By- Danish Raza, LLM Candidate, Amity University, Noida
Abstract
The
enactment of the Goods and Services Tax (GST) through the Constitution (One
Hundred and First Amendment) Act, 2016 was a milestone in India’s indirect
taxation system. The main objective of implementing GST is to simplify the
taxation process, eliminate inefficiencies, and improve efficiency. This paper
provides an analysis of the effectiveness of the GST in reducing
tax evasion, considering the perspective of a taxpayer
in India. The study
considers both the theoretical and practical aspects of GST in relation to tax
compliance.
The discussion starts with an understanding of the concepts
related to tax compliance, mainly deterrence theory and voluntary
compliance theory. These theories will be used to assess the efficacy of the
GST in incorporating legal compulsion and simplicity. Some of the key
components of GST, including Input Tax Credit (ITC), e-invoicing, e-way bills,
and digital technology enabled through the Goods and Services Tax Network, will
be evaluated to examine whether the GST can establish a self-enforcing
mechanism for tax compliance.
Additionally, the implications of GST on the formalization of the economy
and the broadening of the tax
base will be considered.
Moreover, the research also considers the perspectives of some of the eminent
economists and policymakers
such Despite all the positive impacts
that GST has had, there are still certain factors such as compliance costs,
inefficiency in technology use, constant changes in policies, and
problems facing small and medium-sized enterprises (SMEs) that have had an
impact on the efficiency of GST.
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