GST Project

[Satish Silk Mills]
KLE SOCIETY’S
BASAVPRABHU KORE COLLEGE OF BUSINESS ADMINISTRATIONS,
CHIKODI
[Recognised by Govt. of Karnataka and Affiliated to R.C.U. Belagavi]
RANI CHANNAMMA UNIVERSITY, BELAGAVI
A PROJECT REPORT ON
“A study on impact of GST on financial statements related to textile industry with

special reference to Satish Silk Mills, Bhiwandi”
AT
“Satish Silk Mills”

In partial fulfilment of under graduate degree in
BACHELORS OF BUSINESS ADMINISTRATION
During the academic year 2021-2022
Submitted by
CHINNU ASHOK SHAH
REG NO.:-B1912407
Under the guidance of
INSTITUTIONAL GUIDE ORGANISATIONAL GUIDE
Prof. Roopali Kale Mr. Ramesh Mutha
[1]
[KLE SOCIETY’S BK BBA COLLEGE, CHIKODI]
[Satish Silk Mills]
KLE SOCIETY’S
BASAVPRABHU KORE COLLEGE OF BUSINESS ADMINISTRATIONS

CHIKODI
CERTIFICATE
This is to certify that Miss. CHINNU ASHOK SHAH Reg.no. B1912407 student of BBA 3rd year and
she has successfully completed her project report on “A study on impact of GST on financial
statements related to textile industry with special reference to Satish Silk Mills, Bhiwandi” under
our guidance and supervision during the year 2021-2022 submitted to RANI CHANNAMMA
UNIVERSITY, BELAGAVI in partial fulfilment of BBA course.
Internal guide Principal
Prof. Roopali Kale Dr. Amar Pashupatimath
[2]
[Satish Silk Mills]
DECLARATION FROM STUDENT
I Miss. Chinnu Ashok Shah the undersigned, hereby declare that the project
report entitled “A study on impact of GST on financial statements related to Textile industry with
special reference to Satish Silk Mills, Bhiwandi” has been prepared by me under the supervision and
guidance of Prof. Roopali Kale, Co-ordinator of CBAC, Chikodi. The report is submitted to Rani
Channamma University, Belagavi in partial fulfilment of the university rules and regulations for the
award of the Degree of Bachelors of Business Administration.
I further declare that this report is based on the original research report undertaken by me and has
not formed on basis for the award of any other Degree/ Diploma of RCU or any other University.
Date:-
Place: - Chinnu Ashok Shah
(Reg.No B1912407)
[3]
[Satish Silk Mills]
SATISH SILK MILLS

GROUND FLOOR H. NO :- 1226,GALA NO. A2 NEAR OM SING COMPANY. KHONEE VILLAGE
BHIWANDI ( DIST. THANE)
 satishsilkmills@gmail.com  +919860414406
CERTIFICATE FROM COMPANY GUIDE
This is to certify that, Miss. Chinnu Ashok Shah, student of Basavprabhu Kore College of
Business Administrations, Chikodi, has successfully completed her project work titled, “A study on
impact of GST on financial statements related to Textile industry with special reference to Satish
Silk Mills, Bhiwandi”.
During the period of work from 24-04-2021 to 25-05-2021, we found her to be sincere, honest,
dedicated and hardworking.
We wish every success during her future Endeavour.
(Owner)
Ramesh Mutha
[4]
[Satish Silk Mills]
ACKNOWLEDGEMENT
No work is said to be completed without thanking the people who have helped me in perceiving
any job. So this acknowledgement is for those who have played their role in completion of my project
entitled “A study on impact of GST on financial statements related to Textile industry with special
reference to Satish Silk Mills, Bhiwandi”
First and foremost I would like to express my sincere gratitude to Dr. Amar Pashupatimath,
Principle Basavprabhu Kore College of Business Administration, for his constant support and
encouragement in carrying out this project.
At the very outset I would like to thanks Mr. Ramesh Mutha my company guide who constantly guided
and inspired me in completion of this project. During this project I experienced the real environment,
market situation, etc. that are very much needed in this competitive environment.
My sincere thanks to my internal guide Prof. Roopali Kale for his valuable guidance in the
completion of this project successfully.
I owe a debt of gratitude to my parents, the silent guides in my life without their never ending
support, nothing would have been possible.
Dedicate my sincere thanks to all the teaching and non-teaching staff member of CBAC, for their
help.
I also extend my thanks to all other who have directly helped me in completion of this Project
Report.
[5]
[Satish Silk Mills]
CHAPTER SCHEME
The project is entitled as “A study on impact of GST on financial statements related to Textile industry
with special reference to Satish Silk Mills, Bhiwandi”
Chapter 1: This chapter includes introduction of the organisation, current situation of the organisation,
Issue/problem of the report, objectives of the report, Methodology/procedure adopted for
writing the report, project framework, Data and Information, tools and techniques of
project, report analysis.
Chapter 2: This chapter includes Research design, Data collection, Instruments for the Data collection
and Method for Data collection.
Chapter 3: This chapter includes Analysis and findings of the report.
Chapter 4: This chapter includes conclusion.
Chapter 5: This chapter includes Suggestion/ Recommendations for the report.
Chapter 6: This chapter includes Limitations of the study
[6]
[Satish Silk Mills]
List of Tables and Graphs
[7]
[Satish Silk Mills]
LIST OF TABLES
S.no Title Page no.
1 Trading A/c for the year 2017-18 12
4 Profit and loss A/c for the year 2017-18 18
7 Balance Sheet for the year 2017-18 24
[8]
[Satish Silk Mills]
LIST OF GRAPHS
S.no Title Page no.
1 Change in Purchase and sales before and after GST 16
Change in transport, electricity and factory charges before

