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Analysis of barriers in implementation of Goods and Service Tax (GST) in India using interpretive structural modelling (ISM) approach

Author

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  • Manoranjan Kumar

    (Indian Institute of Technology Bhubaneswar)

  • Akhilesh Barve

    (Maulana Azad National Institute of Technology Bhopal)

  • Devendra K. Yadav

    (Indian Institute of Technology Bhubaneswar)

Abstract

Goods and Service Tax (GST), a destination-based unified taxation system, was implemented on 1st July 2017 in India replacing 17 different indirect taxes with the vision to create a seamless common market. A country like India, with the population of over 1.3 billion and heterogeneous distribution of wealth having a federal structure, opted for six different tax slab and dual-GST structure. In some countries, GST has been successful but in others, it has failed. We have attempted to investigate the barriers to the smooth implementation of GST. In this paper, we have identified 12 barriers to GST implementation. Using interpretive structural modelling (ISM), this study finds the driving and dependence nature of different barriers to develop a structural model. The results of analysis found that lack of skilled manpower, lack of clarity of GST provisions, political unwillingness, and lack of policy for proper division of tax are the major barriers in the implementation of GST. In addition to the above analysis, MICMAC analysis is utilized to cluster the barriers in four categories as per their relative driving and dependence powers.

Suggested Citation

  • Manoranjan Kumar & Akhilesh Barve & Devendra K. Yadav, 2019. "Analysis of barriers in implementation of Goods and Service Tax (GST) in India using interpretive structural modelling (ISM) approach," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 18(5), pages 355-366, October.
    • Handle: RePEc:pal:jorapm:v:18:y:2019:i:5:d:10.1057_s41272-019-00202-9
    DOI: 10.1057/s41272-019-00202-9
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    References listed on IDEAS

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    1. Rajesh Chadha, 2009. "Moving to Goods and Services Tax in India : Impact on India’s Growth and International Trade," Trade Working Papers 23071, East Asian Bureau of Economic Research.
    2. Raut, Rakesh D. & Narkhede, Balkrishna & Gardas, Bhaskar B., 2017. "To identify the critical success factors of sustainable supply chain management practices in the context of oil and gas industries: ISM approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P1), pages 33-47.
    3. Nor Hafizah Abdul Mansor & Azleen Ilias, 2013. "Goods and Services Tax (GST): A New Tax Reform in Malaysia," International Journal of Economics, Business and Management Studies, Online Science Publishing, vol. 2(1), pages 12-19.
    4. Abhijit V. Banerjee, Shawn Cole, Esther Duflo, 2004. "Banking Reform in India," NCAER Working Papers Vol. 1, National Council of Applied Economic Research.
    5. Ahmad, Ehtisham & Poddar, Satya, 2009. "GST reforms and intergovernmental considerations in India," LSE Research Online Documents on Economics 38346, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Pankaj Dikshit & M. P. Gupta & Arpan Kumar Kar & B. Chandra, 2022. "Taxation transformation of businesses enabled by information systems: an empirical study of Goods and Services Tax implementation in India," SN Business & Economics, Springer, vol. 2(9), pages 1-26, September.
    2. Siti Norwahida Shukeri & Faisal D Alfordy, 2021. "Valued Added Tax (VAT) Impact on Economic and Societal Well-Beings (Pre-and Post COVID19): A Perception Study From Saudi Arabia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(1), pages 92-100, January.

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