GST REFORMS AND THEIR CONTRIBUTION TO ECONOMIC DEVELOPMENT IN INDIA

Abstract

India's indirect tax architecture underwent a radical overhaul with the implementation of the Goods and Services Tax (GST) in 2017. This article-based review investigates the systemic effects of this transition on the broader economic landscape. Prior to this reform, the Indian market suffered under a fractured framework of cascading taxes, where central and state levies operated in silos. The current literature highlights GST as a critical driver of economic integration. It effectively dissolved state borders for trade, creating a unified national market. This paper critically examines how the new tax structure impacts manufacturing efficiency, supply chain logistics, and the formalization of Micro, Small, and Medium Enterprises (MSMEs). Challenges certainly persist. Technological glitches in the compliance portal and frequent rate rationalizations have caused friction for taxpayers. Despite these implementation hurdles, academic consensus points toward long-term fiscal stabilization. The findings suggest that GST removes massive inefficiencies from the logistics sector and widens the formal tax base. The reform ultimately functions not just as a revenue collection mechanism, but as a structural foundation for sustained macroeconomic growth in India.