discrepancy or any variance. It is the
specification of certain methods and procedures for getting the information needed.
It is an overall operational framework of the project that stipulates what information is to

be gathered, from which all informants and by using what methods and procedures. Thus,
a research design can be expresses as a blueprint, plot, guide or outline for gratifying
research objectives.
Research design is needed because it eases the glib sailing of the research options ;
thereby creating research as effectual as possible generating maximal information with
minimal expenditure of effort, time and money. Just for better, economical and pretty
construction of a house, we need a blue print (or what is commonly called the chart or
plot of the house) well thought out and prepared by an expert architect, similarly we need
research design or a plan in advance of data collection and analysis for our research study.
In this chapter following elements of research design are discussed at length.
Objectives
Data Collection
Sampling Techniques
Area of Study
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2.1 Objectives
A critical component of a successful research engagement is a set of clearly defined and

meaningful objectives. Having well-defined objectives narrows and focuses the research
and ensures that the findings are relevant to decision-makers. The research objectives
drive all aspects of the methodology, including instrument design, data collection,
analysis, etc.
It is necessary to list the research objectives because research objectives give proper
direction to the paper, research objectives also help to avoid any diversification to the
paper, it also minimises the wastage of resources and it ease the understanding of the
research by the target audience.
Objectives of Present Study:
1. To understand the concept of goods and service tax.

2. To understand how GST work in textile industry.
3. To find the problems face by business while implementing GST.
4. To Suggest measures for solving problems.
2.3 Methods of Data Collection:
Primary Data Collection:
Primary data source is an original data source, that is, one in which the data are collected
first hand by the researcher for a specific research purpose or project. Primary data can be
collected in a number of ways.
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Secondary Data Collection:
Secondary data refers to data which is collected by someone who is someone other than
the user. Common sources of secondary data for social science include censuses,
information collected by government departments, organizational records and data that
was originally collected for other research purposes.
Present Study
For the present study secondary data was collected through various sources which include
various books, journals, periodicals, magazines, reports and various web sources. The
details of the same are mentioned in the bibliography.
For the present study data was also collected through primary source. The primary source
includes collecting responses through a pre-designed questionnaire from entrepreneurs.
2.4 Sampling Plan
In research terms a sample is a group of people, objects, or items that are taken from a
larger population for measurement. The sample should be representative of the
population to ensure that we can generalise the findings from the research sample to the
population as a whole.
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Methods:
1. Simple random sampling
In this case each individual is chosen entirely by chance and each member of the
population has an equal chance, or probability, of being selected.
2. Systematic sampling:
Individuals are selected at regular intervals from the sampling frame. The intervals are
chosen to ensure an adequate sample size.
3. Stratified sampling:
In this method, the population is first divided into subgroups who all share a similar
characteristic. It is used when we might reasonably expect the measurement of interest to
vary between the different subgroups, and we want to ensure representation from all the
subgroups
4. Clustered sampling:
In a clustered sample, subgroups of the population are used as the sampling unit, rather
than individuals.
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5. Convenience sampling:
Convenience sampling is perhaps the easiest method of sampling, because participants

are selected based on availability and willingness to take part.
6. Quota sampling:
This method of sampling is often used by market researchers. Interviewers are given a
quota of subjects of a specified type to attempt to recruit.
7. Judgement sampling:
Also known as selective, or subjective, sampling, this technique relies on the judgement
of the researcher when choosing who to ask to participate.
8. Snowball sampling:
This method is commonly used in social sciences when investigating hard-to-reach

groups
.
Sample Plan and Sample Size
For the present study data was collected from 100 respondents belonging to the city of
Ulhasnagar. The respondents were businessmen who are engaged in Textile Business.
The sample of respondents was selected purely on the basis of Simple Random Sampling
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2.5 Area of Study
Ulhasnagar is a town located in the Thane district of Maharashtra state in Konkan

division, located about 55 km from Chhatrapati Shivaji Maharaj Terminus railway
station. This city is part of Mumbai Metropolitan Region managed by MMRDA. It had an
estimated population of 506,098 at the 2011 Census. Ulhasnagar is a municipal town and
the headquarters of the Tahsil bearing the same name. It is a railway station on the
Mumbai-Pune route of the Central Railway zone.1 The Governor-general of India, C.
Rajagopalachari named the town Ulhasnagar and he also laid the foundation stone on on
8 August 1949 for the township. Not actually, it was called Ulhasnagar, because of its
close proximity to Ulhas Plateau and its valley.
Ulhasnagar, a colony of migrants in the aftermath of the Partition of India (1947), is 61

