A STUDY OF IMPACT OF GST ON UNORGANIZED SECTOR

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI

FOR PARTIAL COMPLETION OF THE DEGREE OF

MASTER IN COMMERCE

(ADVANCED ACCOUNTANCY)

UNDER THE FACULTY OF COMMERCE

BY

MS. SANIKA VISHWANATH MHATRE

UNDER THE GUIDANCE OF

PROF. KUNAL CHANDIKA

KERALEEYA SAMAJAM (REGD.) DOMBIVLI’S

MODEL COLLEGE (AUTONOMOUS)

DOMBIVLI EAST

(2022-23)
A STUDY OF IMPACT OF GST ON UNORGANIZED SECTOR

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI

FOR PARTIAL COMPLETION OF THE DEGREE OF

MASTER IN COMMERCE

(ADVANCED ACCOUNTANCY)

UNDER THE FACULTY OF COMMERCE

BY

MS. SANIKA VISHWANATH MHATRE

UNDER THE GUIDANCE OF

PROF. KUNAL CHANDIKA

KERALEEYA SAMAJAM (REGD.) DOMBIVLI’S

MODEL COLLEGE (AUTONOMOUS)

DOMBIVLI EAST

(2022-23)
 KERALEEYA SAMAJAM (REGD.) DOMBIVLI’S

MODEL COLLEGE (AUTONOMOUS)

DOMBIVLI EAST

CERTIFICATE

This is to certify that MS. SANIKA VISHWANATH MHATRE has worked and duly completed her Project
Work for the degree of MASTER IN COMMERCE under the Faculty of Commerce in the subject of
ADVANCED ACCOUNTANCY and her project is entitled, ‘‘A STUDY OF IMPACT OF GST ON
UNORGANIZED SECTOR” under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of it has
been submitted previously for any Degree or Diploma of any University.

It is her own work and facts reported by her personal findings and investigations.

Name and Signature of Guiding Teacher

Prof. Kunal Chandika

Date of submission:
 DECLARATION

I the undersigned MISS. SANIKA VISHWANATH MHATRE here by, declare that the work embodied in
this project work titled ‘‘A STUDY OF IMPACT OF GST ON UNORGANIZED SECTOR’’ forms my
own contribution to the research work carried out under the guidance of PROF. KUNAL CHANDIKA is a
result of my own research work and has not been previously submitted to any other University for any other
Degree/ Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in accordance
with academic rules and ethical conduct.

Name and Signature of the Learner

(Sanika Vishwanath Mhatre)

Certified by

Name and signature of the Guiding Teacher

(Prof. Kunal Chandika)

 ACKNOWLEDGMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this project.

I would like to thank my Principal, Dr. CA R. P. BAMBARDEKAR for providing the necessary
facilities required for completion of this project.

I take this opportunity to thank our Co-ordinator Prof. NIKHIL R. NAIR for her moral support
and guidance.

I would also like to express my sincere gratitude towards my Project Guide Prof. KUNAL
CHANDIKA whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and
magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the
completion of the project especially My Parents and Peers who supported me throughout my
project.
 INDEX

Sr. No. No. Of Chapter Title of the project Page no.

1 Chapter 1 Introduction 1-31

2 Chapter 2 Research 32-36

Methodology

3 Chapter 3 Literature Review 37-38

4 Chapter 4 Data Analysis and 39-60

Interpretation

5 Chapter 5 Findings, 61-63

Suggestions,
conclusion

6 Bibliography and 64
Webliography

7 Appendix 65-68
Abbreviations used:

GST: Goods and Services Tax

CGST: Central Goods and Services Tax
SGST: State Goods and Services Tax
IGST: Integrated Goods and Services Tax
ITC: Input Tax Credit
MRP: Maximum Retail Price
FMCG: Fast-Moving Consumer Goods
 CHAPTER NO. 1 INTRODUCTION

Sr. no Content
1.1 GST: An Overview
1.2 Introduction Of GST
1.3 Definition Of Goods And Services Tax
1.4 Features of GST
1.5 Benefits of GST
1.6 Indirect Taxes in India Before GST
1.7 Taxes Subsumed in GST
1.8 Issues in Implementing GST
1.9 GST Impact on MRP of Goods and Services
1.10 Unorganized Sector
1.11 Definition of Unorganized Sector
1.12 Categories of Unorganized Labour Force
1.13 Difference Between Organized and Unorganized Sector
1.14 Unorganized Sector in India
1.15 Disadvantages of Unorganized Sector
1.16 Effect of Globalization on the Unorganized Sector
1.17 Impact of GST
1.18 e-Shram Portal for Unorganized Sector

1
GST : AN OVERVIEW
Goods and Services (GST) was launched on 1st of July 2017 in India. It is an indirect tax applicable
throughout India. Now single tax would be levied on all goods and services. Around 160 countries have
implemented GST before India. GST will ensure a comprehensive tax base with minimum exemptions,
which will help the industry.

GST will help the economy to grow in more efficient manner by ameliorating the tax accumulation as it will
disrupt all the tax barriers between states and integrate country via single tax rate. It will benefit the Indian
Economy in many ways – help in reducing the price for consumers, rate of tax will be uniform, reduce
multiple taxes. GST will affect many sectors in positive or negative manner. GST, as per government
estimates, will help to boost India’s GDP.

Under GST, goods and services are taxed at the following rates, 0%, 5%, 12%, 18%. After GST
implementation certain products prices will reduce like branded goods, hotels, etc. Few products price will
increase like mobile bills, aerated drinks, internet, air tickets.

Goods and Services Taxes would be collected in three ways: CGST: where the revenue will be collected by
the central government for intra-state sales, SGST: where the revenue will be collected by the state
government for intra-state sales, IGST: where the revenue will be collected by the central government for
inter-state sales

2
INTRODUCTION OF GST

What is GST?

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service Tax Act
was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July 2017; Goods &
Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every
value addition.

In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods and services.
This law has replaced many indirect tax laws that previously existed in India. GST is one indirect tax for the
entire country. Before the introduction of GST, companies were forced to pay tax at every point of the
supply chain. The product’s price rises as a result of the cascading effect. However, under GST, a taxpayer
can claim an Input Tax Credit (ITC) for the purchase of raw materials. This decreases the cascading effect
on the product’s ultimate price/ MRP.

So, before Goods and Service Tax, the pattern of tax levy was as follows: Under the GST regime, the tax is
levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. Inter-
state sales are chargeable to Integrated GST.

3
DEFINITION OF GOODS AND SERVICES TAX

Definition of Goods and Service Tax – “GST is a comprehensive, multi-stage, destination-based tax that is
levied on every value addition.” Multi-stage There are multiple change-of-hands an item goes through along
its supply chain: from manufacture to final sale to the consumer. Let us consider the following case: i.
Purchase of raw materials ii. Production or manufacture iii. Warehousing of finished goods iv. Sale to
wholesaler v. Sale of the product to the retailer vi. Sale to the end consumer Goods and Services Tax is
levied on each of these stages which makes it a multi-stage tax.

4
FEATURES OF GST

Following are the features of GST:

• Single Indirect Tax

GST is a single, unified tax, meaning you don’t have to pay a myriad of other taxes anymore, such as value-
added tax, excise duty, service tax, and others. This unification has made tax compliance easier for
businesses as well as reduced the cost of several goods and services.

The GST system applies a single tax rate to goods and services based on their classification under the
Harmonized System of Nomenclature (HSN). The GST rates vary depending on the nature of the goods or
services and can range from 0% to 28%.

