A STUDY OF PERCEPTION OF TAXPAYERS TOWARDS GST WITH
REFERENCE TO MADHYA PRADESH
* PREETI SINGH CHOUHAN ** Dr. SWARANJEET ARORA
*** Dr.SACHIN MITTAL
*Assistant Professor, Shushila Devi Bansal College of Engineering. Indore. Contact Address: 83
Brahmbag colony Marimata square, Indore (M.P.) 452006.
** Associate Professor, Prestige Institute of Management and Research, Indore. Contact Address: 503
Vishnu Puri Anex. , Indore (M.P.)
*** Assistant Professor, Jaipuria Institute of Management, Indore Contact Address: 233 Goyal nagar,
Indore, (M.P.) 452016.
ABSTRACT
Taxation plays a significant and important role in the process of advancement and growth of the
country. Tax reform is the process of varying the way taxes are composed or managed by the
government .The objective of the present study is to identify factors affecting the perception of the
taxpayers, towards Goods and Service Tax with reference to Madhya Pradesh and to locate the issues
and differences in the perception. The study is based on the primary data collected from the taxpayers
(Wholesalers, retailers, tax practitioners and chartered accountants) of different cities of Madhya
Pradesh by the means of questionnaire. It is found that the perception of the taxpayers regarding the
returns and assessment aspect is affected by some factors and their perception varies on some aspects.
Findings of the study are expected to serve as a guide and help government in making policies by
understanding the perception of the tax payers.
Keywords: Tax Return, Assessment, GST, Value Added Tax, VAT, Taxpayer.
INTRODUCTION
Indian taxation system has undergone through set of reforms during the previous decade and is still
continuing the process through advent of goods and service tax system. The tax rates have been
updated and tax laws have been changed resulting in improved compliance, ease of tax payment and
better enforcement. The Goods and Services Tax (GST) is a value added tax that directly affects every
sector and sections of our economy. A number of countries implemented this tax system followed by
France, the first country introduced GST. A new story of VAT is Goods and service tax which gives
an extensive setoff for input tax credit and subsuming many indirect taxes from national level and
state. India is a centralized self-governing country and therefore the GST is implemented parallel by
the central and state governments as CGST and SGST correspondingly. At the Central and the State
level implementation of the Value Added Tax (VAT) has been considered to be a most important step
– an essential step forward – in the globe of indirect tax reforms in India. At the national level if the
VAT is a key improvement over the pre-existing Central excise duty and the sales tax system at the
State level, then the Goods and Services Tax (GST) is definitely an additional important perfection,
the next rational step, in the direction of an extensive indirect tax reforms in the country.
In some form almost 150 countries have introduced GST. While countries such as Indonesia has five
positive rates, a zero rate and over 30 categories of exemptions New Zealand and Singapore tax
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virtually everything at a single rate, GST applies only to goods and the provision of repairs,
replacement and processing services in China
GST model
1. CGST – Central goods and service tax for levied by central Govt.
2. SGST – State goods and service tax levied by state Govt.
3. IGST or integrated GST to be collected by the central government
A sale transaction within the state will have 2 taxes. SGST, CGST.A sale transaction within the
outside the state i.e. sales from one state to another will have a single tax IGST. The GST is
introduced not only to get rid of the past patch work of indirect taxes that were partial and suffer
from infirmities ,mostly exemption and multiple rates but also to improve tax compliance. Tax
compliance takes place through filing tax returns so complications are related with it only , this study
tried to explore the perceptions of Wholesalers, Retailers, Chartered Accountants, and Tax
practitioners towards GST and tried to get answer of the following questions, Are they satisfied with
current vat structure, they are ready to accept GST in place of VAT.
LITRATURE REVIEW
Rastogi et. al, ( 2009) explained the exclusive structure of India‟s Constitution comprising the Union
Government at the Centre and the State Governments in the different Indian states has created a
complex and multi-layered system of consumption taxes. Under this Constitution, Central
Government is empowered to impose excise duties on the production or manufacture of goods and
service taxes on the provision of services. The Central Government can also empower and regulate
imposition of taxes on interstate sales of goods. Conversely such taxes may be levied or collected by
the states.