years old. Situated 58 km from Mumbai, the once-barren land has developed into an
urban town of Thane district.
The town covers an area of 13 square kilometers and is divided into 285 blocks. It is a
centre for the production of rayon silk, dyes, ready-made garments, electrical / electronic
appliances & confectionaries. The total length of existing Roads & Streets in the town
measures 352 kilometers. The town is served by underground & open-surface drainage,
night soil being disposed of by septic tank latrines. The town gets a protected water
supply through MIDC. Sanctioned Water Quota at various tapping points is 112 MLD.
Fire-fighting service is also available in the town. 60 private hospitals with a total bed-
strength of 840 beds 3 Government hospitals with total bed-strength of 356 beds, 255
dispensaries / clinics, 100 RMP and a family planning centre cater to the curative and
preventive health needs of the town population.
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Ulhasnagar has number of small businesses manufacturing denims. Some of the

manufacturers export jeans worldwide from Ulhasnagar. The city is also known for its
furniture market, cloth market and electronic market. Apart from this Ulhasnagar has
various small scale manufacturing units which produce confectionery, textile weaving,
furniture, printing press, etc.
Educational facilities are provided by 129 primary schools, 56 secondary schools, 9

higher secondary schools, 3 colleges and 2 technical colleges.
According to the 2011 Census of India, Ulhasnagar had a population of 506,098.

Ulhasnagar is the 22nd biggest city in Maharashtra and 88th in the country. Males
constituted 53% of the population and females 47%..Among minority languages, Sindhi
is spoken by 34.47% of the population and Marathi by 19.63%.Due to the large Sindhi
population, the area has earned the moniker USA referring to the Ulhasnagar Sindhi
Association.
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Chapter 3: Review of Literature
Synopsis
3.1 Literature
3.2 Gap Analysis
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3.1 Literature
1. Sreeshma, Aswamalika and Aparna (2018) Goods and Service tax is a type of indirect
tax which is levied on the sale of goods and services in India. The Goods and Services
Tax was launched on 1 July 2017 and was relevant throughout India which textiles and
cloth industry is connected to the total growth of the Indian and the world economy.
AkhiAkter (2017) analysed the impact of GST on Indian textile and clothing industry and
found that the Textile industry body, The Confederation of Indian Textile Industry (CITI)
on 3 July has petitioned the government to reduce the GST rate to 12% from 18% of
Manmade fibre and yarn otherwise the producers will be forced to import the yarn and
fabrics from China, Indonesia and South Korea at cheaper rate.
2. Virajdhakan(2018)The study stated that the lack of information coupled with the
apathy towards reforms may paralyze the speedy implementation of this system
especially in small towns where still not a single orientation programs have been
planned and executed till date by competent authorities. The association of business
turnover with the apprehensions can be issue worth considering when designing training
programs and modules. In lien of this it is suggested associations, NGO’s should come
forward to organize such programs at town level to orient small traders so that nobody is
left out of this biggest tax reform in the country. A single rate would help to maintain
simplicity and transparency by treating all goods and services as equal without
giving special treatment to some ‘special’ goods and/or services.Shakdwipee(2017)in his
paper 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.
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3. Jyotsna Oberoi (2018) GST game is not for weak hearted. GST will help in improving
the economy but in long run and that is why it is called a “Reform”. GST taxation system
will cause inconvenience to citizens, businesses, and manufacturers as this system is
completely new to them but with the time people will learn and get the hang of it. GST
will usher in a plethora of 1lipchanges in the textile business of India with an overall
positive impact on the sector. GST implementation is expected to produce impetus to
various reforms and policy measures envisaged by the Government for the ease of doing
business and to usher India into a simple, transparent and tax friendly regime. It will
simplify the present procedures by converging various complex indirect taxes into a
unified platform and conjointly improve the “textile export” state of affairs of India. The
compliant would notice their goods become competitive and the sector would conjointly
take part in contributing to tax in addition to providing employment and other social
benefits.
4. Brew (2012) The authors have studied the relation between the mode 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 method
of 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
5. Rajatdeb (2017) The study has reviewed the prior literature on tax reforms and GST to
synthesize the research findings and to direct the future research avenues. Literature on
tax reform has attained momentum in developing countries since last two decades and in
India when it has decided to implement GST from 2017-18. Adopting the Systematic
Literature Review technique by accessing the academic e-journals of selective publishers
and applying a filtering process, the study has reviewed 119 sample papers published
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during 2002-2016 by focusing objectives and results of those cited papers. Results have
documented tax reforms have executed globally with multiple objectives; it has admitted
few limitations, practice implications have pointed out and have sketched the road map
for posterior studies especially in the transition period in India when it would shortly
move to GST regime.
6. By clear tax (2017)The Indian textile industry provides employment to a large number
of skilled and unskilled workers in the country. It contributes about 10% of the total
annual export, and this value is likely to increase under GST. GST would affect the
cotton value chain of the textile industry including all garments for men and women like
shirts, trousers, saree, apparels, shoes and any more clothing materials which is chosen by
most small medium enterprises as it currently attracts zero central excise duty (under
optional route).Impact of GST on Textile Industry According to the Ministry of textiles
(Government of India) total textile export during 2011-12 was US$ 33161.74 and the
total value of textile machinery produced during the same period was Rs. 5280 crore.
7. Banerjee, Mona Banerjee, Kishore Kumar Das (2016) The Goods and Service Tax
(GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and
services. It is a tax on value addition at each stage having the benefit of availing
continuous set-off of Input Tax Credit thereby giving relief to the taxpayers from the
burden of 7.The Goods and Service Tax (GST) is a comprehensive tax levy on
manufacture, sale and consumption of goods and services. It is a tax on value addition at
each stage having the benefit of availing continuous set-off of Input Tax Credit thereby
giving relief to the taxpayers from the burden of cascading i.e. tax on tax. This new form
of taxation replaces almost all of the indirect taxes contributing to a significant
improvement towards a comprehensive indirect tax reform in India. The authors study the
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past literature relating to GST that helps them to form a critical review on the above topic
thereby suggesting areas of future research for filling up the research gaps.
8. Tanushree Gupta (2016) In the year 2000, for the first time the idea of initiating the
GST was made by the then BJP Government under the leadership of AtalBehari
Vajpayee. An empowered committee was also formed for that, headed by
AsimDasgupta.The committee was formed to design the model of the GST and at the
same time inspect the preparation of the IT department for its rollout. In 2011, the
previous United Progressive Alliance Government also introduced a Constitution
Amendment Bill to facilitate the introduction of the GST in the LokSabha but it was
rejected by many States. Now in year 2016 this bill got green signal under the umbrella
of Modi government.
9. Ciobansu, (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.
10. Subhamoy Banik Advocate Arundhati das (2017)GST or Goods and Services Tax, the
greatest tax reform in India since independence which has been long pending. GST is
meant to simplify the indirect tax regime of India by replacing a host of taxes by a single
unified tax. GST is the only indirect tax that directly connects all the sector of Indian
economy thus enhancing the economic growth of the country by creating a single unified
market. More than 160 countries of the world have implemented GST so far followed by
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France. The idea of GST in India was proposed by Atal Bihari Vajpayee in 1999 and a
committee was set up under the leadership of Asim Das Gupta the then finance minister
of West Bengal. It was supposed to be implemented from 1st April 2010 under flagship
of P Chidambaram then finance minister of UPA government but due to political
issues and conflicting interests of various stakeholders it did not came into force. In
May 2016 the constitutional amendment bill for GST was passed by LokSabha and
deadline of 1st April 2017 to implement GST was set by Arun Jaitley the finance minister
of India. However, there is a huge outcry against its implementation.
11. Dr.YogeshKailashchandra Agrawal (2017) GST there is a condition chaos and