• Registration exemptions for small businesses

Every business with a total turnover exceeding Rs.40 lakhs in a financial year is mandated to register under
GST. For special category states and the state of Telangana, the limit is Rs 20 lakhs. For service providers
under GST, the threshold limits are Rs.20 lakh and Rs.10 lakh for normal category and special category
states, respectively. Small businesses that do not exceed the threshold limits do not need to register under
GST and collect and pay taxes.

You can refer to this article to understand the individual GST registration threshold limits for every state and
Union Territory.

• Four-Tier Tax Structure

The tax structure under GST is divided into four rates:

• 5% - Essential goods, such as food items and life-saving drugs

• 12% - Goods such as certain apparel items, packaged food, nuts, medicines, etc.

• 18% - Goods such as electronic items, consumer durables, and most services

• 28% - Luxury and sin goods such as cars, tobacco, and aerated drinks

In addition to these four tax rates, there is also a Nil rate imposed on several essential goods, such as food
grains, as well as special tax rates of 0.25% and 3% imposed on certain luxury goods like precious stones
and jewellery. There are also special rates for taxpayers under the composition scheme.

The four-tier rate structure intends to bring uniformity in taxation across the country while reducing the
cascading effect of taxes and promoting the ease of doing business. However, some experts believe the
multiple tax rates complicate compliance and add to business costs.

5
 • GST Composition Scheme

The GST composition scheme allows eligible businesses to pay GST at a lower rate on their taxable
turnover. It also reduces the number of compliances a business needs to adhere to.

Manufacturers that have a turnover of up to Rs 1.5 crore are allowed to opt into the composition scheme. In
North-Eastern states and Himachal Pradesh, this limit is Rs.75 lakhs. There is also a special composition
scheme for service providers with a turnover of up to Rs.50 lakh. However, a business paying tax under the
composition scheme cannot claim the input tax credit, as explained in the next pointer.

• Input Tax Credit System

Input Tax Credit (ITC) is the credit a registered GST taxpayer can claim for the GST paid on inputs (i.e., raw
materials, capital goods, and services) that are used in producing or supplying goods and services.

Under the GST system, the tax is levied at each stage of the supply chain, from the manufacturer to the
retailer, and is ultimately borne by the final consumer. The tax paid at each stage can be claimed as an input
tax credit (ITC) in the subsequent stage, except for businesses that opt for the composition scheme.

For example, a manufacturer, Mr. X, pays Rs.5,000 as GST on procuring parts to manufacture a car, say, on
tyres. He can claim this Rs.5,000 as input tax credit at the time of paying GST on the sale of the final
product, which is the car. Assume his GST liability on the sale of the car is Rs.36,000. By setting off input
tax credit of Rs.5,000, he will need to pay only Rs.31,000 to the government. Hence, the claiming of input
tax credit prevents the cascading effect of taxes that was faced under the erstwhile tax regimes.

• Invoice Matching

The GST system checks whether the details of the invoices filed by the supplier match those of the invoices
filed by the recipient. For example, the supplier files their GSTR-1 return, which is the return of outward
supplies. These details appear in the recipient’s GSTR-2B statement, which contains details of their
purchases made and input tax credit available, and is used as reference when filing the GSTR-3B.

Hence, when the recipient files their summary return and pays their taxes in Form GSTR-3B, the ITC details
submitted by the recipient are system-checked with the details submitted by the supplier. If the details
match, it is assumed the data has been correctly reported by both the supplier and the recipient.

However, if there are any discrepancies or differences in the details, the system flags them, and the GST
portal sends out automated reminders to the concerned taxpayer. The mismatches are then rectified by the
parties involved in the transaction, failing which the ITC may be disallowed.

6
 • Consumption-Based Tax

GST is a destination-based consumption tax. The GST collected on goods and services is not received by
the manufacturer’s state but by the state where the supplies are consumed. And although GST is charged at
every stage, whenever value is added to the goods or services, the supplier of the goods or services offsets
this GST by claiming input tax credit of the GST paid on previous stages. Ultimately, the final dealer passes
on the GST to the final consumer of the goods or services.

It helps to reduce the burden of tax evasion since the tax is collected at each stage of the supply chain and
reconciled through the GST return filing process.

• Anti-Profiteering Measures

Under the GST system, businesses must pass on the benefit of lower tax rates or ITC to consumers by
reducing the prices of their goods or services. The GST law comprises anti-profiteering measures that
include a framework to identify whether the benefits have been passed on to consumers.

• Competitive Advantage

The removal of the cascading effect and the introduction of ITC has helped Indian businesses reduce their
cost of compliance and the cost of production. This has given Indian businesses a competitive advantage in
the international market, making them more attractive to foreign buyers and investors.

• Digital compliance and payments

GST compliance is almost completely digital. From registration to return filings to payments, taxpayers can
undertake them online on the common GST portal. Taxpayers can pay GST online via internet banking,
National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), and debit or credit cards.
Even applications for refunds can be made online. In cases where discrepancies are detected, there are
automated notices sent to taxpayers with a provision to respond and rectify the same.

• Transparent System:

The GST system has simplified the tax structure in the country. It has made the tax system more transparent
and accountable by digitising the process and ensuring that businesses are compliant with the tax laws.

7
BENEFITS OF GST

GST is beneficial not only for the business and industry but also for the government and consumers. Here,
we bring the ten benefits of Goods and Service Tax (GST).

1. Easy compliance:

A robust and comprehensive IT system would be the foundation of the GST regime in India. Therefore, all
taxpayer services such as registrations, returns, payments, etc. would be available to the taxpayers online,
which would make compliance easy and transparent.

2. Uniformity of tax rates and structures:

GST will ensure that indirect tax rates and structures are common across the country, thereby increasing
certainty and ease of doing business. In other words, GST would make doing business in the country tax
neutral, irrespective of the choice of place of doing business.

3. Removal of cascading:

A system of seamless tax credits throughout the value-chain, and across boundaries of States, would ensure
that there is minimal cascading of taxes. This would reduce the hidden costs of doing business.

4. Improved competitiveness:

Reduction in transaction costs of doing business would eventually lead to improved competitiveness for the
trade and industry. World Bank believes that the implementation of the Goods and Service Tax (GST),
combined with the dismantling of inter-state check-posts, is the most crucial reform that could improve the
competitiveness of India’s manufacturing sector.

5. Gain to manufacturers and exporters:

The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods
and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured
goods and services. This will increase the competitiveness of Indian goods and services in the international
market and give a boost to Indian exports. The uniformity in tax rates and procedures across the country will
also go a long way in reducing compliance costs.

6. Simple and easy to administer:

Multiple indirect taxes at the Central and State levels are being replaced by GST. Backed with a robust end-
to-end IT system, GST would be simpler and easier to administer than all other indirect taxes of the Centre
and State levied so far.

8
7. Better controls on leakage:

GST will result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of
input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the
design of GST that would incentivize tax compliance by traders.

8. Higher revenue efficiency:

GST is expected to decrease the cost of collection of tax revenues of the Government, and will, therefore,
lead to higher revenue efficiency.

9. Single and transparent tax proportionate to the value of goods and services:

Due to multiple indirect taxes being levied by the Centre and State, with incomplete or no input tax credits
available at progressive stages of value addition, the cost of most goods and services in the country today is
laden with many hidden taxes. Under GST, there would be only one tax from the manufacturer to the
consumer, leading to transparency of taxes paid to the final consumer.

10. Relief in the overall tax burden:

Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which
makes GST essentially a tax only on value addition at each stage. Because of efficiency gains and the
prevention of leakages, the overall tax burden on most commodities will come down, which will benefit
consumers. The final consumer will thus bear only the GST charged by the last dealer in the supply chain,
with set-off benefits at all the previous stages.