Kasinath,S. (2016) stated in his paper Article that The Union Finance Minister of India Sri Arun
Jaitely spoke about the fiscal policy ,in the Union Budget in Parliament in 2016. The Finance bill
approved by President of India will become Finance Act .The direct tax to GDP ratio has gone up
substantially during the above study period. In the end there are few suggestions made to the
Government in the interest of taxpayers. The fiscal policy encompasses the Direct and Indirect Taxes.
Raghuram and Deepa (2015) studied the process of introducing the Goods and Services Tax (GST),
bringing out the perspectives of different stakeholders and the contentious issues. The GST was
expected to subsume a variety of taxes and simplify the indirect tax regime. The Empowered
Committee (EC) was mandated in 2007, to bring about consensus among the States to move towards
GST. The important stakeholders in the process were the Government of India (GOI), individual
States, industry and the committees commissioned by the GOI or EC. However, the EC faced
challenges since there were issues of control between the Centre and States, perceived loss of revenue
by some States, extent of uniformity across various commodities and their tax rates, input credit
mechanism and dispute settlement. The deadline for the introduction of GST kept getting postponed
due to the slow resolution of the challenging issues. Finally, it was tabled in the Parliament as the
122nd Constitutional Amendment Bill (CAB) in December 2014.
Garg, G. (2014) Studied Basic Concepts and Features of Good and Service Tax in India, and found
that GST is the most logical steps towards the comprehensive indirect tax reform in our country since
independence. GST will create a single, unified Indian market to make the economy stronger. Experts
say that GST is likely to improve tax collections and Boost India‟s economic development by
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breaking tax barriers between States and integrating India through a uniform tax rate. Under GST, the
taxation burden will be divided equitably between manufacturing and services, through a lower tax
rate by increasing the tax base and minimizing exemptions.
Taqvi et. al, (2013) revealed that the Goods and Services Tax (GST) is a value added tax to be
implemented in India, the decision on which is pending. GST is the only indirect tax that directly
affects all sectors and sections of our economy Therefore; we all need to learn it whether willingly or
as compulsion. The goods and services tax (GST) is aimed at creating a single, unified market that
will benefit both corporate and the economy. The changed indirect tax system, GST-Goods and
service tax is planned to execute in India.
Vasanthagopal,R. (2011) Studied “GST in India: A Big Leap in the Indirect Taxation System”, and
found that the positive impacts are dependent on a neutral and rational design of the GST, balancing
the conflicting interests of various stakeholders, full political commitment for a fundamental tax
reform with a constitutional amendment, the switchover to a „flawless‟ GST would be a big leap in
the indirect taxation system and also give a new impetus to India‟s economic change. It is also noted
that, buoyed by the success of GST, more than 140 countries have introduced GST in some form to
other and is fast becoming the preferred form of indirect tax in the Asia Pacific region
Research Methodology
The Study
The present investigation is based on exploratory research inquiry and examines the tax payer‟s
perception in Indore region.
The Sample
For this study the data was collected from 250 vat payers of Madhya Pradesh of India. The sample
of 250 respondents of VAT payers was selected at random from different cities of Madhya Pradesh of
India such as Indore, Bhopal and Jabalpur. Out of these 250 respondents (16 respondents age were
less than 30; 45 respondents from age group of 30- 40 years; 101 from age group of 40-50 years and
88 respondents age were above 50 years). 180 respondents were male and 70 female. 26 respondents
were MBA; 58 M.com; 109 chartered accountants and 56 respondents were holding different degrees
as B.com, BBA etc. 81 respondents were wholesalers; 48 retailers; 24 tax practitioners and 97
respondents were chartered accountant. 50 respondents experience was less than 5 years; 93 were
between 5 to 10 years; 65 were between 10 to 15 and 42 have experience of above 15 years. The study
is made with particular reference to Madhya Pradesh Value Added Tax. Here the term taxpayer has
been used to include those who have tax payment experiences. These include those who have the
experience of tax payment at the tax office on their own, who are traders, and those who have the
experience of tax payment on behalf of the others and the clients who are professional accountants.
