GST and Economic Growth: A Conceptual Review

One of the many landmark tax laws passed in India, to streamline the indirect tax system and establish a single national market is the Goods and Services Tax (GST). GST is a single-tiered tax that replaced multiple taxes levied at the center and by various states at the same time, came in effect from 1st July 2017, and is efficient, free of cascading, and aims to boost the economy. The study is conceptual and involves a reading and appraisal of the literature, government reports, government documents, and scholarly research that exists regarding the linkage between GST and economic growth. The study examines theoretically the effects of GST on important indicators of the economy such as tax compliance, governments revenue, ease of doing business, investment, industrial productivity, and integration. It also covers the issues that can arise in the implementation process of GST including issues related to compliance as they in relation to small businesses, technological issues, multiple taxes and administrative issues. The review has shown that GST has made a huge contribution to the efficiency and transparency of the tax regime in India and promoted its long-term economic uplift. But its overall effectiveness has hang-on to continuous policy changes, technological development, simplified compliance procedures and efficient administration. The study concludes the GST it is an important policy tool which can enhance growth of the economy by creating transparency, competition and efficient business environment in the country. The results are informative for policy makers, researchers and practitioners interested in the effect of GST on sustainable economic development.