Impact of goods and services tax in Sikkim: A study

In India, rapid economic growth has raised concerns about expanding economic development across sectors, regions, and people. The Goods and Services Tax (GST) is a destination-based tax levied on the principle of “Consumption.” This represents a major reform in the nation’s indirect tax system, contributing to enhanced tax collection and further economic growth. The objective of this study is to assess the impact of GST in Sikkim, India. Overall, GST has had a positive impact on the nation’s economic growth. However, when examining tax classification by sector, the introduction of GST has produced both positive and negative outcomes. The nature of the study is analytical, and a self-structured questionnaire was administered to 150 respondents in Sikkim. Additionally, GST has simplified tax compliance compared to the previous tax regime. The primary goal of introducing GST in the nation is to eliminate the cascading effect of indirect taxes on various goods levied at multiple levels, fostering cooperative and uniform taxation to boost the nation’s economic growth. The study concludes that post-GST implementation, retailers in Sikkim have been able to claim input tax credits more efficiently. In a developing country where tax principles change frequently, individuals who do not stay updated with these changes may become functionally tax illiterate. Future research should investigate the impact of GST literacy initiatives on different regions of the country.