Volume : 11, Issue : 10, OCT 2025

NEW GST FRAMEWORK AND ITS ECONOMIC IMPLICATION FOR INDIA: PROSPECTS AND CHALLENGES

CHANDRA PRAKASH MEGHWAL, DR. NAMRATA GOLYAN

Abstract

The indirect tax system in the Indian economy has existed in complex and varied forms over a long period of time. The Goods and Services Tax (GST) was introduced in 2017 with the aim of removing this complexity and implementing a uniform tax structure across the country. Recently, the government has pto reform the existing structure and simplify the tax rates and merge them into two major slabs – 5% and 18%. This step is considered to be important towards simplifying tax administration, reducing compliance burden and encouraging consumption and investment. This paper presents an analysis of the potential opportunities and challenges arising out of the new GST framework. In terms of opportunities, simpler tax rates will be beneficial to businesses, especially small and medium enterprises (SMEs), thereby reducing compliance costs and increasing their participation in the formal economy. Clarity in the tax structure for consumers will simplify purchasing decisions and increase the possibility of price stability. At the same time, benefits such as transparency in revenue collection, encouraging foreign investment and widening of tax base will help make the Indian economy competitive in the long run. On the other hand, the challenges include potential pressure on state revenues, complexities associated with adjustments in tax administration, temporary increase in prices in some areas, and the difficulties of the business community in the transition period. In particular, revenue division among states and maintaining fiscal balance will be challenging for policymakers. In conclusion, the new GST framework is a positive step towards making the Indian economy simple, transparent, and investment-friendly. But for its successful implementation, coordination between the central and state governments, administrative reforms and policy clarity are necessary.

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IESRJ

International Educational Scientific Research Journal

E-ISSN: 2455-295X

International Indexed Journal | Multi-Disciplinary Refereed Research Journal

ISSN: 2455-295X

Peer-Reviewed Journal - Equivalent to UGC Approved Journal

Peer-Reviewed Journal

Article No : 9

Number of Downloads : 11

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