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VOL. 8, ISSUE 2 (2026)
Comprehensive analysis of the development and impact of Goods and Services Tax (GST) in modern economies
Authors
Ujjwal Sharma
Abstract
One of the main components of contemporary
indirect taxation systems is the Goods and Services Tax (GST), a comprehensive
value-added tax on the supply of goods and services. It began as VAT in France
in 1954 and has since spread to more than 175 countries. In countries like
Australia, Canada, New Zealand, and India, it is frequently referred to as GST.
In order to prevent double taxation and increase efficiency, GST replaces
disparate cascading taxes with a single, destination-based system that allows
for seamless input tax credits. Its creation promotes a single market, lessens
the burden of compliance, and expands the tax base while addressing
inefficiencies in the previous sales and excise taxes. Globally, revenue
neutrality and economic integration have been improved by successful
implementations in nations like New Zealand (with few exemptions and low
rates), while difficulties in intricate federal systems, like early inflation
or IT issues in Malaysia and India, highlight implementation barriers. GST has
a very positive effect on modern economies: it reduces evasion, increases
revenue through broader compliance (for example, India's taxpayer base grew
from 6.65 million in 2017 to 15.1 million by 2025), and increases GDP growth by
1-2% through improved logistics, formalization, and competitiveness. GST
revenue and economic growth are positively correlated, according to empirical
research, including ARDL models. India's recent 2025 reforms, which included
exemptions, rate reductions on necessities, and a simplification to two main
slabs (5% and 18%), have increased consumption, lowered household expenses by
up to 13%, and strengthened resilience in the face of international trade
tensions.
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Pages:20-24
How to cite this article:
Ujjwal Sharma "Comprehensive analysis of the development and impact of Goods and Services Tax (GST) in modern economies". International Journal of Law, Policy and Social Review, Vol 8, Issue 2, 2026, Pages 20-24
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