confusion among common man. The aim this research paper is to explain the mechanism
of GST and its effects on Indian economy. In India, the idea of GST was contemplated in
2004 by the Task Force on implementation of the Fiscal Responsibility and Budget
Management Act, 2003, named Kelkar Committee. The Kelkar Committee was
convinced that a dual GST system shall be able to tax almost all the goods and services
and the Indian economy shall be able to have wider market of tax base, improve revenue
collection through levying and collection of indirect tax and more pragmatic approach of
efficient resource allocation. Under the Goods and Service Tax mechanism, every person
is be liable to pay tax on output and shall be entitled to enjoy credit on input tax paid and
tax shall be only on the amount of value added.
12. Rajitturukmane and Sujitgulhane (2017)Textile industry, one of the largest and highly
labour intensive manufacturing sectors in India, is one of the identified benefactors of this
campaign. India is one of the few textile producing countries in the world which can
claim the complete value chain productivity strength has the potential to repair the
segments perception and the country’s involvement in the world textile scenario. India is
the only country in the world that offers the unique combination of democracy,
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demography, and demand. This combined with the newest international strategy of the
government will lead to more job creation, boosting the national economy and give the
Indian economy global recognition. The textile sector has the capability to contribute
highest to the Indian economy by providing more jobs and contributing to the overall
GDP.
13. Sonypandey (2018) Textile sector of India is one of the top contributors toward the
development of the Indian economy, concerning GDP, employment, export promotion,
etc. Known as one of the oldest manufacturing industry in the country and the second
largest, after agriculture, the textile industry employs both skilled and unskilled people.
The industry contributes over 10 percent of the total annual exports of the country which
is likely to increase under the new Goods and Services Tax (GST) regime.Though there
are a few disadvantages of the GST on the textile industry, it is safe to say that it will help
the sector in the long run. It will get many registered taxpayers under a well-maintained
system. It can also be said that the new tax regime will help the textile industry expand
itself in both the domestic as well as global markets thereby creating sustainable and
long-term growth opportunities.
14. Madhukar N Hiregange (2017) The textiles and apparel industry in India accounts for
about 10% of manufacture or production and 2% of India's Gross Domestic Product
(GDP) and constitutes about 13% of country's export earnings. The impact of GST on
textile industry would be substantial involving lot of transitional issues and industry
needs to gear up for implementation of GST after understanding the impact. The
Government is determined to introduced GST from 1st July 2017. Paper writers feel that
ideally 1st September 2017 looks fair considering that the assesses should be given
adequate time to transit to the new regime. Early preparation could provide lot of benefits
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including better transition planning. Professionals need to highlight the importance and
assist the assesses in this regard especially the SME sector.
15.(Urvashi gupta) GST will give India a world class charge framework by amalgamating
recent totally extraordinary medications to assembling and benefit part. Be that as it may,
this will be liable to its balanced style, convenient execution and customary development.
Henceforth, it can be reasoned that GST in the Indian structure will connect income
spillages to current framework and at the same time will give help to citizen as far as
lessened duty trouble, end of falling impact and consistent stream of input credit on the
vast majority of the items, notwithstanding releasing a flood of business benefits up to
this point immaculate by the VAT framework and would basically prompt Monetary
Development.
Gap Analysis:
The study is about the impact of GST on textile industry and all the researchers have
given their view towards it and there are hardly any researchers who have studied about
the impact of GST in Ulhasnagar. So, the present research is aimed to eliminate this gap.
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Chapter 4: Findings
Table 4.1: Age of Respondents

