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The IUP Journal of Accounting Research and Audit Practices:
A Study on GST and Its Probable Impact on the Sales Tax Revenue of Kerala
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Goods and Services Tax (GST) is a type of unified value-added tax on goods and services which is levied at country level. The main objective of this new tax regime in India is to avoid multiple taxation on same goods and services. Introduction of this destinationbased consumption tax will stimulate Indian industry and ensure its overall economic development and growth. The present paper mainly focuses on examining the structure, features and expected challenges of proposed GST, and also endeavors to forecast its probable impact on the sales tax revenue of Kerala. Based on the trends from 2004-05 to 2014-15 under VAT regime, the non-VAT and VAT revenue of Kerala is expected to grow at a diminishing rate in the coming years. This shortage of VAT revenue will have an adverse impact on the economy. GST is the only option to increase the tax revenue of Kerala.

 
 
 

Goods and Services Tax (GST) is a type of unified value-added tax on goods and services which is levied at country level. The main objective of this new tax regime is to avoid multiple taxation on same goods and services. Introduction of this destination-based consumption tax will stimulate Indian industry and ensure its overall economic development and growth.

The proposed GST will act as a fulcrum to reduce unemployment in the country. Both central and state governments levying tax on goods and services at different rates have created inefficiency in the tax system. GST is expected to bring back efficiency in the tax system and it will restrict the leakages. Fiscal motives to implement the proposed GST shall be: (i) To expand the fiscal space and improve economic viability of the government by way of increasing public expenditure under the targeted revenue constraints; (ii) To eliminate the definitional separation between goods and services; and (iii) To achieve efficiency in tax system and envisage the powers and responsibilities of taxation authority.

 
 
 

Accounting Research and Audit Practices, Goods and Services Tax (GST), Theoretical Background of GST, Probable Impact, Sales Tax Revenue, International Perspective, History of GST in India, Kerala.