Answer: 

The goods and services tax (GST), introduced in India on 1 July 2017, replaced a host of indirect taxes being levied by the central and state governments, which has changed the taxation landscape. The underlying theme was to have a ‘one nation one tax’ which would improve ease of doing business for taxpayers, bring in transparency, ensure timely compliance and ultimately reduce the tax burden for the common man.

The GST replaced the following taxes:

(i) Taxes currently levied and collected by the Centre:

1. Central Excise duty
2. Duties of Excise (Medicinal and Toilet Preparations)
3. Additional Duties of Excise (Goods of Special Importance)
4. Additional Duties of Excise (Textiles and Textile Products)
5. Additional Duties of Customs (commonly known as CVD)
6. Special Additional Duty of Customs (SAD)
7. Service Tax
8. Central Surcharges and Cesses so far as they relate to supply of goods and services

(ii) State taxes that would be subsumed under the GST are:

1. State VAT
2. Central Sales Tax
3. Luxury Tax
4. Entry Tax (all forms)
5. Entertainment and Amusement Tax (except when levied by the local bodies)
6. Taxes on advertisements g. Purchase Tax
7. Taxes on lotteries, betting and gambling
8. State Surcharges and Cesses so far as they relate to supply of goods and services

Positive Implication:

• According to the Economic Survey, though there has been an improvement in tax to GDP ratio over the last six years, gross tax revenues as a proportion of GDP has declined by 0.3 percentage points in 2018-19 over 2017-18.
• In the first year of implementation of GST, revenues grew by 11.9% and the tax  buoyancy was 1.2 %
• Some other analyses show that the tax-to-final consumption expenditure also grew from 10.3% in the year before GST (2015-16) to 11.9% in 2017-18
• Post the introduction of the e-way bill system, collections rose. The GST revenue for 2017-18 fiscal was Rs 7.41 lakh crore
• People filing tax returns: Increased from 5.43 crore in FY16-17 to 6.84 crore in FY17-18.
• Formalization of the economy: Formalization of the economy seems to have gathered pace. Rise in the Employees’ Provident Fund Organisation subscriber base provides evidence for the fact
• Registration of business: Increase in the number of businesses registered. This implies that the tax base has expanded with GST. Registration under the old indirect tax regime was 6.4 million. Registration of businesses increased to 11.2 million under GST 5. Facilitated transport of goods between states with the introduction of the E-Way Bill system 

Issues with the GST:

• The gross GST collections are short of expectations. The shortfall is a problem especially for the States because while they have given up a significant part of the taxation powers, they will be compensated only for five years for any shortfall in revenues relative to a projected revenue growth target of 14 per cent per annum.
• While month-wise gross GST collections have been rising almost consistently over time, collections by or due directly to the States have been quite volatile and have not displayed the same consistent rise.
• The GST revenue accruing to the Central divisible pool is doing better than that received by the States from the State GST (SGST) and Integrated GST (IGST). This raises concerns about what the revenue position of the States would be three years from now.
• Further, there has been a decline in monthly GST collection in the current fiscal, with monthly CHST collection barely crossing 100000 crore mark
• Finally, while many States seem to be losing out as of now with regard to the minimum revenue growth targeted after the move to the GST regime, the new structure of indirect taxation seems geared to accentuate inter-State inequalities.