9
INDIRECT TAXES IN INDIA BEFORE GST

The previous indirect tax norms in India led to multiple points of levies. VAT or CST, CED, ST were levied
depending on the occurrence of an activity. They were levied in instances like CED on the manufacture of
goods, VAT or CST on the sale of goods and ST on the provision of the taxable service. However, the
introduction of the GST subsumed the majority of the indirect taxes like ST, entry tax, luxury tax, octroi, etc.

Taxes from the earlier regime such as VAT or CST and CED continue to be levied on petroleum crude,
high-speed diesel, motor spirit, natural gas and aviation turbine fuel. The government intends to bring
petroleum products under the ambit of GST soon.

The higher taxation on non-essential products like alcohol or cigarettes results in higher cost of such
products discouraging their purchase. Similarly, the government intends to tax the essential products at a
lower rate for reducing the tax burden on the end-consumer. On the other hand, the government also
provides exemption on highly essential goods or services which it intends to boost.

There are different types of indirect tax in India. However, after the implementation of GST, all these
indirect taxes were bundled into one singular tax for the citizens of India. We will have a look at the
different types of indirect tax in India:

1. Service tax: This tax is levied by an entity in return for the service provided by them. The service tax
is collected by the Government of India and deposited with them.
2. Excise duty: When any product or good is manufactured by a company in India, then the tax levied
on those goods is called the Excise Duty. The manufacturing company pays the tax on the goods and
in turn recover the amount from their customers.
3. Value Added Tax: Also known as VAT, this type of tax is levied on any product sold directly to
customer and are movable. VAT consists of Central Sales Tax which is paid to the Government of
India State Central Sales Tax which is paid to the respective State Government.
4. Custom Duty: This a tax levied on the goods imported to India. Sometimes, Custom Duty is also
levied on products which are exported out of India.
5. Stamp Duty: This is a tax levied on the transfer of any immovable property in a state of India. The
state government in whose state the property is located charges this type of tax. Stamp tax is also
applicable on all legal documents too.
6. Entertainment Tax: This tax is charged by the state government and is applicable on any products
or transactions related to entertainment. Purchasing of any video games, movie shows, sports
activities, arcades, amusement parks, etc. are some of the products on which Entertainment Tax is
charged.
7. Securities Transaction Tax: This tax is levied during the trading of securities through Indian Stock
Exchange.
10
TAXES SUBSUMED IN GST
The taxes subsumed in GST are:

1. Central Excise Duty

2. Additional Excise Duty

3. Service Tax

4. Additional Custom Duty (Countervailing Duty)

5. Special Additional Duty of Customs (SAD)

6. Value Added Tax (VAT)

7. Central Sales Tax (CST)

8. Entry Tax

9. Luxury Tax

10. Entertainment Tax

11. Taxes on Lottery, Betting and Gambling

12. Octroi and Purchase Tax

GST has revolutionised the Indian tax system by subsuming multiple indirect taxes, making it more
straightforward and transparent. Understanding the taxes subsumed in GST is essential for taxpayers to
comply with the law and avoid penalties. The taxes subsumed in GST include Central Excise Duty, Service
Tax, VAT, and several other taxes. However, direct taxes such as income tax, customs duty on imports and
taxes on petroleum products are not subsumed in GST.

11
ISSUES IN IMPLEMENTING GST
The main problems of Implementation of GST that could impede the GST centres on the documentation
requirements for the Input Tax Credits and the stage at which the said credit accumulates. The main
objective of any value added tax system (like the GST) is the prevention of double taxation. This is done by
providing credits at every step of the production chain, efficiently taxing only the extent of the value that has
been added.

Discover the GST rates in India, HSN code, or SAC code for all goods and services by using our GST rate
finder service. This finder service is also known as the HSN code finder. For products and services, GST is
calculated on the basis of an item’s HSN or SAC code.

The issue that rises under the Indian GST, however, is the arduous documentation requirement which may
have a number of inadvertent consequences. Under the Section 16 (11) of the Model GST Law, an input tax
credit can only be received when:

• The buyer received a tax invoice from the supplier

• The buyer has received goods/services
• The taxes charged on purchase have been deposited/paid by the supplier
• The supplier has filed GST Returns
• Cash flow issues

The issue that arises with Section 16 (11) is that it puts the administrative load linked with the tax on the
buyer instead of the supplier, this can be challenging for businesses. One possible issue that could come up
as a result of this administrative shift is the non-payment of taxes by the supplier. In such a scenario, the
buyer will end up having to pay for not only his share of the tax, but also for the supplier’s share as well.
Moreover, problems could come up, if for some reason there are discrepancies found in the supplier’s
documentation at a later stage. In that case, the buyer will be required to pay back the tax reimbursement to
the government that too with an interest. This problem is usually fixed by the market forces, nevertheless, as
non-compliant suppliers will soon find themselves losing customers because of their negligence. A
mechanism has been put in place by the government to help with this issue, by providing a publicly
accessible compliance rating system which will allow the consumers to pinpoint defaulters as the system
starts to take effect.

More challenging, perhaps, will be the short-term cash flow issues caused by Section 16 (11). Most
businesses attempt to have an efficient working capital (i.e., the amount of cash kept in hand to bridge the
gap between receiving cash from their customers and paying cash to their suppliers). If an entity can keep

12
less cash in hand for the day to day activities, it can invest more in other undertakings, such as business
expansion or an interest bearing savings account.

As the input tax credit can only be released once the supplier has submitted suitable documentation,
businesses will have to account for possible delays and keep that much extra cash on hand, thus reducing the
money available for potential growth and investment activities.

Furthermore, any relocation of the inventory from one state to another is considered a taxable event under
the GST. Effectively, the tax will be charged on the goods or the services at the time of transfer and the
compensating input tax credit will be only available for collection at the point of sale, this will put a further
strain on the cash requirements for businesses. There is a possibility that due to the cash flow strains certain
small businesses might have to even borrow money to fund their day-to-day activities, or much worse, close
their operations.

13
GST IMPACT ON MRP OF GOODS AND SERVICES

Every product has a maximum retail price labelled on it. It is the highest price set by producers for a certain
product before its sale in India. Retailers are not permitted to charge customers more than the MRP. The
maximum retail price indicated on a product includes all applicable taxes.

Since the implementation of GST in July 2017, there have been several modifications to the tax rates on
various items. As a result, the maximum retail price may rise or fall. However, under GST, a taxpayer may
be unable to receive ITC in certain circumstances. Prices do not fall in such instances. Because of the
adoption of GST and the ongoing revision of GST rates, it is necessary to adjust the maximum retail price.

For example, with the implementation of GST, the prices of FMCG items are decreased to pass on the
benefits of the lower GST rate and the ITC advantage.

The government has said unequivocally that the MRP is the maximum price of a product that can be offered
at retail. GST is included in the MRP, and you are not required to pay even a single penny more than the
MRP. There are several laws, including the Monopolies and Restrictive Trade Practices (MRTP) Act,
Essential Commodities Acts, and the Consumer Protection Act, that make selling a product above MRP a
punishable offense for unfair trade practice, and even under the new tax regime, selling a product above
MRP is a violation of the GST Act’s anti-profiteering clauses. This might result in the cancelation of GST
registration. On the other hand, a retailer can sell at a lower price than the MRP.

The Central Government of India has established the National Anti-profiteering Authority to investigate
whether ITC obtained by a registered person or a decrease in tax rates has resulted in a drop in prices and if
this has been passed on to consumers. This guarantees that prices stay stable and that businesses do not profit
excessively.

A manufacturer must meet the standards outlined below to revise the maximum retail price.