Age Responses Percentage
Below 20 16 16
Between 20-30 years 37 37
Between 30 - 40 years 21 21
Between 40- 50 years 20 20
50 and above 6 6
Total 100 100
Graph 4.1: Age of Respondents
Age Of Respondents
50 and above
6%
below 20
16%
between
40- 50
years
20%
between 30 - 40 between 20-30
years years
21% 37%
It is observed that, out of 100 responses, 16% belongs to the age group of below 20 years
of age, 37% belongs to the age group of 20-30 years, 21% belongs to the age group of 30-
40 years, 20% belong to the age group of 40-50 years and 6% respondents belong to the
age group of 50 and above years of age.
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Table 4.2: Income of Respondents

Income Responses Percentage
0-150000 42 42
150000-200000 21 21
200000-500000 30 30
500000 and above 7 7
Total 100 100
Graph 4.2: Income of Respondents
Income of Respondents
500000 and above
7%
0-150000
200000-500000 42%
30%
150000-200000
21%
It is observed that, out of 100 respondents, 42% belongs to the income group of 0-150000,
21% belong to the income group of 150000-200000, 30% belong to the income group of
200000-500000 and the remaining 7% belong to the income group of 500000 and above.
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Table 4.3: Nature of Business of Respondents

Nature of business Responses Percentage
Textile Mills 27 27
Textile Product Mills 17 17
Apparels Manufacturing 22 22
Any Other 34 34
Total 100 100
Graph 4.3: Nature of Business Of Respondents
Nature of Business of Respondents
textile mills
any other
27%
34%
textile product
mills
apparels 17%
manufacturing
22%
In the present study, out of 100 respondents, 27% of the respondents are in textile mills,
17% of the respondents are in textile product mills, 22% of the respondents are in
apparels manufacturing and the remaining 34% are in other type of textile industry
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Table 4.4: Satisfaction with Present GST Structure

Satisfaction With Present GST Structure Responses Percentage
Yes 87 87
No 13 13
Total 100 100
Graph 4.4: Satisfaction with Present GST structure
Satisfaction with present GST structure

100
90
80
70
60
50 yes
40 no
30
20
10
0
yes no
In the present study, it is observed that majority of the people, that is 87% of the
respondents are satisfied with the present GST structure in India and the remaining 13%
of the respondents are not satisfied with the present GST structure in India
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Table 4.5: Advantages of GST

Advantages
Total
Attributes Dissatisfied Satisfied Very Satisfied
Reduction In Manufacturing Cost 27 47 26 100
Simplified Exports 14 54 32 100
Credit On Capital Goods 21 47 32 100
Graph 4.5.1: Reduction in Manufacturing Cost
Reduction in Manufacturing Cost