2 16
and after GST
3 Change in gross profit before and after GST 17
4 Changes in expenses of the firm before and after GST 21
5 Change in salary of employee of the firm 22
6 Change in Net profit of the firm 23
7 Change in assets of the firm 27
Changes and addition of GST account in the balance sheet

8 28
of the firm
Effect of GST on demand of the Product/service of the

9 29
firm
10 Transition to GST 30
11 Problem faced at beginning of the GST 31
12 Effect on sales 32
13 Good taxation system 33
[9]
[Satish Silk Mills]
Executive Summary
Indian textile industry is the oldest industry in Indian Economy.
Textile industry contributes more than 10% of the India’s total export. Textile industry has both organised
and unorganised sector. To encourage the organised sector, reduce the production cost and to reduce the
burden on textile industry the Prime Minister of India Mr. Narendra Modi along with finance minister and
other ministers launched GST (Goods and Service Tax) in Indian. Textile industry had a great impact
after the launch of GST. It had both positive and negative impact.
GST stands for Goods and Service Tax. It is applied on sale of goods and service. The main aim of this
was to remove other indirect taxes throughout the India like value added tax. GST is applicable on Textile
industry on the raw material purchased by the manufacturer and the value that has been added to make the
product.
So to understand the impact of GST the researcher want to study the problem under the title “Impact of
GST on textile Industries with special reference to Satish Silk Mills”. The following are the objective of
the study like, to compare the financial position of industry before and after the GST, impact of pricing of
textile, impact on customer after pricing with GST.
To fulfil above objectives the researcher has conducted a survey where she has tried to understand the
impact of GST on financial Statement of Textile industry. Questionnaires were made to know the impact
of GST for purchase and sale of raw material and finished goods.
[10]
[Satish Silk Mills]
TABLE OF CONTENT
[11]
Sl.no Title Page no.
Introduction
[Satish Silk Mills]
1.1 Textile industry
1.2 GST (Goods and Service Tax)
1.2.1 Tax before implementing GST
1.2.2 Types of GST
1.3 Background of the study
1.3.1 GST
1.3.2 VAT
1.3.3 Difference between GST & VAT
1.4 Introduction of the Organisation
1 1-10
1.4.1 Satish Silk Mills
1.4.2 Organisational structure
1.4.3 Product/service profile
1.4.4 Future Plans
1.5 Current situation of the organisation
1.6 Objective of report
1.7 Methodology/procedure adopted for
writing the report
1.8 Tools and Techniques used for project
1.9 Data and information
Methodology
2.1 Research Design
2.2 Data collection
2.2.1 Primary Data
2.2.2 Secondary Data
2 12-13
2.3 Instrument for Data collection
2.4 Methods for Data Collection
2.5 Sample Design
2.6 Data analysis tools
2.7 Limitations of study
Analysis & Findings
[12]
3 BK BBA COLLEGE,
[KLE SOCIETY’S 3.1 Analysis
CHIKODI] 15-39
3.2 Findings
[Satish Silk Mills]
CHAPTER 01
[13]
[Satish Silk Mills]
CHAPTER 01
INTRODUCTION
1.1 TEXTILE INDUSTRY:-
Textile industry is one of the oldest industry in Indian Economy. It is the only industry after agriculture
which generates employment for both skilled and unskilled labour. It is the second largest employment
generating industry in India after agriculture. Textile industry offer around 35 million employment
opportunities in India. Indian textile industry contributes around 15% of India’s export. There are around
3400 textile mills in India, among which 80% are from private sector and the remaining are government.
India ranks 2nd in production of textile in world, expected around US $ 250 billion .6 per cent more than
the same period last year. India is the first Jute production country. India is second in Global textile
production and second in production of silk and cotton.
The archaeological surveys and studies have indicated that the people of Harrapan civilization were
familiar with weaving and the spinning of cotton for as long as four thousand years ago. Reference to
weaving and spinning materials is found in the Vedic Literature. There was textile trade in India during
the early centuries. Cotton fragments from Gujarat have been found in tombs at Fustat in Egypt,
indicating the existence of export of Indian textiles to Egypt during the medieval era.
Large quantities of north Indian silks were traded through the Silk Road in China to the western countries.
The Indian silks were often bartered for spices. During the late 17th and 18th century there were large
exports of Indian cotton to the western countries to meet the need of the European industries
during industrial revolution, apart from the domestic requirement at the Indian Ordnance Factories
Up until the 18th century, Mughal Empire was the most important centre of manufacturing in trade. Up
until 1750, India produced about 25% of the world's industrial output. The largest manufacturing industry
in Mughal Empire (16th to 18th centuries) was textile manufacturing,
particularly cotton textile manufacturing, which included the production of piece goods, calicos,
and muslins, available unbleached and in a variety of colours. The cotton textile industry was responsible
for a large part of the empire's international trade. Bengal had a 25% share of the global textile trade in
the early 18th century. Bengal cotton textiles were the most important manufactured goods in world trade
in the 18th century, consumed across the world from the Americas to Japan. The most important centre of
cotton production was the Bengal Subah province, particularly around its capital city of Dhaka. As Karl
Marx noted in 1853, the textile industry was a major component of economic income in the pre-colonial
[1]
[Satish Silk Mills]
Indian economy, writing that "The hand-loom and the spinning-wheel, producing their regular myriads of
spinners and weavers, were the pivots of the structure of that society".
Bengal accounted for more than 50% of textiles and around 80% of silks imported by the Dutch from
Asia and marketed it to the world, Bengali silk and cotton textiles were exported in large quantities to
Europe, Asia, and Japan, and Bengali muslin textiles from Dhaka were sold in Central Asia, where they
were known as "daka" textiles. Indian textiles dominated the Indian Ocean trade for centuries, were sold
in the Atlantic Ocean trade, and had a 38% share of the West African trade in the early 18th century,
while Bengal calicos were major force in Europe, and Bengal textiles accounted for 30% of total British
trade with Southern Europe in the early 18th century.
In early modern Europe, there was significant demand for textiles from the Mughal Empire,
including cotton textiles and silk products. European fashion, for example, became increasingly
dependent on textiles and silks imported from The Mughal Empire. In the late 17th and early 18th
centuries, The Mughal Empire accounted for 95% of British imports from Asia, conducted through the
auspices of the East India Company (EIC). After the abolition of slavery in British Empire, manufactures
in Britain started to look for alternative sources of cheap cotton, eventually settling on the East India
Company's possession in India. The EIC convinced many farmers to switch from subsistence farming to
producing and exporting huge amounts of cotton, after a long period of government protectionism
imposed over the British textile industry. Eventually, through the technical and marketing advances made
possible by colonisation, the traditional method of artisan textile production declined significantly, and
replaced with large scale factory production.
[2]
[Satish Silk Mills]
1.2 GST (GOODS AND SERVICE TAX):-
GST stands for Goods and Service Tax. It is an indirect tax which was introduced to replace other indirect
taxes such as value added tax, service tax, purchase tax, excise duty and many more. It is the only one tax
applicable all over India.
On July 1st 2017, the Goods and Services Tax implemented in India. But, the process of implementing
the new tax regime commenced a long time ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of
India, set up a committee to draft the GST law. In 2004, a task force concluded that the new tax structure
should put in place to enhance the tax regime at the time.
In 2006, Finance Minister proposed the introduction of GST from 1st April 2010 and in 2011 the
Constitution Amendment Bill passed to enable the introduction of the GST law. In 2012, the Standing
Committee started discussions about GST, and tabled its report on GST a year later. In 2014, the new
Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in Parliament and passed the bill in
Lok Sabha in 2015. Yet, the implementation of the law delayed as it was not passed in Rajya Sabha.
GST went live in 2016, and the amended model GST law passed in both the house. The President of India
also gave assent. In 2017 the passing of 4 supplementary GST Bills in Lok Sabha as well as the approval
of the same by the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new tax regime
implemented on 1st July 2017.
1.2.1 Tax Before Implementing GST:-
 The Centre and the State used to collect tax separately. Depending on the state, the tax regimes were
different.
 Even though import tax was levied on one individual, the burden was levied on another individual. In
the cases of direct tax, the taxpayer must pay the tax.
 Prior to the introduction of GST, direct and indirect taxes were present in India.
[3]
[Satish Silk Mills]
1.2.2 Types of GST:-
1. Central Goods and Services Tax: CGST is charged on the intra state supply of products and services.
2. State Goods and Services Tax: SGST, like CGST, is charged on the sale of products or services
within a state.
3. Integrated Goods and Services Tax: IGST is charged on inter-state transactions of products and
services.
4. Union Territory Goods and Services Tax: UTGST is levied on the supply of products and services in
any of the Union Territories in the country, viz. Andaman and Nicobar Islands, Daman and Diu, Dadra
and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied along with CGST.
[4]
[Satish Silk Mills]
1.3 BACKGROUND OF THE STUDY:-

