Level
of Awareness and Knowledge about GST (Goods and Services Tax)
in Haldwani
Dr. CS Joshi
Professor and Head
of Commerce Department,
M.B GOVT P.G
College,
Haldwani,
Uttarakhand
Tanuja Chaudhary,
Research Scholar,
Commerce Department,
M.B GOVT P.G
College,
email-tanuja.chaudhary20sep@gmail.com
Abstract
GST is a single and destination based
tax which will be levied at the time of consumption of goods and services. It
will be levied only on the additional value so that credit of inputs taxes
already paid (at the time of purchase of inputs) can be availed. Thus, ultimate
consumer will bear the GST that will be charged by the last dealer in supply
chain, with set off benefits at all the previous stage. It has been three years
since the inception of GST therefore; the study was conducted with an aim of
assessing the level of knowledge about GST among respondents in Haldwani,
Uttarakhand. Primary data for the study was collected with the help of
well-structured questionnaire. Chi-square, mean, and standard deviation were
utilized as tools for analysis. The analysis leads to the findings that 12
respondents have high level of knowledge about GST, 35 respondents have
moderate level of knowledge and 13 respondents have low level of knowledge. Chi-square
analysis leads to the findings that level of knowledge is independent of
gender, age, educational status, and occupational status.
Keywords:
GST,
Indirect Tax, Level of Awareness, and Level of Knowledge.
Introduction:
GST is one of the biggest indirect tax
reforms that aimed to make the entire country as a unified common market a tax
that will subsume different central and state tax. Prior the concept and
implementation of GST (Goods and Services tax), the taxation system of India
can be considered as a farrago of central, state and local area levies. By
bringing together more than a score of tax under GST, a road to harmonized
system of indirect tax has been paved making India an economic union.
GST
is a single and destination based tax which will be levied at the time of
consumption of goods and services. It will be levied only
on the additional value so that credit of inputs taxes already paid (at the
time of purchase of inputs) can be availed. Thus, ultimate consumer will bear
the GST that will be charged by the last dealer in supply chain, with set off
benefits at all the previous stage.
At International level, GST was first
introduced in France and at present it is used by more than 160 countries as
one of the significant tax tool. Depending on the socio economic
infrastructure, most of the countries have introduced Dual GST or National GST.
In India the Act for GST was passed in
the Lok Sabha on 29th March, 2017. It was finally implemented on 1st
July 2017. The concept of GST works on the principle of VAT (Value Added Tax).
It is a comprehensive levy and envisages collection of tax on both goods and
services at single rate. Thus, any supply of goods and services will attract
GST, unless kept out of the purview of the GST.
Literature
Review:
Leemput and Wiencek (2017) in their
research paper “The effect of the GST on
Indian Growth” have tried to analyses the effect of changes in tax system through
the lens of trade model. It was concluded that it is expected that GST will raise the overall Indian welfare
and is projected to be an inclusive policy in that it would be welfare
improving for all Indian States.
Lourdunathan, F. and Xavier, P. (2016)
concluded on their research paper “A
Study on implementation of goods and service tax (GST) in India: Prospects and
challenges” that GST will bring Entire Nation under one tax market and
overall GST will provide benefits and relief to consumers and producers by
subsuming the various taxes and by providing comprehensive coverage of inputs
tax credits set off. The paper revealed that implementation of GST will have
positive impact on the various industries and sector like FMGC (Fast Moving
Consumer Goods), Consumer Durables, Pharma, Automobiles, and warehousing and
logistic industry. But, sectors like banking and financial services, telecom,
air and road transport, construction and development of states will witness
high inflationary impact.
Rani,
S. (2017), in her study concluded that GST be beneficial for
the citizens of the nation. It will save the producers and consumers from the
drawbacks of earlier tax regimes and will provide relief to producers and
consumers by providing wide and comprehensive coverage of tax credit set-off.
It can be further concluded that GST have a positive impact on Indian sectors
and industry.
Statement
of the problem:
Introduction of GST will enable the
nation to have a tax-system that is more comprehensive, transparent, business-friendly,
and efficient. GST was a hot-burning topic in economy before its implementation
and it has continued to remain a buzzword in the economy since it
implementation.
A sudden shift in the paradigm of
taxation has caused confusion and distortion in the economy. Frequent changes
in the model, rate, and conditions of GST have significantly contributed in the
ambiguity of the concept. The new concept and frequent changes in the model has
been troublesome for the business person, retailers, and consumers. In order to
combat the confusion among consumers, small and large enterprises Government
and its agencies are making effort to spread awareness about GST within entire
nation. Sales and purchases are made on daily basis and these transactions
require people to pay GST. Therefore, it is significant to know if people are
aware about the GST and this study makes an effort to analyses the level of
awareness and knowledge of GST and its implementation among customers and
retailers in HALDWANI.