The respondents were selected through convenient sampling.
Tools for Data Collection
The study is based on primary data that is collected through the use of a questionnaire. As this
research has a quantitative base so questionnaire used in this research is close ended questionnaire.
The research instrument comprises of number of statements under one macro statement (variable). It
includes perception of different types of tax payers toward tax reform. Respondents were asked to
indicate their degree of agreement with each of the questions on a five-point Likert scale. In this study
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the reliability of the scales was first evaluated using Cronbach‟s alpha, which measures the
consistency with which respondents answer questions within a scale. The period of data collection for
the present research ranged from 15 December 2015 to 5 may 2016. .
Tools for Data Analysis
In the present study factors analysis and one way ANOVA test were applied using SPSS.
Item Total Correlation and Reliability of the Measures
Reliability of the measures was assessed with the use of Cronbach‟s alpha on all items. Cronbach‟s
alpha allows us to measure the reliability of different variables. It consists of estimates of how much
variation in scores of different variables is attributable to chance or random errors (Selltiz et al.,
1976). As a general rule, a coefficient greater than or equal to 0.7 is considered acceptable and a good
indication of construct reliability (Nunnally, 1978). Cronbach‟s alpha is .811. Hence, it was found
reliable for further analysis
TABLE 1:RELIABILITY STATISTICS
Cronbach's Alpha Cronbach's Alpha
Based on
Standardized Items
N of Items
.804 .811 8
OBJECTIVE
To explore the perceptions of Wholesalers, Retailers, Chartered Accountants, and Tax officials
towards Goods and Service tax with special reference to Madhya Pradesh.
HYPOTHESES
H01 -There is no significant difference in the opinion of Value Added tax payers (Wholesalers,
Retailers, Chartered Accountants, and Tax officials) towards GST with respect to their experience
RESULTS AND DISCUSSION
To test the correlation among all the variables in the population under study, Kaiser-Meyer-Olkin
(KMO) measure of sampling adequacy and the Bartlett‟s test of sphericity were performed
TABLE 2: RESULT OF THE KMO AND BARTLETT'S TEST FOR VAT PAYERS
TOWARDS GST
KMO AND BARTLETT'S TEST
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy. .802
Bartlett's Test of
Sphericity
Approx. Chi-Square 325.030
df 6
Sig. .000
To test the correlation among all the variables in the population under study, Kaiser-Meyer-Olkin
(KMO) measure of sampling adequacy and the Bartlett‟s test of sphericity were performed The
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generated score of KMO was .802 reasonably supporting the appropriateness of using factor analysis.
The generated score of KMO was .802, reasonably supporting the appropriateness of using factor
analysis. The Bartlett‟s test of sphericity was highly significant (p<0.01), rejecting the null hypothesis
that the eight variables are uncorrelated in the population.
Result of Factor analysis.
Using Principal components with varimax rotation only attributes with factor loadings of 0.5 or
greater on a factor were regarded as significant. There were eight variables in this section and out of
8, 4 variables are considered as significant with factor loading of .5 or greater. The factor analysis
generated one factor explaining 64.613 percent of the variability in the original data
1) GST implementation: This factor mentioned that GST will improve government revenue. it is
measured by item 8, 3, 6 and 4.These items are “GST will improve central/state government revenue”,
“I feel that central and state government should govern GST jointly”,”Due to implementation of GST
differentiation between service tax and goods tax will be difficult GST should come with lower rate”
Table displays that variable 8 is the strongest and explains 64.618 percent variance and has total factor
load of .813.