1.3.1 GST (Goods and Service Tax):-
GST stands for Goods and Service Tax. It is an indirect tax which was introduced to replace other indirect
taxes such as value added tax, service tax, purchase tax, excise duty and many more. It is the only one tax
applicable all over India.
1.3.2 VAT (Value Added Tax):-
VAT stands for Value Added Tax. It is a consumption tax on goods and services levied at each stage of
supply chain from initial production to the point of sale.
1.3.3 Difference between GST and VAT:-
Point of Difference VAT (Value Added Tax) GST (Goods and Service Tax)
Taxable On sale of Goods On supply of Goods and service
 Same Tax rates across India

 Different VAT rates in each  For State, State tax (SGST),
state For central, Central tax
Rate of Tax
 Different VAT law for each (CGST) ,between other
state states, Integrated tax (IGST),
For union territory (UGST).
Authority Collected by the State Collected under SGST and CGST
 Different set of compliance  Unified set of compliance for

for movement of goods movement of goods
Compliance
 Preparation of various forms  Preparation of one E-way
for movement of goods bill.
Only three monthly returns.

Different return in different
Return One for Inward supply and
states.
one for outward supply.
[5]
[Satish Silk Mills]
1.4 INTRODUCTION OF THE ORGANISATION:-
1.4.1 Satish Silk Mills:-
Satish Silk Mills is a textile manufacturing organisation, which manufactures school uniforms, catering
uniforms and suiting & shirting fabrics. It was started in the year 2008. It is a HUF (Hindu Undivided
Family) firm. Its owner is Mr. Ramesh Mutha and Mr. Satish Mutha. Its starting investment consisted of
24 machines, which cost up to ₹1crore, land of 9000 sqft which cost around ₹1Lakh and miscellaneous
of 45000, which totalled up to ₹2crore 45 thousand.
1.4.2 .Organisational Structure:-
Satish Silk Mills
Partners
Ramesh Satish
Mutha Mutha
8 Employees
[6]
[Satish Silk Mills]
1.4.3 Product or service profile:-
Satish Silk Mills, manufactures and distributes various types of textile.
1.4.4 Future plans:-
The future plan of Satish Silk Mills is to expand their manufacturing unit and distribute their products to
some more other places.
[7]
[Satish Silk Mills]
1.5 CURRENT SITUATION OF THE ORGANISATION:-
Satish Silk Mills is a leading manufacturer and distributor of checks textile in Maharashtra. Their starting
investment was 2 Crore 45 thousand and currently their turnover is around 10 Crore per year.
1.6 OBJECTIVE OF THE REPORT:-
 To study the impact of GST on production and selling cost of textile industry.
 To study the impact of GST on firms financial statement(comparative analysis before and after
GST)
 Impact of GST on customers.
1.7 METHODOLOGY/PROCEDURE ADOPTED FOR WRITING THE REPORT:-
Both primary and secondary data were used to write the report.
Primary Data:-
Primary data is a type of data that is collected by researchers directly from main sources through
interviews, surveys, experiments, etc. Primary data are usually collected from the source—where the data
originally originates from and are regarded as the best kind of data in research.
Secondary Data:-
Secondary data is the data that has already been collected through primary sources and made readily
available for researchers to use for their own research. It is a type of data that has already been collected
in the past.
1.8 TOOLS AND TECHNIQUES USED FOR PROJECT:-
 Primary data:- Questionnaire, Interview