1. The goods should disclose both the original and amended maximum retail price. The corrected
version should not be overwritten with the original.

2. The rise in maximum retail price cannot be more than the product’s net price increase due to tax.

14
UNORGANIZED SECTOR

The term unorganised sector when used in the Indian contexts defined by the National Commission for
Enterprises in the Unorganised Sector, in their Report on Conditions of Work and Promotion of Livelihoods
in the Unorganised Sector as "... consisting of all unincorporated private enterprises owned by individuals or
households engaged in the sale or production of goods and services operated on a proprietary or
partnership basis and with less than ten total workers."

Amongst the characteristic features of this sector are ease of entry, smaller scale of operation, local
ownership, uncertain legal status, labour-intensive and operating using lower technology based methods,
flexible pricing, less sophisticated packing, absence of a brand name, unavailability of good storage facilities
and an effective distribution network, inadequate access to government schemes, finance and government
aid, lower entry barriers for employees, a higher proportion of migrants with a lower rate of
compensation. Employees of enterprises belonging to the unorganised sector have lower job security and
poorer chances of growth, and no leave or paid holidays, they have lower protection against employers
indulging in unfair or illegal practices.

15
DEFINITION OF UNORGANIZED SECTOR

An unorganised sector is defined as a sector that is not established with the government and does not have
definite and consistent employment conditions. There are no government laws and regulations enforced in
this industry. It is simple to enter such a sector because no affiliation or certification is required.

16
CATEGORIES OF UNORGANISED LABOUR FORCE

The Ministry of Labour, Government of India, has categorised the unorganised labour force under four
groups depending on occupation, nature of employment, specially distressed categories and service
categories.

1. Under Terms of Occupation:

Small and marginal farmers, landless agricultural labourers, share croppers, fishermen, those engaged
in animal husbandry, beedi rolling, labelling and packing, building and construction workers, leather
workers, weavers, artisans, salt workers, workers in brick kilns and stone quarries, workers in saw
mills, oil mills, etc. come under this category.

2. Under Terms of Nature of Employment:

Attached agricultural labourers, bonded labourers, migrant workers, contract and casual labourers
come under this category.

3. Under Terms of Specially Distressed Category:

Toddy tappers, scavengers, carriers of head loads, drivers of animal driven vehicles, loaders and
unloaders come under this category.

4. Under Terms of Service Category:

Midwives, domestic workers, fishermen and women, barbers, vegetable and fruit vendors, newspaper
vendors, etc., belong to this category.

17
DIFFERENCE BETWEEN ORGANIZED AND UNORGANIZED SECTOR
There are several key differences between the organised and unorganised sectors. The first difference is that
the organised sector is made up of businesses that are registered with the government and follow its
guidelines and regulations.

Meaning

The organised sector is more likely to be efficient and productive as they have access to a larger market.
They are also typically better funded, with more resources at their disposal.

In contrast, the unorganised sector is made up of businesses that are not registered with the government and
do not follow its guidelines and regulations. This means they are less efficient and productive, as they have a
smaller market. They also typically have fewer resources available to them.

Governed by

The organised sector is governed by the government, while the unorganised sector is not. This means that
businesses in the organised sector have to follow certain guidelines and regulations.

Businesses in the unorganised sector do not have to follow these guidelines and regulations.

Remuneration

The organised sector tends to have better remuneration, meaning employees are typically paid more. This is
because businesses in the organised sector can sell their products and services for a higher price.

Businesses in the unorganised sector typically have lower remuneration, meaning employees are paid less.

Working Hours

The working hours in the organised sector are typically regular, meaning employees work set hours each
week.

The working hours in the unorganised sector are often irregular, meaning employees do not work set hours
each week.

Job Security

The organised sector typically has better job security, as businesses in this sector are more stable. This is
because businesses in the organised sector have access to a larger market and can sell their products and
services for a higher price.

Businesses in the unorganised sector often have less job security, as they are less stable.
18
Overtime

Employees in the organised sector are more likely to receive overtime pay, as businesses in this sector
typically have regular working hours.

Employees in the unorganised sector are less likely to receive overtime pay, as businesses in this sector
typically have irregular working hours.

Benefits and Perquisites

Employees in the organised sector are more likely to receive benefits and perquisites, such as health
insurance and paid vacation days. This is because businesses in the organised sector are typically larger and
can afford to provide these benefits.

Employees in the unorganised sector are less likely to receive benefits and perquisites, as businesses in this
sector are typically smaller and cannot afford to provide these benefits.

19
UNORGANISED SECTOR IN INDIA

Today’s Indian economy is hugely based on the existence of the informal or unorganized sector. The
Commission demonstrated a specific block of categories of unorganized labour consisting of the
construction workers, a labourer of small-scale industry, casual employment, the power loom workers,
employees in shops and commercial establishments, sweepers and scavengers, workers in tanneries, the
tribal labourer and the other unprotected labour. Also, their reports profoundly stated that this sector is full of
causal labour, mostly consisting of small jobs at meagre wages. There is no job security and social benefit.

The National Sample Survey Organization (NSSO) conducts thorough surveys of these unorganized sections
at a regular interval and has observed that the manufacturing industries which do not come under the Annual
Survey of Industries (ASI) are counted in the unorganized sector.

Also, for the service-providing sectors, (except the one who are run by the government) are categorized
under the unorganized sector.

The unorganized sector is not independent or exclusive. It is dependent on the organized industry and the
economy as a whole. Many factors work as a bridge for these two like capital investment and output
requirements, rate of employment, marketing etc.

The unorganized labour is almost disturbing in both stances as of employment rates and wages. The seasonal
deficiency of job availability makes it even worse for those people. Many do not yet have stable and secured
means of income and thus no plan for an annual fund.

Most of the times, the work areas are not well maintained. Also, migration is a dominating trait of the
unorganized sector. The migrant labours face genuine hardships and often shuffle through various
geographical locations in search of a job. None of the informal sector businesses has pen and paper
contracts. There aren’t any formal employer-employee contracts in the unorganized sector. Thus, they often
get violated.

The social issues also add to the crisis. The religious and communal issues lead to partiality in fields of job
availability and facilities. They often also struggle against debt, which happens to be a prevalent issue on
their end.

Sometimes, they are subjected to severe exploitation by the employees. The companies tend to drain the
most out of them without thinking about their minimum necessities. History of this unorganized sector
proves the seriousness of the situation.

There have been several suicides due to debt, and illiteracy has always been a naturally induced condition to
them. Poverty, lack of hygiene and worse health condition summarize the present status of the informal

20
sector employees. The unorganized workers also never received the proper attention from the trade unions.
Thus, left stranded and unrepresented, they still reside in the dark.

Who finances the Unorganized sector of India?

The unorganized manufacturing sector of industries is currently void of capital. As they have failed to get
access to the organized fundings of finance, they instead borrowed off from the unorganized credit market at
high-interest rates. This comparatively big raise in the capital has caused the government to intervene.

Both public and private commercial banks and as well as central and state-level have started offering loans
to the unorganized sectors like self-help communities and cooperation groups at really low-interest rates.
However, the share of these resources in the total amount of investments for the unorganized manufacturing
sector has increased steeply.

The informal financial sources generally include funds available from the family or moneylenders who
operate outside the legal and policy framework of banks.

Apart from this, the chit fund is another form of credit source operated by groups of people for mutual
benefit; but this approach has its limitations. Credit in the informal system is usually available on tap.

The loans are granted mostly without collateral, and lengthy documentation formalities as the lender depend
mainly on the personal knowledge of and contact with, the borrower.

However, over the years, a few NGOs have engaged themselves in activities related to community
mobilization for savings and credit-related operations targeted at some groups in the rural sector.