TABLE 3: COMPONENT MATRIX FOR PERCEPTION OF VAT PAYERS TOWARDS GST
Var No. F1 Communalities
8 .813 .661
3 .807 .652
6 .800 .641
4 .795 .637
EV 2.585
`1CV 64.618
*Note: one Factor is derived factor
Table 4: FACTOR ANALYSIS (LOADINGS WITH VARIABLES)
Factors Item Item Item Item
FACTOR 1
GST
implementation
I feel that central
and state
government
should govern
GST jointly.
(3.61)
GST will
improve
central/state
government
revenue.
(3.56)
Due to
implementation of
GST differentiation
between service tax
and goods tax will be
difficult. (3.66)
GST should
come with
lower rate.
(3.51)
*The values in parenthesis represent the average score for the variables under each Factor that
determine the perception of VAT payers towards GST
RESULTS OF ONE WAY ANOVA
To test the significance of variance and understand inter-level difference between and within group
treatments, the data were treated with F test analysis
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TABLE 5: ANOVA
Sum of
Squares
df Mean Square F Sig.
Between Groups 3.992 3 1.331 3.588 .015
Within Groups 83.440 225 .371
Total 87.432 228
Table 5 shows that F 3.588 and sig 0.015 which is less than .05 (95 percent confidence level) the
null hypothesis is accepted and it is concluded that there is significant difference in the opinion
of vat tax payers towards GST with respect to their experience.
TABLE 6:DESCRIPTIVES
N Mean Std.
Deviat
ion
Std.
Error
95% Confidence
Interval for Mean
Minimu
m
Maximum
Lower
Bound
Upper
Bound
less than 5 50 3.7625 .5956
1 .08423 3.5932 3.9318 2.13 4.75
5 to 10 84 3.5268 .5115
6 .05582 3.4158 3.6378 1.88 4.63
10 to 15 56 3.6138 .7440
2 .09942 3.4146 3.8131 1.38 4.75
more than
15 39 3.8782
.6045
9 .09681 3.6822 4.0742 2.13 4.63
Total 229 3.6594 .6192
5 .04092 3.5788 3.7400 1.38 4.75
To test the significance of difference between means of education, Tukey test was applied
TABLE 7:MULTIPLE COMPARISONS
Dependent Variable: GST
(I) experience (J) experience Mean
Differenc
e (I-J)
Std.
Error
Sig. 95% Confidence Interval
Lower
Bound
Upper Bound
Tukey HSD
less than 5
5 to 10 .23571 .10877 .136 -.0458 .5173
10 to 15 .14866 .11849 .593 -.1580 .4553
more than 15 -.11571 .13010 .810 -.4524 .2210
5 to 10
less than 5 -.23571 .10877 .136 -.5173 .0458
10 to 15 -.08705 .10506 .841 -.3590 .1849
more than 15 -.35142* .11800 .017 -.6568 -.0460
10 to 15 less than 5 -.14866 .11849 .593 -.4553 .1580
5 to 10 .08705 .10506 .841 -.1849 .3590
more than 15 -.26437 .12701 .162 -.5931 .0644
more than 15 less than 5 .11571 .13010 .810 -.2210 .4524
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5 to 10 .35142* .11800 .017 .0460 .6568
10 to 15 .26437 .12701 .162 -.0644 .5931
Bonferroni
less than 5 5 to 10 .23571 .10877 .188 -.0538 .5252
10 to 15 .14866 .11849 1.000 -.1667 .4640
more than 15 -.11571 .13010 1.000 -.4620 .2306
5 to 10 less than 5 -.23571 .10877 .188 -.5252 .0538
10 to 15 -.08705 .10506 1.000 -.3667 .1926
more than 15 -.35142* .11800 .019 -.6655 -.0373
10 to 15 less than 5 -.14866 .11849 1.000 -.4640 .1667
5 to 10 .08705 .10506 1.000 -.1926 .3667
more than 15 -.26437 .12701 .231 -.6024 .0737
more than 15 less than 5 .11571 .13010 1.000 -.2306 .4620
5 to 10 .35142* .11800 .019 .0373 .6655
10 to 15 .26437 .12701 .231 -.0737 .6024
*. The mean difference is significant at the 0.05 level.