 Secondary data:- Financial statements of Satish Silk Mills, Google docs, Google, Wikipedia, MS
Excel, GST portal etc.
[8]
[Satish Silk Mills]
1.9 DATA AND INFORMATION:-
Satish Silk Mills had maintained the computerized books of accounts i.e. Bank book, Cash book, General
Ledger, Journal register, Stock register, Sales and Purchase registers and accounts are on “Mercantile”
system of Accounting.
Following is the information regarding their assets, debtors and creditors:-
Assets: - ₹ 17,799,155.23
Sundry Debtors: - ₹4,302,372.00
Sundry Creditors: - ₹2,298,391.00
[9]
[Satish Silk Mills]
CHAPTER 02
[10]
[Satish Silk Mills]
CHAPTER - 2
METHODOLOGY
2.1 RESEARCH DESIGN:-
Bhiwandi is a city in Thane district in konkan division of Maharashtra, India. Bhiwandi is a commercial
city and a major trade centre. It has the population of 874,032. In Bhiwandi there are more than 100
textile manufacturing industries. I am doing my project under the guidance of one of the Textile
manufacturing industry of Bhiwandi, Satish Silk Mills, Bhiwandi.
2.2 DATA COLLECTION:-
The data will be collected through various primary and secondary data.
2.2.1 Primary Data:-
Primary sources like observation, personal interview, telephonic interview etc.
2.2.2 Secondary Data:-
Secondary sources like internet, books, newspaper, journals etc.
2.3 INSTRUMENTS FOR DATA COLLECTION:-
Instruments like questionnaires, interviews, inventories, observation etc. were used.
2.4 METHODS FOR DATA COLLECTION:-
Data collection methods like survey, questionnaires, interview and focus group were obtained.
2.5 SAMPLE DESIGN:-
The target population for the study are the textile manufacturing firms and customers of Bhiwandi area.
The researcher has taken the sample size of 5 that is, 5 manufacturing firm.
Simple random sampling is used to identify the respondents to facilitate data collection in the short
duration of time available. The data will also be collected through observation and interview method.
That is by observing various textile manufacturing firms and customers.
[11]
[Satish Silk Mills]
For conducting survey, questionnaire method will be used. 10 manufacturing firms and 10 customers will
be surveyed. The questionnaire includes 14 questions which includes demographic questions and the
questions relating to pricing of textiles before and after the GST.
2.6 DATA ANALYSIS TOOLS:-
Data analysis tools like MS-Excel, Charts, Google sheets, Graphs will be used.
2.7 LIMITATIONS OF THE STUDY:-
 The study is conducted for the textile manufacturing firm which is located in Bhiwandi, which
may not be applicable to all the textile industries. Hence, the results cannot be generalised.
[12]
[Satish Silk Mills]
CHAPTER 03
[13]
[Satish Silk Mills]
CHAPTER 03
ANALYSIS & FINDINGS
3.1 ANALYSIS: -
Following are the Trading Account of Satish Silk Mill before and after the introduction of GST
Particulars Amount Particulars Amount
To opening stock 34,414,998.00 By Sales 51,202,908.00
To Purchases 29,686,614.00 By Closing Stock 1,933,379.00
To Electricity charges 254,228.00
To Factory wages 400,463.00
To Mehta charges 158,000.00
To Mukadami Charges 172,000.00
To Transport Charges 301,641.00
To Weaving charges 13,162,534.00
To Yarn Job Charges 2,972,186.00
To Gross Profit 2,613,623.00
53,136,287.00 53,136,287.00
Table no.1 Trading Account for the year 2017-2018
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[Satish Silk Mills]
To opening stock 1,933,379.00 By Sales 49,087,788.60
To Purchases 28,276,660.00 By Closing stock 2,017,454.00
To Beam Charges 225,447.00
To Electricity Charges 288,295.00
To Factory charges 121,011.00
To Mehta charges 164,000.00
To Mukadami Charges 178,000.00
To Transport Charges 231,652.00
To Weaving Charges 13,855,006.00
To Yarn Job charges 2,932,103.80
To Dyeing Charges 507,148.57
To Mill Store 992.00
51,105,242.00 51,105,242.00
[15]
[Satish Silk Mills]
To opening stock 23,64,524 By Sales 1,86,11,389.48
To Purchases 52,27,471 By Closing Stock 12,89,177
To Dyeing charges 14,89,161
To Electricity Charges 5,21,930
To Factory Insu. 7,201
To Factory wages 8,74,450
To Mehta charges 2,88,590
To Mukadami charges 2,62,896
To Transport Charges 41,780
To Weaving charges 43,79,126
To Yarn Job charges 5,62,213
1,99,00,566.48 1,99,00,566.48
[16]
[Satish Silk Mills]
[17]
[Satish Silk Mills]
60,000,000
50,000,000
40,000,000
2017-18
30,000,000 2018-19
2021-2022
20,000,000
10,000,000
0
Purchases Sales
Graph no.1 Changes in purchase and sales before and after GST
Source: Table no.1 and Table no.2
Conclusion: - The above graph shows that there was a less difference in purchases and sales before and
after launching of the GST. In the year 2017-18 when the GST was launched, the purchases of the firm
were less as compared in the year 2018-19 and even sales of the firm was reduced. The reason for this
drastic change was change in price of the raw material that changed the production cost and led to
increase in the price of Finished Goods.
[18]
[Satish Silk Mills]
600,000
500,000
400,000
2017-18
300,000 2018-19
2021-2022
200,000
100,000
0
Transport charges Electricity Charges Factory Charges
Graph no.2 Changes in Transport, Electricity and Factory Charges before and after GST
Source: Table no.1 and Table no.2
Conclusion:- The above graph shows that the Electricity charge was increased due to the introduction of
GST, whereas the transport charge was reduced which was due to E-way bill and factory charges was
highly decreased.
[19]
[Satish Silk Mills]
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000 2017-18
2018-19
2,000,000 2021-2022
1,500,000
1,000,000
500,000
0
Gross Profit
Graph no. 3 Changes in Gross Profit before and after GST
Source: Table no. 1 and Table no.2
Conclusion: - As shown in the Graph no. 1, the sales of the firm after the GST was reduced, that indicates
that the Gross Profit was the firm was also decreased.
[20]
[Satish Silk Mills]
Following are the Profit and Loss account of the Satish Silk Mills before and after the introduction of
GST
Table no.4 Profit and Loss account for the year 2017-2018
Expenses Amount Income Amount