21
DISADVANTAGES OF THE UNORGANIZED SECTOR
• As we know, the Unorganized sector has almost no support from the government, and that makes it
all the more difficult for the entire industry.
• Less wage is a huge problem.
• Employment is often subjected to insecurity, and the employees can be sacked anytime without any
proper reason.
• There is no availability of necessary facilities like overtime payment, paid leave, sick leave etc.
• There is not much adequate job security either, and the working hours are often too long.
• All these impose a severe threat to the physical condition of the labourers.

22
EFFECT OF GLOBALIZATION ON THE UNORGANIZED SECTOR

Globalization policies in recent years have been adopted in India as an attempt to increase the informal
sector. The launch of globalization saw a subtle growth in the employment rates of the unorganized sector.

However, void of the idea of permanent workers, these industries target employees with low wages and long
working hours. Some non-government organizations and social movements also invested in such activities
for the welfare of the unorganized sector workers. So even though the numbers changed positively, the wage
and the work duration affected the informal sector negatively.

The national statistics mostly states that approximately 93% of the working population are from the
unorganized or informal sector; among which 60% is from agriculture industry alone. This points out how
much important it is to develop this sector immediately as we cannot afford to lose our most important
industry to the threat it poses. Even worse, the rates are increasing every year.

The discriminated and low waged market has to be uprooted entirely. And even though they are the ones
making the most contribution to the GDP, they are the ones getting the most trodden on at the end of the
chain.

Even though the government is continually making new efforts to introduce new beneficiary policies for
these marginalized people, it’s still hard to make a visibly positive impact any time soon.

More job vacancies are needed, and the literacy rate of these informal sector employees need to increase as
well. Literacy is the best way out of poverty, and the unorganized sector needs more of that.

23
IMPACT OF GST

1. Impact of GST on Retailers, Distributor, and Manufacturing Sector:

Goods & Services Tax has boosted performance and competitiveness in India's retailers, distributors and
manufacturing sectors. Declining exports and high expenses are only a portion of the worries of this sector.
Various Indirect Taxes in place earlier increased expenses for distributors and manufacturers. With Goods &
Services Tax system set up, the troubles of the older indirect tax system has vanished and this sector will
develop much better.

2. Impact of GST on Agricultural Sector:

The impact of GST on the agricultural sector or the effect of GST on agriculture is positive. The agricultural
sector is a significant sector to the overall Indian Gross Domestic Product. It covers around 16% of the
Indian Gross Domestic Product.

The introduction of the Goods & Services Tax has affected different sectors of society. One of the
significant issues looked at by the agricultural sector is the transportation of agricultural items across states
all over India.

Transportation may be the most likely issue for the agricultural sector with regard to Goods & Services Tax.
Goods & Services Tax may help India in forming its first National Market for agricultural items.

3. Impact of GST on Textile Sector:

GST has shown a positive effect upon readymade and textile pieces of garments, as one of the GST benefit
sectors. This new system is beneficial to them. Some of the advantages which GST gave to the textile sector
are:

1. The Input Tax Credit or ITC framework or chain.

2. Input Tax Credit or ITC is currently available on the capital goods.

3. The cost for the transporting is currently lower in contrast with the past tax system.

4. Impact of GST on the IT Sector:

Although the Goods & Services Tax rate for services has increased to 18%, compared with the older system
the Information Technology Sector is one of the GST benefit sectors. Different factors like the accessibility
of Input Tax Credit or ITC will cut down the operating expenses and, consequently, expand the Information
Technology sector's general productivity.

The main areas of the GST impact on IT sector are below:

1. The simpler Tax Rate Administration

24
 2. Removal of Cascading(double tax) Effect of Taxes

3. Business Restructuring

4. E-commerce

5. Opportunities in creating software for GST

5. Impact of GST on Banking Sector:

With the introduction of GST, the banking sector has turned out to be more costly. Before, the tax rate of the
services for the banking sector was 15%. However, after the implementation of GST, the tax rate has been
increased on all the banking areas to 18%. These are a few effects of GST on the banking sector:

1. Each separate part of Banks should have separate registration

2. Place of supply identification

3. Reliance upon CGST and SGST

4. The transactions between banks aren't free

5. Input Tax Credit or ITC in GST

6. Impact of GST on Hotel and Tourism:

Income generated from the tourism and hotel industry forms an important part of the Indian economy. They
help in expanding the GDP of India. This is the reason each State Government continues advancing the
travel industry of their state by different schemes. The rate of GST varies for the inns as a result of the
tariffs.

Goods & Services Tax rates for hotels are dependent on room tariff with impact from 1st October 2019.

1. If the tariffs range below Rs. 1,000, then there will be no GST.

2. If the tariff ranges between Rs. 1,000 to Rs. 7,500, then 12% GST will be levied.

3. If the tariff is more than Rs. 7,500, then 18% GST will be levied.

GST brought a single tax rate compared to the multiple taxes under the previous system. This has made it
easier for the industry and provides clarity to customer as well. So say that the hotel and tourism industry is
one of the sectors to benefit from GST.

7. Impact of GST on the Entertainment Industry:

The entertainment industry is one of the GST benefit sectors. Before the implementation of GST, the
entertainment sector had many taxes. They are not restricted to one tax or duty. They included the state tax,

25
central tax and tax by the local authorities. However, when GST came into motion, they moved into just one
tax.

GST was running between 18% to 28%. The tax rate depended upon the sort of Entertainment services
provided.

Things inside the 18% GST:

1. Movie Tickets

2. Television and DTH services

3. Theatre

4. Circus

Things inside the 28% GST:

1. Sporting event

2. Racing

3. Movie events and festivals

4. Amusement parks

5. Casinos

8. Impact of GST on Automobile Sector:

Following Goods & Services Tax implementation, a wide range of taxes like Excise Duties, VAT, Sales
Tax, and Road Tax cleared a path for a unified Goods & Services Tax. This brought an increase in
automobile deals. Numerous huge automobile brands experienced record growth in the year 2018 and 2019.
Customers believed it to be the ideal chance to buy vehicles. Thus, the automobile is another of the GST
benefit sectors.

9. Impact of GST on Export-Import Sector:

Before implementing the GST, Import and Export were administered by the Customs Duty, Excise Duty,
Value Added Tax, and Service Tax. All these taxes were put together as one at the point when GST was
presented. Yet, the BCD or Basic Customs Duty keeps on eating away at the import bills. IGST includes all
the taxes which were administering the imports of goods and services before the Goods & Services Tax.
Those taxes were:

1. CVD or Countervailing Duty

2. SAD or Special Additional Duty

26
At the point when IGST was applied, then:

1. The exports became zero-rated as per section 16 of the Integrated Goods and Services Tax Act or
IGST Act, 2017.

2. The State Government and the Central Government share the duty.

10. Impact of GST on the Education Sector:

Whenever there is a conversation over the development and growth of a country, the main thing thought
about is the strength of that country's education sector. The education sector is one of the GST benefit
sectors. The education of people has a significant part in the strength of a nation.

The government has therefore tried to keep education-related institutions excluded from the duties or taxes,
in the new Goods & Services Tax system. These include the services given by any educational association to
its staff, faculty and students.

11. Impact of GST on Real Estate:

This sector has seen a good growth in recent years and has been a vast business area. It is an industry that is
generally reliant on tax rates. Goods & Services Tax on real estate has brought more productive activities,
and numerous new brands have come up. Subsequently, these brands have been able to help the economy of
the nation enormously. Therefore, this too, has been one of the sectors to benefit from GST.