50
45
40
35
30
dissatisfied
25
satisfied
20
very satisfied
15
10
5
0
dissatisfied satisfied very satisfied
In the present study, is observed that, Due to reduction in manufacturing cost 27% of the
respondents are dissatisfied, 47% of the respondents are satisfied and the remaining 26%
of the respondents are very satisfied.
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Graph 4.5.2: Simplified Exports
Simplified Exports
60
50
40
dissatisfied
30
satisfied
20
very satisfied
10
0
In the present study, it is observed that, due to simplification in exports 14% of the
of the respondents are very satisfied.
Graph 4.5.3: Credit on Capital Goods
Credit on Capital Goods

50
40
30 dissatisfied
20 satisfied
very satisfied
10
0
In the present study, it is observed that, due to credit on capital goods 21% of the
of the respondents are very satisfied
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Table 4.6: Complications in Filing GST

Complications In Filing GST Responses Percentage
Yes 54 54
No 46 46
Total 100 100
Graph 4.6: Complications in Filing GST
Complications in filing GST
no
46%
yes
54%
In the present study, it is observed that majority of the people, that is 54% of the
respondents find complications in filing GST and the remaining 46% of the respondents
don't find any complications in filing GST.
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Table 4.7: Impact of GST

Impact of GST Responses Percentage
Good 75 75
Bad 25 25
Total 100 100
Graph 4.7: Impact of GST
Impact of GST
Bad
25%
Good
75%
In the present study, it is observed that majority of the respondents, that is 75% of the
investors find good change in their business and the remaining 25% of the respondents
find bad change in their business.
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4.8: Changes in Working Pattern

Changes In Working Pattern Responses Percentage
Yes 87 87
No 13 13
Total 100 100
4.8: Changes in Working Pattern
Changes in working pattern
no
13%
yes
87%
In the present study, it is observed that majority of respondents, that is 87% of them find
changes in the working pattern of their business and the remaining 13% of the respondent
find no change in the working pattern of their business.
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Table 4.9: Disadvantages of GST

Disadvantages
Total
Attributes Least severe Severe very severe
Increase in operational cost 41 35 24 100
GST on supply 15 66 19 100
Lack of knowledge 40 37 23 100
Graph 4.9.1 Increase in Operational Cost
In the present study, it is observed that due to increase in operational cost 41% of
response is least severe, 35% of the respondents is severe and the remaining 24% of the
respondents is very severe.
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Graph 4.9.2: GST on Supply
In the present study, it is observed that due to GST on supply 15% of the response are
least severe, 66% of the response are severe and the remaining 19% of the respondents
are very severe.
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Graph 4.9.3: Lack of Knowledge
In the present study, it is observed that, due to lack of knowledge 40% of the respondents
are least severe, 37% of the respondents are severe and the remaining 23% of the
respondents are very severe.
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Table 4.10: Effect of Annual Sales

Effect on your annual sales Responses Percentage
Increased 25 25
Decreased 40 40
no change 35 35
Total 100 100
Graph 4.10: Effect on Annual Sales
Effect on Annual Sales
increased
25%
no change
35%
decreased
40%
In the present study, it is observed that due to GST, there is an increase in annual sales of
25% of the respondents, decrease in sales of 40% of the respondents and the remaining
35% of the respondents found no change in their business.
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Table 4.11: Change in Behaviour of Customers

Change In Behaviour Of Customers Responses Percentage
Yes 90 90
No 10 10
Total 100 100
Graph 4.11: Change in Behaviour of Customers
Change in behaviour of customers
no
10%
yes
90%
In the present study, it is observed that majority of respondents, that is 90% of the
respondents find change in the behaviour of customers and the remaining 10% of
respondents find no change in the behaviour of customers.
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Table 4.12 Support from Government

Support From Government Responses Percentage
Yes 67 67
No 33 33
Total 100 100
Graph 4.12: Support from Government
Support from Government
no
33%
Yes
67%
In the present study it is observed that, 67% of the respondents got support from the
government in understanding GST and the remaining 33% of the respondents didn't get
any support from the government in understanding GST.
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Table 4.13: Awareness of GST before Implementation

Awareness Of GST Before Implementation Response Percentage
Yes 17 17
No 28 28
Little bit 55 55
Total 100 100
Graph 4.13: Awareness of GST before Implementation

awareness of
GST before Awareness before Implementation
implementatio
n
0%
Yes
17%
Little bit
55% No
28%
In the present study, out of 100 respondents, 17% of the respondents were aware of the
GST implementation, 28% of the respondents were not aware of the GST implementation
and the remaining 55% of the respondents were little bit aware about the GST
implementation.
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Table 4.14: Time Consuming Process