To Accounting Charges 36,000 By Gross Profit 26,13,623
To Audit Fees 15,000 By Interest Received 53,468
To Bank Charges 7,702
To Carry and forward charge 84,170
To Depreciation 3,674
To Donation 5,100
To Insurance 11,364
To Interest on Loan 5,89,896
To Legal Charge 25,500
To Office Exp. 50,125

To Petrol Exp. 28,200
To Printing and Stationary 5,620
To Salary 9,16,080
To Sundry Expenses 12,756
To TATA Aig 9,028
To Telephone Exp. 20,156
To Travelling Exp. 40,115
To Vat Audit Fees 5,000
To Net Profit 8,01,605
26,67,091.00
26,67,091.00
[21]
[Satish Silk Mills]

To Accounting Charges 42,000 By Gross Profit 23,91,547
To Audit Fees 15,000 By Interest Received 290
To Bank Charges 10,846
To Design charge 30,000
To Depreciation 23,859
To Gram Panchayat Tax 31,842
To Insurance 20,682
To Interest on Loan 5,03,260
To Legal Charge 40,000
To Office Exp. 36,141

To Petrol Exp. 28,500
To Printing and Stationary 32,680
To Salary 6,58,000
To Sundry Expenses 8,574
To Repair and Maintenance 8,203
To Telephone Exp. 12,400
To Travelling Exp. 34,845
To Vat Audit Fees 5,000
To Net Profit 8,50,005
23,91,837.58
23,91,837.58
[22]
[Satish Silk Mills]

To Accounting Charges 36,000 By Gross Profit 38,81,223.93
To Audit Fees 12,000 By Interest Received 46,070
To Bank Charges 1,344.44 By Vat refund 4,678
To Bike insurance 1,510
To Brokerage 61,272
To Depreciation 13,08,009
To ICICI insurance 24,840
To Interest on loan 5,21,501
To Interest in term loan 6,65,405
To Legal fees 50,000

To Office Expense 38,696
To Packing charges 21,218
To Petrol Charges 45,480
To Printing & Stationary 3,540
To Repairs & maintenance 3,600
To Salary 3,20,000
To Stock insurance 10,800
To Sundry expenses 24,653
To Telephone Expenses 10,125
To travelling charges 42,158
To Net Profit 7,29,820.49
39,31,971.93 39,31,971.93
[23]
[Satish Silk Mills]
60,000
50,000
40,000
30,000 2017-18
2018-19
2021-2022
20,000
10,000
0
Office Expenses Petrol Expenses Telephone Travelling
Expenses Expenses
Graph no.4 Changes in the expenses of the firm.

Source: - Table no.3 and Table no.4
Conclusion: - The above graph shows that expenses of the firm were reduced. Office expenses were
highly reduced, telephone expenses were also reduced, travelling expenses were highly reduced due to E-
way bill but petrol expenses were increased.
[24]
[Satish Silk Mills]
1,000,000
900,000
800,000
700,000
600,000
2017-18
500,000 2018-19
2021-2022
400,000
300,000
200,000
100,000
0
Salary
Graph no. 5 Changes in Salary of the employee of the firm

Source: - Table no.3 and Table no.4
Conclusion: - The above graph shows the changes in salary due to GST. the graph states that due to GST
the production cost has been increased or the Profit of the firm has been reduced due to which the salary
of the employees of the firm is also been reduced.
[25]
[Satish Silk Mills]
Chart Title
860,000
840,000
820,000
800,000
780,000 2017-18
2018-19
760,000 2021-2022
740,000
720,000
700,000
680,000
660,000
Net Profit
Graph no. 6 Change in Net Profit of the Firm