12. Impact of GST on Energy Sector:

The energy sector is one of the essential enterprises in any economy since power is critical for each business
activity. However leaving this sector being outside the scope of Goods & Services Tax will affect the
remaining economy. It disallows a sector of the benefits hoped to be accomplished by the introduction of
Goods & Services Tax.

Eventually, the Goods & Services Tax impact is likely going to be levelled out by falling costs. We needn't
waste time with the assistance of lowering taxes to enable economic growth. Therefore currently the energy
sector isn’t one of the sectors to benefit from GST.

13. Impact of GST on Iron and Steel:

Three sorts of taxes were applied on the manufacturing of iron & steel. Those duties were: -

1. 2% CST or Central Sales Tax

2. 5% VAT or Value Added Tax

3. 12.5% Excise Duty

27
When we see, there is an aggregate of 19.5% net duty that is forced upon iron & steel in the older system.
Under GST most of the items manufactured fall in the 12% and 18% category, while a few items fall under
the 28% category. So we can see that the iron and steel industry is one of the sectors to benefit from GST.

14. Impact of GST on Service Sector:

It is no news that the introduction of the GST will represent some significant benefits and a couple of
weaknesses to the service sector.

Many service sectors had a lot of changes as they adjusted to the presentation of this new tax system. We
can be sure that a considerable lot of them are glad given the changes. You can believe that this new tax
collection framework will likewise influence individuals all in all and not just businesses. All things
considered, there has been a positive GST impact on the service sector .

The positive GST impact on the service sector are:

1. No double taxation

2. Easier taxation for repairs and maintenance

3. Access to inputs held in stock

4. Fewer costs to service providers

5. It will bring equality in all states

6. The cost of inputs is likely to drop.

28
 E-SHRAM PORTAL FOR UNORGANIZED SECTOR

e-Shram is a portal created by the Ministry of Labor and Employment for the welfare of workers in the
unorganized sector who are not members of the EPFO or ESIC. Registered members will be eligible for a
variety of benefits after signing up for the Shramik Yojana and receiving an e-Shram card.

The Government of India started the e-Shram yojana to provide social security to workers in unorganised
sectors. The government also launched the e-Shram portal for the workers in unorganised sectors. The
objective of the e-Shram portal is to collect the database of unorganised workers to provide them with the
benefits of various government schemes.

A person working in an unorganised sector should apply for a Shramik card or e-Shram card. Through the e-
Shram card, the labourers and workers in the unorganised sectors can get various benefits, such as a pension
after 60 years, death insurance, financial aid in case of incapacity, etc. The objective of the e-Shram card is
to provide access for unorganised workers to all the new government schemes and facilities through the e-
Shram portal.

Benefits of e-Shram Card

The unorganised worker having an e-Shram card will get the following benefits:

• A pension of Rs.3,000 per month after attaining 60 years.

• Death insurance of Rs.2,00,000 and financial aid of Rs.1,00,000 in the case of partial handicap of a
worker.

• If a beneficiary (worker in an unorganised sector with an e-Shram card) dies due to a mishap, the
spouse will get all the benefits.

• Beneficiaries will receive a 12-digit UAN number valid throughout India.

Eligibility for e-Shram Card

• Any unorganised worker or any person working in the unorganised sector.

• Workers should be aged between 16-59 years.

• Workers should have a valid mobile number linked with the Aadhaar card.

29
e-Shram Card Registration: How to Apply Online?

The application for the e-Shram card can be made through the CSC (Common Service Centre) or the e-
Shram portal. The eligible persons can visit the nearest CSC centre and apply for the e-Shram card. They can
locate the nearest CSC centre on the e-Shram Portal by entering the state and district for applying for the e-
Shram card.

The process of filing the application for obtaining the e-Shram card online is as follows:

• Visit the e-Shram portal (Self-registration page).

• Enter the Aadhaar linked mobile number and the captcha code and click on the ‘Send OTP’ button.

• An OTP will be sent to the mobile number. Enter the OTP and click on the ‘Validate’ button.

• Confirm the personal details that appear on the screen.

• Enter the required details, such as address, educational qualifications, etc.

• Select the skill name, nature of business and the type of work.

• Enter the bank details and select the self-declaration.

• Click on the ‘Preview’ option to verify the details entered and click on the ‘Submit’ button.

• An OTP will be sent to the mobile number. Enter the OTP and click on the ‘Verify’ button.

• The e-Shram card is generated and displayed on the screen.

• The e-Shram card can also be downloaded by clicking on the download option.

Documents Required for e-Shram Card

• Aadhaar card.

• Mobile number linked with Aadhaar card.

• Bank account.

30
How to Download e-Shram Card?

After filing the application to obtain the e-Shram card, follow the below process to download the e-Shram
card:

• Visit the e-Shram portal.

• Click on the ‘Already Registered’ tab and select the ‘Update/download UAN card’ option.

• Enter the UAN number, date of birth, captcha code and click on the ‘Generate OTP’ button.

• Enter the OTP received on the mobile number and click on the ‘Validate’ button.

• Confirm the personal details that appear on the screen.

• Click on the ‘Preview’ option to verify the details entered, and click on the ‘Submit’ button.

• An OTP will be sent to the mobile number. Enter the OTP and click on the ‘Verify’ button.

• The e-Shram card is generated and displayed on the screen.

• The e-Shram card can also be downloaded by clicking on the download option.

31
 CHAPTER NO. 2: RESEARCH METHODOLOGY

Sr. No. Content

2.1 Types of Data Used
2.2 Sample Size
2.3 Research Instrument Used
2.4 Objective of Study
2.5 Limitations of Study
2.6 Scope of Study
2.7 Significance of Study

32
2.1 TYPES OF DATA USED:

PRIMARY DATA:

The primary data has been collected by designing structured questionnaire with relevant to project study and
research.

SECONDARY DATA:

Various websites were used while collecting secondary data.

2.2 SAMPLE SIZE:

Sample size of this project is limited to 62 respondents only.

2.3 RESEARCH INSTRUMENT USED:

Structured Questionnaire is used to collect primary data.

33
2.4 OBJECTIVES OF THE STUDY:

• To highlight the benefits associated with the implementation of GST.

• To know the changes in the level of price after implementation of GST.
• To find out the impact of GST on Unorganized Sector.
• To provide a conceptual framework of GST and its salient features.
• To study challenges faced while implementing GST.

34
2.5 LIMITATIONS OF THE STUDY:

1. Duration of the project is limited.

2. Updated data is unavailable.
3. Project study was in small scale.
4. Any subsequent change in the tax provision and rules by the government may make the
corresponding findings, suggestions redundant.

2.6 SCOPE OF THE STUDY:

The scope of study is limited to the people in Dombivli area. The implementation of GST have impact on
different sectors in the economy. The scope of the study focuses on impact of GST on Unorganized Sector in
the economy.

35
2.7 SIGNIFICANCE OF THE STUDY:

GST has mainly removed the Cascading effect on the sale of goods and services. Removal of cascading
effect has impacted the cost of goods. Since the GST regime eliminates the tax on tax, the cost of goods
decreases. GST is also mainly technologically driven. All activities like registration, return filing, application
for refund and response to notice needs to be done online on the GST Portal; this accelerates the processes.

Removing cascading tax effect:

1 .Higher threshold for registration.

2. Lesser compliances.

3. Composition scheme for small business.

4. Online simple procedure for GST.

5 .Defined treatment for e-commerce.