Objectives
of the study:
1. To assess the level of awareness and knowledge
among respondents on issue of GST in Haldwani,
2. To identify the socio-economic
factors that affects the level of knowledge of respondents, and
3. To give suitable suggestions on the basis
of findings of study.
Hypothesis
The following hypothesis is formulated
for the objective and is tested:
H0: There is no
significant association between demographic factors (age, gender, educational
and occupational status) and level of knowledge on GST.
H1: There is significant
association between demographic factors (age, gender, educational and
occupational status) and level of knowledge on GST.
Research
Methodology:
As the study determines
the association of demographic factors with level of knowledge of GST therefore
the research design adopted for this study is diagnostic research design. Haldwani
city of Uttarakhand was selected as a study area. The study is based on the
primary and secondary data.
Primary
data:
To make the study more realistic and
relevant primary data is collected from 60 respondents from different parts of
Haldwani. A well-structured questionnaire was designed to collect the primary
data.
The questionnaire is divided into three
sections A, B and C respectively. Section A, containing 6 questions, reflects
the socio economic profile of the respondents. Section B includes Questions 7
to 12 about the Basic information about GST.Question 13 relates to the second
attribute that is Goods and Services exempted from GST. These include the goods
and service that are completely exempt from the GST and suppliers are not
allowed to claim any input tax credit on the purchase of inputs.
Question 14 relates to the third
attribute that is Goods and Services not covered under the purview of GST. It
includes goods and services which are subject to VAT and service tax.Section C
includes the 8 statements judging the level of knowledge with the help of
Likert Scale.
Secondary
data:The study was made more relevant by considering and
utilizing secondary source like journalism newspaper, relevant website, and
different books.
Tools
used for analysis of data:
The study was conducted in order to know
the level of awareness and knowledge of implementation of GST among customer
and retailer. The data so collected is analyzed with the help of techniques
like Percentage and chi-square test.The level of significance for testing above
hypothesis will be 5%.
Level
of Knowledge among respondents:
Level of awareness and knowledge among
respondents has been determined by given 8 statements. Likert scaling technique
has been adopted to measure the level of awareness and knowledge about GST. The
responses observed for each statement in the schedule has been scored. In order
to measure the total score of respondents 5
points are given to Strongly Agree,
4 points are given to Agree, 3 points are given to Neutral,
2 points are given to Strongly Disagree, and 1 point is given to Disagree.
Table 1: Level of awareness among
respondents through Likert Scale:
|
Statements
|
Strongly
agree |
Agree |
Neutral |
Strongly
disagree |
Disagree |
Total |
|
Understands GST and how it is
implemented. |
23% |
28% |
28% |
18% |
2% |
100% |
|
GST is a kind of indirect tax. |
20% |
23% |
27% |
13% |
3% |
100% |
|
GST will abolish service tax, VAT,
CENVAT, and other indirect tax. |
27% |
27% |
40% |
5% |
2% |
100% |
|
GST will make India’s tax system more
efficient and transparent. |
27% |
40% |
28% |
5% |
0% |
100% |
|
Main objective of introducing GST is
to bring tax uniformity within nation. |
25% |
38% |
33% |
3% |
0% |
100% |
|
GST will increase the price of goods
and services. |
17% |
27% |
37% |
17% |
3% |
100% |
|
GST will increase the revenue of the
nation. |
15% |
38% |
45% |
2% |
0% |
100% |
|
GST will burden customers. |
7% |
18% |
27% |
32% |
17% |
100% |
Source:
Computed data
Also, Level of knowledge among
respondents is measured in three levels high, moderate, and low. For
classifying data into high, moderate and low value of mean and standard
deviation of 60 respondents has been determined. The calculated value of mean
Therefore,
Table
2: Level of knowledge about GST:
|
S.no |
Level of knowledge |
Number of respondents |
|
1. |
High |
12 |
|
2. |
Moderate |
35 |
|
3. |
Low |
13 |
|
|
Total |
60 |
Source: Computed data
From, the above table it can conclude
that 12 respondents have high level of
knowledge about GST, 35 respondents have moderate level of knowledge and 13
respondents have low level of knowledge.
Testing
of hypothesis:
Chi-square test is used for testing the
hypothesis in the respective study. Chi-square is a non-parametric test that is
used as a test of independence. As a
test of independence chi-square enable us to explain if two attributes are associated
or not. The hypotheses were formulated for objectives and are tested at 5%
level of significance.