Source: - Table no. 3 and Table no. 4
Conclusion: - The above graph shows that the profit of the firm was decreased due to GST.
[26]
[Satish Silk Mills]
Following are the Balance Sheet of the Satish Silk Mills before and after the introduction of GST
Liabilities Amount Assets Amount
19,27,349.00
Capital Account 22,05,099.50 Fixed Assets
19,33,379.00
Unsecured Loan 58,59,426.00 Closing Stock
86,19,903.00
Sundry Creditors 58,03,111.00 Sundry debtors
77,439.00
Vat receivables
12,95,665.50
Cash at Syndicate Bank
13,901.00
Cash in Hand
1,38,67,636.50 1,38,67,636.50
Table no.7 Balance Sheet for the year 2017-2018
[27]
[Satish Silk Mills]
Capital Account 26,88,227.08 Fixed Assets 19,88,144.19
Unsecured Loan 46,38,731.00 Closing Stock 20,17,454.00
Sundry Creditors 54,31,126.00 Sundry debtors 76,69,106.00
GST Account 4,39,101.27
Vat receivables 67,960.00
5,54,458.62
Cash at Syndicate Bank
21,860.00
Cash in Hand
1,27,58,084.08 1,27,58,084.08
[28]
[Satish Silk Mills]
45,52,714.23 93,08,162.44
Capital Account Fixed Assets
68,31,824.00 12,89,177.00
Secured loans Closing Stock
41,16,226.00 43,04,372.00
Unsecured loans Sundry debtors
22,98,391.00 23,89,805.41
Sundry Creditors GST Account
308419.65
Canara Bank
88,403.73
Central bank of India
Cash in Hand 110815
1,27,58,084.08 1,27,58,084.08
[29]
[Satish Silk Mills]
10,000,000
9308162.44
9,000,000
8,000,000
7,000,000
6,000,000
2017-18
5,000,000
2018-19
2021-22
4,000,000
3,000,000
1988144.19
1927349
2,000,000
1,000,000
0
Assets
Graph no.7 Changes in the Assets of the firm
Source: - Table no.7, table no.8 and table no.9
Conclusion: - The above graph shows that the assets of the firm were increased after the implementation
of the GST, after the few years the assets of the company were highly increased. Assets includes fixed
assets such as machinery etc.
[30]
[Satish Silk Mills]
3,000,000
2,500,000 2,389,805.41
2,000,000
2017-18
1,500,000 2018-19
2021-22
1,000,000
500,000 439,101.27
77439
67,960.00
0.00 0
0
Vat receivables GST Account
Graph no. 8 Changes and Addition of GST account in the Balance Sheet
Source: - Table no.7, table no.8 and table no.9
Conclusion: - The above graph shows that in the year of 2017-18 and 2018-19, the VAT return was
deceased because of implementation of GST replacing it with VAT. And in the year 2021-22 there was
no Vat return as the GST was fully applicable throughout the country in the year 2021-22.
The above graph states that there was 0 GST return in the year 2017-18, and in the next year i.e. 2018-19
GST return was applicable and by the year of 2021-22 GST return was highly increased.
[31]
[Satish Silk Mills]
Following is the analysis found through the questionnaire
Manufacturer survey:-
Q. 1: Do you feel that the introduction of GST in India has affected the demand for
the product/service?
a) Positively b) Negatively c) No impact
No impact %
10%
Positively
Positively Negatively
50%
No impact
Negatively
40%
Graph no. 9 Effect of GST on demand of Product/service
Inference: - The above graph shows that 10% of the manufacturer say that GST had no impact on their
manufacturing of textile, 40% of manufacturer say that GST had very bad impact on their manufacturing
and 50% of the manufacturer had positive impact on their manufacturing.
Conclusion: - It shows that 50% of the textile manufacturing industries had Positive impact due to
introduction of GST.
[32]
[Satish Silk Mills]
[33]
[Satish Silk Mills]
Q. 02: Do you think transition to GST regime was__________
a) Smoother b) Difficult c) Very difficult
%
Smoother
20%
Very difficult
30%
Smoother
Difficult
Very difficult
Difficult
50%
Graph no. 10 transition to GST
Inference: - The above graph shows that 20% of the manufacturers had a smooth transition to GST, 50%
of the manufacturer had a difficult transition to GST and 30% of the manufacturer had a very difficult
transition to GST.
Conclusion: - It shows that it was 50% difficult for the textile manufacturing industry for transition to
GST regime.
[34]
[Satish Silk Mills]
Q. 3: What were the problems faced by you at the beginning of launch of GST?
a) Cost of Compliance
b) Issues with GST network portal
c) Procedures and Documentation
d) Lack of trained manpower in the company
e) Lack of IT infrastructure
Lack of IT
infrastruc- cost of Compliance
ture 10%
Issues with
20% GSt net-
work portal
10%
cost of Compliance
Issues with GSt network portal
Procedure and documentation
Lack of trained manpower in the
company
Procedure Lack of IT infrastructure
and doc-
umenta-
tion
20%
Lack of
trained
manpower
in the
company
40%
Graph no. 11 problems faced at the beginning of GST
Inference: - The above graph shows that 10% of the manufacturing industries had the problem of cost
compliance, 10% of the manufacturers had issues with the GST network portal, 20% of the manufacturers
had problem in procedures and documentation, 40% of the manufacturers had lack of trained manpower
in the company and 20% of the manufacturers had lack of IT infrastructure.
Conclusion: - It shows that 40% of the manufacturing industries had problem with Lack of trained
manpower in the company.
[35]
[Satish Silk Mills]
4) How did sales of your company effect due to GST?
a) High b) Low c) Same
Same
22%
High High
44%
Low
Same
Low
33%
Graph no.12 effect on sales
Inference: - The above graph shows the effect of GST on sales of the company, 45%
of the company had increase in sales, 33% of the company had decrease in sales and
22% of the company had same effect in sale due to introduction of sales.
Conclusion: - It shows that about 45% of the company had increase in the sales due to
introduction of the GST.
[36]
[Satish Silk Mills]
5) According to you what taxation system was good?
a) Indirect tax b) GST
Indirect Tax
30%
Indirect Tax
GST
GST
70%
Graph no.13 Good taxation system
Inference: - The above graph shows that about 70% of the company says that GST is
the good taxation system compared to Indirect Tax.
Conclusion: - Its shows that GST is the good taxation system for the company.
[37]
[Satish Silk Mills]
3.2 FINDINGS
 The graph no.01 shows that there was a less difference in purchases and sales
before and after launching of the GST. In the year 2017-18 when the GST was
launched, the purchases of the firm were less as compared in the year 2018-19 and
even sales of the firm was reduced. The reason for this drastic change was change in
price of the raw material that changed the production cost and led to increase in the
price of Finished Goods.
 The graph no.02 shows that the Electricity charge was increased due to the
introduction of GST, whereas the transport charge was reduced which was due to E-
way bill and factory charges was highly decreased.
 As shown in the Graph no. 1, the sales of the firm after the GST was reduced, that
indicates that the Gross Profit was the firm was also decreased.
 The graph no.4 shows that expenses of the firm were reduced. Office expenses were
highly reduced, telephone expenses were also reduced, travelling expenses were
highly reduced due to E-way bill but petrol expenses were increased.
 The graph no.5 shows the changes in salary due to GST. the graph states that due to
GST the production cost has been increased or the Profit of the firm has been
reduced due to which the salary of the employees of the firm is also been reduced.
 The graph no.6 shows that the profit of the firm was decreased due to GST.
 The graph no.7 shows that the assets of the firm were increased after the
implementation of the GST, after the few years the assets of the company were
highly increased. Assets includes fixed assets such as machinery etc.