Time Consuming process Responses Percentage
Yes 60 60
No 40 40
Total 100 100
Graph 4.14: Time Consuming Process
Time Consuming Process
no
40%
yes
60%
In the present study, it is observed that majority of people, that is 60% of the respondents
find GST as a time-consuming process and 40% of the respondents do not find GST a
time-consuming process.
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Table 4.15: Satisfied With Tax Slab

Satisfaction with Tax Slabs Responses Percentage
Yes 82 82
No 18 18
Total 100 100
Graph 4.15: Satisfaction with Tax Slab
Satisfaction with Tax Slab
no
18%
yes
82%
In the present study, out of 100 respondents, 82% of the respondents are satisfied with the
tax slab of gst and the remaining 18% of the respondents are not satisfied with the tax
slab.
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Table 4.16 Positive Change in Business

Positive Change In Business Responses Percentage
Yes 74 74
No 26 26
Total 100 100
Graph 4.16: Positive Change in Business
Positive Changes in Business
No
26%
Yes
74%
Yes No
In the present study, out of 100 respondents, 74% of the respondents find positive
change in their business and the remaining 26% of the respondents find negative change
in their business due to GST.
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Chapter 5: Conclusion and Recommendation
Synopsis
5.1 Conclusion
5.2 Recommendation
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5.1 Conclusion
In the last one year, our country has witnessed historic and impactful economic reforms
and policy making. In fact, India was one of the very few economies undertaking
transformational reforms. One of the main reasons of such reforms is Goods services tax
which is believed to be one of the major reforms in Indian tax regime. GST is boost
competitiveness and performance in India’s manufacturing sector. Declining exports and
high infrastructure spending are just some of the concerns of this sector. Multiple indirect
taxes had also increased the administrative costs for manufacturers and distributors and
with GST in place, the compliance burden has eased and this sector will grow more
strongly.
Indian industry considers the Goods and Services Tax (GST)a step in the right direction
and a majority are satisfied with its overall implementation, led to increased efficiency
for businesses by reducing their transportation time, on account of absence of state
barriers etc. Returns and payment of tax is much easier and simpler under the new
regime. GST had a moderating impact on retail price inflation, which may have risen to
higher level without the new tax regime. After the implementation of GST many positive
reforms took place in India and that brought many positive changes in the business and
GST implementation satisfied many people.
There may be a few drawbacks for the textile industry due to the higher tax rate and
removal of benefits under cotton value chain. Some retail products currently have only
four percent tax on them. After GST, garments and clothes have become more expensive.
Customers are not much satisfied with the new GST because they are the ultimate tax
bearers and goods have become more expensive for them. Consumers are not much
satisfied with the GST.GST has also affected the exporters, the biggest concern is related
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to the plan to let exporters pay the taxes and then get a refund after sending shipments.
Sources said despite red flags going up, the revenue department has refused to change its
stance or work out an alternative mechanism such as use of bank guarantees. There are
some of the drawbacks in GST due to which some people are not much satisfied due to
its implementation.
GST should bring a positive outcome to the current Indian economy. It has been framed
after taking many things into consideration, which earlier caused much compliance in
carrying out business. This let to the leakage of money and increase in corruption. But,
after the introduction of the GST system most of the records and working will be
transparent and watched over by the government.
In the long-term, GST would be simplified even more. Globally, countries that have
benefitted from GST implementation typically deploy two- or three- rates, as compared
to the five-rate structure in India. As the cascading effect disappears, inflation will
reduce, thus leading to a positive consumer outlook. As the tax revenue rises, the fiscal
deficit would improve. The international business community has welcomed this
changing landscape of Indian business, and noted that the GST has helped improve the
ease of doing business in India. This is expected to attract more FDI investments and help
growth in exports.
5.2 Suggestions
With the implementation of GST, India took a step towards unified common national
market. It aims to bring in increased efficiency and compliance and also boost
government’s ‘ease of doing business’ initiative. However, being a new, evolving law,
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there are certain improvements required. Few areas that need consideration are as given
below:
1. Processes must be reduced so that business can operate efficiently in the best interest
of the people and for economic growth. Filing of 37 returns per GSTIN could be a very
time-consuming exercise, wherein everyone would not even have the bandwidth to
comply with.
2. Relief must be given to small scale operators and particularly reduced processes should
be applicable to them. They do not have finance or resource to comply. Much of India’s
business is one or two man show. The facility to file quarterly returns should be extended
to assesses with up to 10 crore turnovers.
3. Rates should be rationalized and reduced to make India competitive and in interest of
compliance and economic growth. The highest rate should be kept at 18% and there
should be only few items that fall in 28% slab. Daily use items such as soaps, cremes,
movie tickets, electrical goods should not be taxed at 28%.
4. Technological glitches of the GST network should be sorted out on a war footing basis
5. Further, there is also no provision to amend GST Return once uploaded, in case some
clerical error is found later. Provision should urgently be made to allow rectification of
returns.
6. The matching concept of input credits requires large volume of data of the supplier to
be matched with that of the receiver. This process should be simplified, wherein only
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Broad main criteria may require matching like the invoice value and the tax amount and
matching of specific, precise wide variety of data should not be required like invoice
number and date.
7. Valuation Rules lack clarity and are debatable. This is likely to lead to litigation and
transfer pricing issues / litigation. These rules need to be rationalized, simplified and be
fair to one and all.
8. In respect of capital goods received on or after 01.07.2017 (Capital goods in transit),

