Effect of GST System on Business Performance of Carbonated or Aerated Soft Drinks Industry

Abstract

The implementation of the Goods and Services Tax (GST) on July 1, 2017, has significantly transformed the tax framework, thereby establishing a novel trajectory for the Indian economy. The proposed scheme for taxes was initially intended to address the shortcomings of the prior tax system. However, subsequent to its introduction, it has garnered varying evaluations from various stakeholders, including industries, academia, and other relevant parties. The implementation of the One Nation One Tax has resulted in significant alterations that have had a profound influence on various sectors across different industries within the economy. This paper provides a thorough analysis of the effects of GST system on the aerated soft drinks industry. The present study is grounded in a primary survey conducted among a sample of 380 registered carbonated or aerated drinks enterprises. The empirical results derived from the application of Structure Equation Modelling (SEM) shed light on the positive impact of tax knowledge on business effectiveness and the prevention of tax fraud within firms. Furthermore, the progression of technology in the tax structure, coupled with the acquisition of knowledge, has facilitated the establishment of effective tax administration and governance practices by companies, thereby augmenting their overall productivity. The findings have the potential to yield advantageous outcomes for policymakers, governments, and businesses, as a comprehensive understanding of taxation would facilitate prompt adherence to tax regulations and mitigate instances of tax evasion, avoidance, and fraudulent activities.