[38]
[Satish Silk Mills]
 The graph no.8 shows that in the year of 2017-18 and 2018-19, the Vat return was
deceased because of implementation of GST replacing it with VAT. And in the year
2021-22 there was no Vat return as the GST was fully applicable throughout the
country in the year 2021-22.The above graph states that there was 0 GST return in
the year 2017-18, and in the next year i.e. 2018-19 GST return was applicable and
by the year of 2021-22 GST return was highly increased.
 The graph no.9 shows that 10% of the manufacturer say that GST had no impact on
their manufacturing of textile, 40% of manufacturer say that GST had very bad
impact on their manufacturing and 50% of the manufacturer had positive impact on
their manufacturing.
 The graph no.10 shows that 20% of the manufacturers had a smooth transition to
GST, 50% of the manufacturer had a difficult transition to GST and 30% of the
manufacturer had a very difficult transition to GST.
 - The graph no.11 shows that 10% of the manufacturing industries had the problem
of cost compliance, 10% of the manufacturers had issues with the GST network
portal, 20% of the manufacturers had problem in procedures and documentation,
40% of the manufacturers had lack of trained manpower in the company and 20% of
the manufacturers had lack of IT infrastructure.
 The graph no.12 shows the effect of GST on sales of the company, 45% of the
company had increase in sales, 33% of the company had decrease in sales and 22%
of the company had same effect in sale due to introduction of sales.
[39]
[Satish Silk Mills]
 The graph no.13 shows that about 70% of the company says that GST is the good
taxation system compared to Indirect Tax.
 It shows that 50% of the textile manufacturing industries had Positive impact due to
introduction of GST.
 It shows that it was 50% difficult for the textile manufacturing industry for
transition to GST regime.
 It shows that 40% of the manufacturing industries had problem with Lack of trained
manpower in the company.
 It shows that about 45% of the company had increase in the sales due to
introduction of the GST.
 Its shows that GST is the good taxation system for the company.
[40]
[Satish Silk Mills]
CHAPTER 04
[41]
[Satish Silk Mills]
CHAPTER 04
CONCLUSION
By analysing the financial statements of the Satish Silk Mills it was found that the purchase cost of the
raw material was reduced compared to previous year, and the sales of the company was reduced
compared to previous year but it was thrice the higher than the purchase of the company. It was also
observed that transport charges of the company was reduced, the reason for this was the introduction of
E-way bill with GST which made decrease in transport charges and easy procedure and documentation.
It was also observed that the Gross profit of the company was increased compared to previous year Gross
profit, but the net profit of the company was reduced.
It was observed that assets of the company were increased, assets include machinery. New technology
machinery were installed in the company for effective and efficient manufacturing of finished goods.
One of the most positive things of GST was that compared to VAT taxation system, GST return was more
and which made increase in assets of the company.
Through questionnaire, it was observed that most of the companies faced and are even facing some of the
problems like, lack of IT infrastructure, lack of trained manpower, but it was observed that 50% of the
companies had positive impact after the introduction of the GST, and it was also observed that most of the
companies said that GST is the best taxation system as compared to VAT and other indirect tax.
We can conclude that introduction of GST had a positive effect on the company, but government should
take initiative to train the employer about the GST, as there is lack of IT infrastructure and lack of trained
manpower.
[42]
[Satish Silk Mills]
CHAPTER 05
[43]
[Satish Silk Mills]
CHAPTER 05
SUGGESTION/RECOMMENDATION
1) Looking at the problems faced by the company due to introduction of GST, it is suggested that
GST network portal should be made easily accessible.
2) Systematic initiative should be taken to train the citizens about the GST.
3) A supportive mechanism for promotion and implementation of GST should be made.
[44]
[Satish Silk Mills]
CHAPTER 06
[45]
[Satish Silk Mills]
CHAPTER 06
LIMITATIONS OF THE STUDY
Limitations of the study:-
 No proper information related to the financial statements were shared.
 Full details of GST were not shared.
 The study is conducted for the textile manufacturing firm which is located in
Bhiwandi, which may not be applicable to all the textile industries. Hence, the results
cannot be generalised.
[46]
[Satish Silk Mills]
6.1 BIBLIOGRAPHY:-
 https://satish-silk-mills-clothes-and-fabric-manufacturer.business.site/
 https://www.google.com
 https://en.wikipedia.org/wiki/Main_Page
 https://www.ibef.org/industry/textiles
 https://en.wikipedia.org/wiki/Textile_industry_in_India
 https://gstcouncil.gov.in/sites/default/files/gst-knowledge/Short-ppt.pdf
 https://www.questionpro.com/blog/research-design/
 http://www.a2ztaxcorp.com/wp-content/uploads/2018/06/PHD-
Chambers-GST-Survey-2018.pdf
 https://www.investopedia.com/terms/v/valueaddedtax.asp
 https://www.formpl.us/blog/secondary-data
[47]
[Satish Silk Mills]
6.3 QUESTIONNAIRE:-
Questionnaire for Textile Industry
Questionnaire for GST implementation
I’m a student of KLE society’s Basavprabhu Kore college of Business Administration, Chikodi. I’m
doing a Project report on “A study on impact of GST on financial statements of the Textile Industry with
special reference to Satish Silk Mills”, so I request you to help me in this project to get the result of the
report by answering the following questions
[48]
[Satish Silk Mills]
1) Name:_____________________________________________________________
2) Organisation Name:-________________________________________________
3) Address:-
___________________________________________________________________
4) Yearly Turnover:-
____________________________________________________
5) No. of employees in the firm:-_____________________________________
6) Please tick whether you are
a) Small unit b) Medium unit c) Large unit
7) Do you feel that the introduction of GST in India has affected the demand for
the product/service?
b) Positively b) Negatively c) No impact
8) Do you think transition to GST regime was__________
b) Smoother b) Difficult c) Very difficult
9) What were the problems faced by you at the beginning of launch of GST?
f) Cost of Compliance
g) Issues with GST network portal
h) Procedures and Documentation
i) Lack of trained manpower in the company
j) Lack of IT infrastructure
10) Did GST effect on Production cost?
[49]
[Satish Silk Mills]
a) Yes b) No c) Not much
11) How did sales of your company effect due to GST?
a) High b) Low c) Same
12) According to you what taxation system was good?
a) Indirect tax b) GST
13) Why? ____________________________________________________________
__________________________________________________________________
14) What is your view on Introduction of GST?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Thank you
[50]

