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GST confusion could have a negative impact on the ranking for the ease of doing business

India has a ranking of 130 out of 190 countries in the easy of doing business; it is still away from the target to be one of the top 50 countries

Due to the frequent alteration on the tax rates of various products under GST, and the lack of clarity on the same could have a significant impact on the hopes of improving the ranking on the ease of doing business Index that is brought out by the International Finance Corporation. The Government took efforts to reform the process; India is still placed at number 130 out of the 190 countries last year which is only a single notch in comparison to the last year rankings.


One of the significant areas of the government was the focus on the improvement in the rankings of the ease of doing business across the country. GST was implemented with an intention to create one tax for the entire nation, but the current uncertainty over the rate of taxes and the issued faced by businesses in the filing of returns will have a huge impact on the ease of doing business index. A report by KPMG mentioned that an industry will have to go through the cycle of re-fixing the consumer prices in case the GST rates are revised within a time period of two months after the launch. Those businesses, that have been affected will be required to communicate the changes through the supply chain and revise the projections of consumer demand in addition to rearranging the marketing policies.

Making changes frequently shows an impression of uncertainty in doing business in the nation, which has been a major complaint from global businesses.


There is confusion over the GST rates and the portal has also not been working well. This has led to more problems for the industry which need to be addressed. This mismanagement has hit the small traders and the medium traders the most since most of the operations are carried out by them in house with the lack of advisors to guide them through any form of crisis.

The implementation of GST in the country coupled with the confusion for the traders who need to follow different methods of compliance in the tax structure has led to a huge amount of chaos. Earlier this month, the finance minister of India, Arun Jaitley said Rs.95, 000 crore was collected for July under GST which is 64% compliance. There are claims exceeding Rs.1 crore which will be checked by the department in order to ensure that there is no discrepancy. The implementation of GST has had multiple impacts on the country. It has had a significant impact across the small and medium scale traders. It is expected that the complexity related to GST will reduce in the future and it will have a positive long term impact on the economy.

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