Q20.Enumerate the indirect taxes which have been subsumed in the goods and services tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.

The Goods and Services Tax (GST), implemented in July 2017, marked a significant reform, unifying India's complex indirect tax structure by subsuming numerous central and state levies into a single national tax.

Indirect Taxes Subsumed under GST

• Central Excise Duty
• Service Tax
• Additional Customs Duties (CVD, SAD)
• Cesses and Surcharges

• State VAT/Sales Tax
• Entertainment Tax (excluding those levied by local bodies)
• Luxury Tax
• Entry Tax
• Purchase Tax
• Octroi
• Taxes on advertisements
• State-level Cesses and Surcharges

Revenue Implications of GST

Post-implementation, GST revenue initially experienced a dip. This was primarily due to transitional challenges, rate rationalization, and higher input tax credit claims by businesses.

Over time, collections gradually stabilized and significantly increased, reflecting improved compliance, greater formalization of the economy, and a wider tax base. It effectively reduced the cascading effect of taxes and enhanced overall tax buoyancy. States were also provided a compensation mechanism for any revenue shortfalls for a period of five years.

Despite initial hurdles, GST has largely succeeded in streamlining indirect taxation, fostering a common national market, and improving tax administration and compliance across India.