transitional credit of tax paid in earlier regime should also be available. Transitional input
credit should also be available on goods or services are delivered or received before the
appointed date and the assesse received the invoices after appointed day.
9. Exempt supplies should be excluded from the term Aggregate Turnover (‘AT’) for the
purposes of determination of registration requirements.
10. Anti-profiteering provisions need reconsideration as these may unnecessarily cause

hardships to businesses. System should be made to ensure that this is not misused so as to
cause difficulties
11. The issues being faced by the exporters should be dealt with and the refund
procedure should be activated immediately.
12. Credit of Krishi Kalyan Cess should be allowed to be carried forward as eligible
credit, as it was allowed as set off in the service tax regime.
13. Composition scheme should also be provided to small scale service providers.
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14. Advance Authority for Rulings should be active at the earliest as GST law is already
in force since July 1st, 2017
15. Single cash ledger concept should be used instead multiple cash ledgers i.e. separate
cash ledger for CGST, SGST, IGST, interest, penalty etc. Further it is suggested to allow
partial / period payment of offset of tax so that an assessee can bear interest only on the
short payment.
16. Reverse charge payable by registered dealers in case of purchase from unregistered
dealers (Section 9(4)) should be completely withdrawn, instead of keeping it in abeyance
till 31.03.2018.
17. Registration for All Traders & Service Providers, with Exemption, for Small Scale
Suppliers from Collecting & Remitting GST.
18. Tax Payment under Single Head can be done by Dealer and Classification under
various sub-heads may be done by GSTN:
19. Simplification of GST Returns & Matching/ Reconciliation System
20. Penalty/ Interest Debits may be generated by GSTN System.
21. GSTN can generate a Tax Statement every month, like Credit Cards Statements. &
Extract of GST Liability Ledger: (Formats Given) and this would serve as “Tax Demand/
Tax Status Report”
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22. Dealers to pay Self- Assessed GST on 20th of a Month and square off the difference
liability, based on the Tax Statement of GSTN.
23. For Purchase from Unregistered Dealers, PAN may be insisted upon.
24. Reverse Tax Mechanism –Exempt Services may be excluded from levy of Reverse
Tax. Reverse Tax would be added to Liability by GSTN and auto- Reversed by GSTN in
the following month.
25. GSTN may cover Real Estate, Petroleum Products as well

These are some of the suggestions which should be adopted to make the gst structure
more flexible for the economy.
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References
1. Sreeshma, Aswamalika and Aparna (2018) “ A Study on Impact of GST on

Branded Textile Products” International Journal of Pure and Applied Mathematics
Special Issue, Volume 119 No. 10 ISSN: 1311-8080.
2. Virajdhakan, (June 2018) “An Analytical Study on Perceptive Impact of GST”
3. Jyotsna Oberoi (2018) “GST- A Game Changer for the Textile Sector in India”
ISSN Print: 2394-7500 ISSN Online: 2394-5869.
4. Rajatdeb,(2017) “ Tax Reforms and GST” Volume 7
5. clear tax (2017) “ Impact of GST on Textile Industry”
6. Sandeepan Banerjee, Mona Banerjee, Kishore Kumar Das(2016) “Rethinking the

process and challenges of Implementing GST in India” International Journal of
Commerce, Business and Management , vol 2 no 11, 2016
7. Tanushree Gupta (2016) “An Impact of Goods and Services Tax on Indian Textile
Industry” International Journal of Scientific and Engineering Research , Volume 7,
Issue ISSN 2229-5518
8. SubhamoyBanik 1, Advocate Arundhuti Das(2017) ,” GST in India-Impact and