Table
3: Chi-Square Results
|
Socio-Economic
factors |
Calculated
value of Chi-Square |
Degree
of freedom |
Table
value of Chi-square |
Results |
|
Gender |
0.078542 |
2 |
5.991 |
Insignificant |
|
Age |
0.650711 |
6 |
12.592 |
Insignificant |
|
Educational
status |
0.232718 |
6 |
12.592 |
Insignificant |
|
Occupational
Status |
0.123427 |
6 |
12.592 |
Insignificant |
Source:
Computed data
From the above table it can be observed
that calculated value of chi-square is less than the table value of chi-square
at 5% level of significance, therefore,
all the null hypothesis are accepted which means level of knowledge is independent of
gender, age, educational status, and occupational status.
Findings
and Conclusions:
From the study, it is evidentthat even
though most of the respondents are aware about GST and its implementation but
most of them have limited knowledge about GST. This is because most of the
respondents chose to answer neutral when they were asked about GST.
Other findings of the study are as
follows:
1.
It is evident from the survey that majority
of the respondents (55%) are male.
2.
It is observed that 64% of the
respondents fall within the age-group of 18 to 25 years.
3.
The study revealed that 45% of the
respondents are post graduated.
4.
The study declares that 53% of the
respondents are students.
5.
It
is evident that 88% respondents are aware about the meaning of GST.
6.
It can be concluded that 68.33% of
respondents are aware about adoption of GST in India.
7.
It can be concluded that 42% of
respondents are aware about the country that first adopted GST and remaining
58% are unaware about the same.
8.
The study reflects that respondents are
partially aware about the rate slabs of GST in India.
9.
It is evident from the study that more
that 50% of respondents are aware about application of GST.
10.
The study revealed that level of
awareness about basic information is moderate among respondents.
11.
It is evident from study that
respondents are not completely aware about the goods exempted from GST.
12.
It can be observed that respondents do
not understand the difference between goods and services exempted from GST and
goods and services not covered under purview of GST. It is evident from above
that respondents are not aware about goods not covered under the purview of
GST.
13.
From the study, it is evident that even
though most of the respondents are aware about GST and its implementation but
most of them have limited knowledge about GST. This is because most of the
respondents chose to answer neutral when they were asked about GST.
14.
From, the above study it can conclude
that 12 respondents have high level of knowledge about GST, 35 respondents have
moderate level of knowledge and 13 respondents have low level of knowledge.
15.
It is evident from study that level of
knowledge is independent of gender, age, educational status, and occupational
status.
Suggestions
and conclusion:
GST is one of the buzzword within the nation
since the proclamation of its implementation was made on July 2017. GST was
adopted by Indian Government with an aim to make a unified tax system. GST has
been considered as one of the main instrument to raise the revenue of the
nation. The more revenues gained by the government, more benefits will be
gained by the nation. Thus, doing so requires the cooperation and commitment
from academicians, parties, professionals, students, and customers. The clear
understanding of the concept will enable the adequate and efficient
implementation of GST.
In order to bring the clear
understanding of GST government among academicians, parties, professionals,
students, customers, and others following suggestions can be considered:
1. Adequate and relevant fundamental
information should be provided to increase and improve the understanding of the
general principle of GST by organizing seminar, talk, training, course and
forum.
2. GST should be included as the part of
the curriculums in the colleges and universities.
3. Forums should be made at each level
so that doubts of retailers and consumers can be eliminated.
4. Government should emphasis the public
particularly the students to understand the innovations happening in the tax
system. Therefore, some aspects need to be observed for example, definition of
the termsused the scope of the GST’s implementation, a specific list of goods
and services that subject to tax and most important, they comply and adhere to
the rule and regulation fairly and in transparent manner so that the end users
are not burdened with the reforms made.
5. The government can appoint agent in
each area of the nation who can help new and small business to get them
registered under GST.
References:
1. Leemput, E.V. and Wiencek, E.A.
(2017), The effect of the GST on Indian
Growth”IFDP Notes Washington: Board of
Governors of the Federal Reserve System, March 24, 2017,
https://doi.org/10.17016/2573-2129.29.
2. Rani, S. (2017). A research paper on goods and service tax (GST) and its impact on Indian economy International Journal of Advanced Research and Development Volume 2; Issue 5; Page No. 209-212
4. A quick guide to India GST rates in
Articles from The Economic Times, 2017
5. Model GST Law, Empowered Committee of
State Finance Ministers June, 2016. Available at: http://www.finmin.nic.in/reports/ModelGSTLaw_dra
ft.pdf
6. Directorate General
of Commercial Intelligence and Statistics, Ministry of Commerce and Industry
(2012a): "Foreign Trade Statistics of India,"