6. Regulating the unorganised sector.

7. Increased efficiency in logistics.

36
 CHAPTER NO. 3 LITERATURE REVIEW

PINKI, SUPRIYA KAMMA AND RICHA VERMA (July 2014) In their research of “Goods and Service
Tax- Panacea for indirect tax system in India” they have suggested that government in India is positive
towards implementation of GST. The objective of the study was to enquire the impact of GST after its
implementation. Their study was based on the secondary data source. It has implied that merging of various
taxes under one has led to simplicity of tax system. It proved to be beneficial to the Central government,
State government as well as to the consumer in the long term. They concluded that GST must be backed by
strong IT infrastructure for getting long term gain due to expensive software and complicated procedure.

NITIN KUMAR (2014) In his study “Goods and Service Tax-A Way Forward”-concluded that
implementation of GST in India help in removing the economic distortion by Current Indirect Tax system
and we have seen that total 160 countries have GST as their Indirect Tax System and it is successful in some
countries and in some it is working or developing. GST encourage unbiased tax structure which is indifferent
to geographical locations. It was seen in previous tax system that all the states have their own and different
tax rates, which may be the reason for Tax Evasion. So, GST may help in reducing Tax Evasion and
economic distortion.

MONNIKA GUPTA AND UPASANA HANDA (2016) In the research, “GST in India” examined the
consumption and production of goods and services is increasing due to the implementation of GST. Another
objective is to know the need for GST in India. The study is based on the secondary data sources and for
measuring the performance bar diagrams and various financial ratios were used. The study has revealed that
there are less chances of tax evasion. A study concluded that GST is a simpler, user friendly, transparent tax
system.

NISHITA GUPTA PROFESSOR (2015) In her study she concluded that tax policy plays an important role
on the economy through their impact on both efficiency and equity. A good tax system should keep in views
issues of income distribution and at the same time also endeavour to generate tax revenue to support
government expenditure on public services and infrastructure activities. GST can also help in reducing black
marketing and corruption in the economy but in longer context it is good for economy.

37
JAIPRAKASH (2014) In his research study mentioned that the GST at the Central and the State level are
expected to give more relief to industry, trade, agriculture and consumers through a more comprehensive and
wider coverage of input tax set-off and service tax set-off, subsuming of several taxes in the GST and
phasing out of GST. Responses of industry and also of trade have been indeed encouraging. Thus, GST
offers us the best opinion to broaden our tax base and we should not miss this opportunity to introduce it
when the circumstances are quite favourable and economy is enjoying steady growth with only mid
inflation.

SARAVANAN VENKADASALAM (2014) Has analysed the post effect of the goods and service tax (GST)
on the national growth on ASEAN states using Least Squares Dummy Variable Model (LSDVM) in his
research paper. He stated that seven of ten ASEAN nations are already implementing the GST. He also
suggested that the household final consumption expenditure and general government consumption
expenditure are positively significantly related to the gross domestic product as require and support the
economic theories. But the effect of the post GST differs in countries.

38
 CHAPTER NO. 4 DATA ANALYSIS AND INTERPRETATION

1) Gender
Particulars No. of Responses Percentage %
Male 13 21%
Female 49 79%
Not To Disclose 0 0%
Total 62 100%

Interpretation: Out of total respondents, 21% are Male and 79% are Female.

39
2) Age Group
Particulars No. of Responses Percentage %
18-25 28 45.2%
26-45 30 48.4%
46-60 4 6.5%
Above 60 0 0%
Total 60 100%

Interpretation: From the above graphical and tabular presentation it is identified that out of 62 respondents,
45.2% are between age group of 18 years-25 years, 48.4% are between 26 years-35 years and 6.5% are
between 46 years-60 years.

40
3) Category
Particulars No. of Responses Percentage %
Home Based Worker 8 12.9%
Self-Employed Worker 36 58.1%
Wage Worker 4 6.5%
Others 14 22.6%
Total 62 100%

Interpretation: From the above, 58.1% are self-employed worker, 12.9% are home based worker, 6.5% are
wage workers and 22.6% are others category.

41
4) GST is easy to calculate.
Particulars No. of Responses Percentage %
Strongly Agree 41 66.1%
Agree 10 16.1%
Neutral 9 14.5%
Disagree 1 1.6%
Strongly Disagree 1 1.6%
Total 62 100%

Interpretation: According to the survey, it is observed that 66.1% are strongly agree to the statement.

42
5) GST is transparent system of taxation.
Particulars No. of Responses Percentage %
Strongly Agree 43 69.4%
Agree 13 21%
Neutral 4 6.5%
Disagree 0 0%
Strongly Disagree 2 3.2%
Total 62 100%

Interpretation: From the above survey, it is observed that 69.4% are strongly agree to the statement.

43
6) What is the impact of GST on your business?
Particulars No. of Responses Percentage %
Positive 48 77.4%
Negative 6 9.7%
No Impact 8 12.9%
Total 62 100%

Interpretation: According to the survey, 77.4% of respondents have positive impact of GST on their
business. 9.7% have negative impact and 12.9% does not have any impact on their business.

44
7) Is there any change in price levels of your product after implementation of GST?
Particulars No. of Responses Percentage %
Increase 38 61.3%
Decrease 16 25.8%
No Change 8 12.9%
Total 62 100%

Interpretation: According to the survey, 61.3% of respondents have opinion that price level increased after
implementation of GST.

45
8) Are you aware about GST online procedures?
Particulars No. of Responses Percentage %
Yes 53 85.5%
No 9 14.5%
Total 62 100%

Interpretation: According to the survey, 85.5% of respondents are aware about GST online procedures and
14.5% are not aware about GST online procedures.

46
9) Do you face any problem related to GST like Tax procedures, Filing Returns, etc?
Particulars No. of Responses Percentage %
Yes 17 27.4%
No 45 72.6%
Total 62 100%

Interpretation: 72.6%of respondents do not face problems in GST. 27.4% of respondents face problems in
GST tax procedures and filing returns.

47
10) Which system do you think is more beneficial?
Particulars No. of Responses Percentage %
VAT 11 17.7%
GST 51 82.3%
Total 62 100%

Interpretation: According to survey, 82.3% of respondents thinks GST is more beneficial and 17.7% of
respondents thinks that VAT is beneficial.

48
11) Comparing to previous tax system, what do you think about GST?
Particulars No. of Responses Percentage %
Require Expensive Software 7 11.3%
Complicated Procedure 4 6.5%
Require Special Knowledge 6 9.7%
All Of The Above 45 72.6%
Total 62 100%

Interpretation: According to the survey, 72.6% of respondents thinks that it requires expensive software,
complicated procedure and special knowledge of GST.

49
12) Are you satisfied with variations of GST rates on your product?
Particulars No. of Responses Percentage %
Highly Satisfied 30 48.4%
Satisfied 21 33.9%
Not Satisfied 10 16.1%
Highly Dissatisfied 1 1.6%
Total 62 100%

Interpretation: From the above graphical and tabular representation, it is observed that, 48.4% of
respondents are highly satisfied, 33.9% of respondents are satisfied with variations of GST rates.

50
13) Do you think GST is beneficial for you?
Particulars No. of Responses Percentage %
Yes 45 72.6%
No 6 9.7%
May Be 11 17.7%
Total 62 100%

Interpretation: According to survey, 72.6% of respondents thinks GST is beneficial for them.

51
14) GST helps to remove cascading effect of tax.
Particulars No. of Responses Percentage %
Strongly Agree 40 64.5%
Agree 13 21%
Neutral 5 8.1%
Disagree 3 4.8%
Strongly Disagree 1 1.6%
Total 62 100%

Interpretation: According to survey 64.5% of respondents are strongly agree and 21% of respondents are
agree that GST helps to remove cascading effects of tax.