From the Tukey Test „Multiple Comparisons‟ shows that the entire groups vary with each other. For
all the category of experience, the value p is lower than the significant level of .05; hence these groups
vary. On the basis of above table we can conclude that taxpayers who are having more experience
have better understanding and approach towards tax system.
FINDINGS
Result of factor analysis
To analyze the perception of VAT payers toward the goods and service tax we have studied the
current tax system and the perception of respondents toward its. Several variables such as GST
impact, its implementation etc have been studied. One factor was explored.
GST implementation: This factor mentioned that GST will improve government revenue and they
believe that after the implementation of GST differentiation between goods tax and service tax will be
difficult
On the Basis of one way ANOVA
There is significant difference in the perception of Value added tax payers with respect to their
experience then there lays a difference, the person who are having good experience of above 15 years
they are supporting Goods and service tax implementation..
CONCLUSION
On the basis of the above study we can conclude that tax payers are ready to accept Goods and
service tax they are taking it in a positive manner. The study discloses that the perception of
taxpayers vary on the basis of experiences as tax payers who have good experience of above 15 years
are supporting Goods and service tax in place of old indirect tax system.
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Kasinath, S. (2016). A Study of Income Tax in India: Taxpayers Point of View. Journal of
Commerce and Management Thought, 7(4), 768-780.
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Nunnally, C. (1978). Psychometric Theory. McGraw-Hill: New York, NY.
Parry C. (1998), “Process of a case study methodology for post graduate research in
marketing” European Journal of Marketing Vol. 32 No. 9/10 PP. 785-802
Raghuram & Deepa (2015) Goods and Services Tax: The Introduction Process, Working
Paper No. /03/01 Indian Institute of Management, Ahmedabad
Selltiz, C., Wrightsman, L. and Cook, W. (1976). Research Methods in Social Relations. Holt,
Rinehart and Winston: New York, NY.
Taqvi, M.; Srivastava, A. and Srivastava, R. (2013). Challenges and Opportunities of Goods
and ServiceTax (GST) in India .Journal of applied research, 3(5).
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International Journal of Trade, Economics and Finance, 2 (2), 123-139.
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publications
Oulton T. (1995), “Management Research for information” Management Decision, Vol.33
No.5 PP.63-67
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Annexure:
QUESTIONNAIRE (VAT)
Dear Sir / Madam
I am currently pursuing PhD from DAVV University, on “A Managerial Study of Tax Reforms in
India: Strategic Challenges and Issues” We recognize the value of your time, and sincerely
appreciate your efforts on our behalf. Individual responses are anonymous and all company level data
will be held in confidence. Please take few minutes to complete this survey and submit it at your
earliest convenience.
Section 1 Preliminary questions:-
Name:-
Designation:-
Organization:-
Age:-
Less than 30 30 to 40 40 to 50 More than 50
Gender: - Male / Female
Category:-
wholesaler retailer Tax
practitioner
Chartered accountant
Contact details:-
Address:-
Town/city:-
State:-
E-mail Id:-
Qualification
Experience
Less than 5 5 to 10 10 to 15 More than 15
MBA M.COM CA Others
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Section 2
Please rank below listed question on 1-5 likert scale, as mentioned below
1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree
Goods and service tax
a) GST Will reduces inflation (Avoid double point duty)
b) GST will reduce the cash / black market.
c) GST Will ,Improve Central / State Govt. Revenue
d) GST Should come with Lower Rate.
e) GST Seminars required at root level.
f)Due to implementation of GST Differentiation between service
tax and good tax will be difficult
g)I feel Government should implement GST
h)I feel that Central and state government should govern GST
jointly
Place:
Signature
Date:
Mrs . Preeti singh Chouhan
Thank you for completing this questionnaire………….
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