Role of GST in Indian Economy: An Analysis

This paper is a comprehensive study of India's economic metamorphosis and the transformative journey of its taxation system, with a special emphasis on GST framework. India, an emerging economy, has welcomed dynamic economic catalysts, including demographic dividends, urbanization, and globalization. Despite its promising growth trajectory, India wrestles with challenges that call for improved economic governance and inclusive growth. Taxation, a critical aspect, has evolved from ancient levies to the modern British colonial era, culminating in the current constitutional taxation system outlined in the Seventh Schedule of the Indian Constitution. The advent of GST in 2017 was a landmark event, designed to alleviate the cascading effect of taxes and promote cooperative federalism. Its bifurcated structure, encompassing CGST, SGST and IGST for intra and interstate transactions, respectively, seeks to simplify tax laws and enhance the ease of doing business. However, persistent challenges such as technical glitches, compliance burdens for SMEs, and revenue shortfall necessitate ongoing refinement. This paper explores the diverse impact of GST across various sectors like retail, agriculture, IT, banking, and tourism. It also highlights the crucial role of GSPs in facilitating taxpayer compliance through digital platforms. Moreover, it sheds light on the promising intersection of AI and GST, elucidating AI's potential in data analysis, fraud detection, policy formulation, and taxpayer assistance. Despite its potential, the integration of AI in GST requires a balanced approach, taking into account data quality, security, ethics, accountability, resource readiness, and stakeholder education. In summary, this exposition traverses the historical, operational, and technological dimensions of GST's impact on India's economic landscape, advocating for a harmonious synergy between technological advancements and regulatory imperatives in the realm of taxation.