Challenges” e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 19, Issue 12. Ver.
IV
9. Dr.YogeshKailashchandra Agrawal (2017) “ Goods and Service Tax and it’s
Impact on Indian Economy” ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 19
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10. Rajitturukmane and Sujitgulhane (2017) Volume 3 Issue 1
11. Sony Pandey (2018) “GST Impact on Textile Industry”
12. Madhukar N Hiregange(2017) “GST Impact on Textile Industry”
13. Urvashi gupta(2017) “An Impact of GST on Textile Industry in India”

International Open Access Journal, Volume 2, ISSN no 2456-6470
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Annexures: -
Questionnaire
1. Name: ___________________________
2. Age?
o Below 20
o Between 20 to 30
o Between 30 to 40
o Between 40 to 50
o Above 50
o
3. Income
o 0 to 1,50,000
o 1,50,000 to 2,00,000
o 2,00,000 to 5,00,000
o Above 5,00,000
4. Qualification: ______________________
5. Nature of Business under Textile Industry:

o Textile mills
o Textile product mills
o Apparels manufacturing
o Readymade garments
o Other
6. Are you satisfied with the present GST system prevailing in India?
o Yes
o No
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7. List the following factors (advantages related to GST) in a 3 point scale where 1 means
Dissatisfied, 2 means Satisfied and 3 means Very satisfied
Advantages 1 2 3
Reduction in
manufacturing
cost
Exports are
simplified
Credit on capital
goods
8. Do you face any complications in filing GST?

o Yes
o No
9. What is the impact of GST on your business?

o Good
o Bad
10. Are there any changes in the working pattern of your business?
o Yes
o No
11. List the following factors (disadvantages related to GST) in a 3-point scale where 1
means Least Severe, 2 means Severe and 3 means Very Severe
DISADVANTAGES 1 2 3
1. Increase in
operational cost.
2. GST on supply
Lack of knowledge
about GST
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12. How GST affected your annual sales?

o Increased
o Decreased
o No Change
13. Is there any change in the behaviour of customers?

o Yes
o No
14. Did you get any support from government for understanding GST?
o Yes
o No
15. Were you aware of GST before its implementation?

o Yes
o No
o Little Bit
16. Do you think GST process is more time consuming and costly?
o Yes
o No
17. Are you satisfied with the tax slab?

o Yes
o No
18. Do you find any positive change in your business?

o Yes
o No
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_____________________________________________________
Map of area of study (Ulhasnagar)
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A study on impact of GST on Textile Industry

1.1 Meaning of GST:

1.2 History of GST in India:

18%. In the future if the Government, in an unforeseen emergency, is required to

● August 2016: The Congress-led opposition finally agrees to the Government’s

Central GST Bill

1.3 Evolution of GST:

1.4 Tax Structure before GST:

1.5 When Did GST Start?

1.6 Decision taken by GST Council:

Some of the major decisions taken by the GSTC so far are:

1.7 Goods and Services Tax Network:

1.8 Key Features of the GST Regime:

The GST system is characterized by the following features:

1.9 Features of GST:

Some of the benefits of GST are:

1. Elimination of Multiple Taxes:

2. Saving more Money:

4. Easy Tax Filing and Documentation:

7. Reduction in Tax Evasion:

8. More Competitive Product:

11.Reduction of Manufacturing Cost:

Reduction of manufacturing costs due to lower burden of taxes on the manufacturing

12. Reduction in Burden on Common Man:

13. Increase in Production of Goods:

14. Control of Black Money:

15. Boost to the Indian economy in the long run.

1.11 Drawbacks of GST:

Technicalities of GST implementation in India have been criticized by global financial

1.13 GST Rates

12% This includes computers and processed food

● Sweets will also be taxable at 5%.

● GST also gives major push to domestic industries.

1.14 Payment Procedure under GST:

There are 3 ledgers prescribed by the government that is required to be maintained by

2. Electronic Cash Ledger

3. Electronic credit ledger

Interest on delayed payments

1.15 Why GST is needed in India?

Introduction of GST is considered to be a significant step in the reform of indirect

1. Impact of GST on Indian Economy:

2. Impact of GST on Consumers:

3. Impact of GST on Traders

1.16 Textile Industry:

1.17 Impact of GST on Textile Industry:

● Introducing a break in input credit changes

● Reduction in manufacturing cost.

● Allowing input capital on capital goods.

● Increase in export of textile Products.

Chapter 2: Research Methodology

2.1 Research Design

A research design is a comprehensive plan guiding researcher to achieve its objectives. It

It is an overall operational framework of the project that stipulates what information is to

A critical component of a successful research engagement is a set of clearly defined and

Objectives of Present Study:

1. To understand the concept of goods and service tax.

2.3 Methods of Data Collection:

Primary Data Collection: