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

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. � 2019, Springer Nature Limited.