52
15) GST is helpful for overall development of nation.
Particulars No. of Responses Percentage %
Strongly Agree 42 67.7%
Agree 13 21%
Neutral 5 8.1%
Disagree 2 3.2%
Strongly Disagree 0 0%
Total 62 100%

Interpretation: Out of 62 respondents, 67.7% are strongly agree and 21% are agree that GST is helpful for
overall development of nation.

53
16) GST has increased the Cost Of Production.
Particulars No. of Responses Percentage %
Strongly Agree 13 21%
Agree 43 69.4%
Neutral 5 8.1%
Disagree 1 1.6%
Strongly Disagree 0 0%
Total 62 100%

Interpretation: From the above, 69.4% are agree and 21% are strongly agree that GST has increased the
cost of production.

54
17) GST has increased the Price Of Goods.
Particulars No. of Responses Percentage %
Strongly Agree 13 21%
Agree 37 59.7%
Neutral 9 14.5%
Disagree 3 4.84%
Strongly Disagree 0 0%
Total 62 100%

Interpretation: According to survey, 59.7% of respondents are agree and 21% are strongly agree that GST
has increased the price of goods.

55
18) GST is regulating the Unorganized Sector.
Particulars No. of Responses Percentage %
Strongly Agree 37 59.7%
Agree 12 19.4%
Neutral 6 9.7%
Disagree 6 9.7%
Strongly Disagree 1 1.6%
Total 62 100%

Interpretation: According to survey 59.7% of respondents are strongly agree and 19.4% of respondents are
agree that GST is regulating the unorganised sector.

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19) Are you aware about Composition Scheme?
Particulars No. of Responses Percentage %
Yes 54 87.1%
No 8 12.9%
Total 62 100%

Interpretation: From the above it is observed that 87.1% of respondents are aware about composition
scheme and remaining 12.9% are unaware about the composition scheme.

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20) How do you get knowledge about GST?
Particulars No. of Responses Percentage %
Professionals 10 16.1%
Friends & Relatives 8 12.9%
Online Sources 38 61.3%
Mass Media 2 3.2%
Others 4 6.5%
Total 62 100%

Interpretation: Out of 62 respondents 61.3% of respondents get knowledge about GST through online
sources, 16.1% through professionals, 12.9% through friends and relatives, 3.2% through mass media and
6.5% through other sources.

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21) Do you think GST supports ‘Digital India Campaign’ ?
Particulars No. of Responses Percentage %
Yes 50 80.6%
No 2 3.2%
May Be 10 16.1%
Total 62 100%

Interpretation: According to the survey 80.6% of respondents are of opinion that GST supports Digital
India campaign.

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22) What is your opinion about implementation of GST ?
Particulars No. of Responses Percentage %
Excellent 13 21%
Good 41 66.1%
Moderate 7 11.3%
Bad 1 1.6%
Total 62 100%

Interpretation: Out of 62 respondents 66.1% have rated Good for implementation of GST and 21% have
rated Excellent for the implementation of GST.

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 CHAPTER NO.5 FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS:

• Almost 82% of respondents are at opinion that GST is more beneficial than existing indirect taxes
system.
• Almost 85% of respondents are aware about GST online procedures.
• 77.4% of respondents have positive impact of GST on their business.
• It can be seen that majority of the respondents are of the opinion that price level of their product has
increased after the implementation of GST.
• Most of the respondents thinks the GST is easy to calculate and GST is a transparent system.
• Almost 72.6% of respondents are at opinion of GST is beneficial.
• It is found that majority of the respondents have rated GST as a "GOOD" tax system.

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SUGGESTIONS:
• There is a lot to be done as the informal section holds a significant share in the graph of the
employment. Firstly, the wages need to be taken care of care. There has to be a definite pay scale
specified for each category of labour.
• The schedule for payment also has to be fixed and secured. Regular payment of wages is an essential
factor for uplifting the poverty prevailing.
• The duration of labour needs to be rightfully set, and one should get overtime pay for overtime work.
• Necessary employment facilities should be made available to all, including sick leave and paid leave.
• Job security should be more strengthened.
• Medical and health facilities are also needed to be provided.
• Often, they work in unhygienic and suffocating conditions leading to severe health conditions. Thus,
a better work environment is a must-have.
• The government should also try to provide them with retirement benefits if possible.

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CONCLUSION:

GST has been so designed that credit of taxes paid at every stage of value addition from the point of
manufacture to the point of consumption, can be availed at the next stage. GST is essentially a tax on value
addition, and there is a seamless transfer of input tax credit across the value chain. GST will simplify and
harmonise the indirect tax regime in the country.

It is expected to reduce the cost of production and inflation in the economy, thereby making Indian trade and
industry more competitive, domestically as well as internationally. It is also expected that the introduction of
GST will foster a common or seamless Indian market and contribute significantly to the growth of the
economy. Further, GST will broaden the tax base, and result in better tax compliance due to a robust IT
infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value
addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by
traders.

The GST system is basically structured to simplify current Indirect tax system. A well designed GST is an
attractive method to get rid of deformation of the existing process of multiple taxation. Under GST various
indirect taxes are subsumed and it would result in a simpler tax regime. GST brings the transparency in the
tax system. It is a business-friendly tax system as there is a positive impact of GST on sellers and they feel
that it is personally benefitted to them. GST had reduced the corruption and solved the problem of tax
evasion. Not only business-friendly, it is also a consumer-friendly tax system as it reduced the burden of cost
on the customers. GST required special knowledge for filing the return and also its procedure is very
complicated so it should be made easy for filing. It is a good option as it supports ‘Digital India’ campaign
and also it acts as a source of revenue for the government. It will allow India to better negotiate its term in
the international trade forums. This will make the Indian market more stable than before and Indian
companies can compete with the foreign companies.

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 BIBLIOGRAPHY AND WEBLIOGRAPHY

10 Benefits of Goods and Service Tax (GST) - ClearIAS

Impact of GST on Different Sectors (khatabook.com)

Unorganised Sector in India with Example and List - PSCNOTES.IN

Impact of GST on MRP of Goods and Services | GST Blog (gstrobo.com)

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 APPENDIX

QUESTIONNAIRE

1) Gender
Male
Female
Not To Disclose

2) Age Group
18-25
26-45
46-60
Above 60

3) Category
Home Based Worker
Self-Employed Worker
Wage Worker
Others

4) GST is easy to calculate.

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

5) GST is transparent system of taxation.

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

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6) What is the impact of GST on your business?
Positive
Negative
No Impact

7) Is there any change in price levels of your product after implementation of GST?
Increase
Decrease
No Change

8) Are you aware about GST online procedures?

Yes
No

9) Do you face any problem related to GST like Tax procedures, Filing Returns, etc?
Yes
No

10) Which system do you think is more beneficial?

VAT
GST

11) Comparing to previous tax system, what do you think about GST?
Require Expensive Software
Complicated Procedure
Require Special Knowledge
All Of The Above

12) Are you satisfied with variations of GST rates on your product?
Highly Satisfied
Satisfied
Not Satisfied
Highly Dissatisfied

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13) Do you think GST is beneficial for you?
Yes
No
May Be

14) GST helps to remove cascading effect of tax.

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

15) GST is helpful for overall development of nation.

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

16) GST has increased the Cost Of Production.

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

17) GST has increased the Price Of Goods.

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

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18) GST is regulating the Unorganized Sector.
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

19) Are you aware about Composition Scheme?

Yes
No

20) How do you get knowledge about GST?

Professionals
Friends & Relatives
Online Sources
Mass Media
Others

21) Do you think GST supports ‘Digital India Campaign’ ?

Yes
No
May Be

22) What is your opinion about implementation of GST ?

Excellent
Good
Moderate
Bad

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