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[Satish Silk Mills]

BASAVPRABHU KORE COLLEGE OF BUSINESS ADMINISTRATIONS,

[Recognised by Govt. of Karnataka and Affiliated to R.C.U. Belagavi]

RANI CHANNAMMA UNIVERSITY, BELAGAVI

“A study on impact of GST on financial statements related to textile industry with

“Satish Silk Mills”

BACHELORS OF BUSINESS ADMINISTRATION

During the academic year 2021-2022

CHINNU ASHOK SHAH

Under the guidance of

INSTITUTIONAL GUIDE ORGANISATIONAL GUIDE

Prof. Roopali Kale Mr. Ramesh Mutha

BASAVPRABHU KORE COLLEGE OF BUSINESS ADMINISTRATIONS

Internal guide Principal

Prof. Roopali Kale Dr. Amar Pashupatimath

DECLARATION FROM STUDENT

Place: - Chinnu Ashok Shah

SATISH SILK MILLS

CERTIFICATE FROM COMPANY GUIDE

We wish every success during her future Endeavour.

Chapter 3: This chapter includes Analysis and findings of the report.

Chapter 4: This chapter includes conclusion.

Chapter 5: This chapter includes Suggestion/ Recommendations for the report.

Chapter 6: This chapter includes Limitations of the study

List of Tables and Graphs

S.no Title Page no.

1 Trading A/c for the year 2017-18 12

2 Trading A/c for the year 2018-19 13

3 Trading A/c for the year 2021-22 14

4 Profit and loss A/c for the year 2017-18 18

5 Profit and loss A/c for the year 2018-19 19

6 Profit and loss A/c for the year 2021-22 20

7 Balance Sheet for the year 2017-18 24

8 Balance Sheet for the year 2018-19 25

9 Balance Sheet for the year 2021-22 26

1 Change in Purchase and sales before and after GST 16

Change in transport, electricity and factory charges before

3 Change in gross profit before and after GST 17

4 Changes in expenses of the firm before and after GST 21

5 Change in salary of employee of the firm 22

6 Change in Net profit of the firm 23

7 Change in assets of the firm 27

Changes and addition of GST account in the balance sheet

Effect of GST on demand of the Product/service of the

11 Problem faced at beginning of the GST 31

13 Good taxation system 33

Indian textile industry is the oldest industry in Indian Economy.

1.1 TEXTILE INDUSTRY:-

1.2 GST (GOODS AND SERVICE TAX):-

1.2.1 Tax Before Implementing GST:-

1.2.2 Types of GST:-

1.3 BACKGROUND OF THE STUDY:-

1.3.2 VAT (Value Added Tax):-

1.3.3 Difference between GST and VAT:-

Taxable On sale of Goods On supply of Goods and service

 Same Tax rates across India

Authority Collected by the State Collected under SGST and CGST

 Different set of compliance  Unified set of compliance for

Only three monthly returns.

1.4 INTRODUCTION OF THE ORGANISATION:-

1.4.1 Satish Silk Mills:-

1.4.2 .Organisational Structure:-

Satish Silk Mills