IMPACT OF GST ON E-COMMERCE AND RETAIL SECTOR, A COMPARATIVE STUDY OF AMAZON AND RELIANCE RETAIL (2017-2026)

Author Name: Ms. Bhagyashree Bhagwat Bhadane, Mr. Jagadish Bhargav, Ms. Shumiya Shaikh

Volume: 04/01

Country: India

DOI NO.: 11.2023-61555522 DOI Link: https://doi-ds.org/doilink/04.2026-54555691/GIJNR

Affiliation:

1. Student, MBA finance 2nd year (4th Sem), Faculty of Management, Parul University, Vadodara, Gujarat.
2. Student, MBA finance 2nd year (4th Sem), Faculty of Management, Parul University, Vadodara, Gujarat.
3. Assistant Professor, Faculty of Management, Parul University, Vadodara, Gujarat.

ABSTRACT

India's taxation landscape underwent a radical transformation on July 1, 2017, when the Goods and Services Tax came into effect. This landmark reform replaced a complex web of central and state taxes with a single, unified tax structure. For businesses, particularly those operating nationally, this change promised to eliminate the cascading effect of taxes and create a seamless national market. The journey toward GST implementation spanned over a decade of deliberations, consultations, and legislative processes, making it one of the most significant economic reforms in India's post-independence history. The reform affected virtually every sector of the economy, with the retail sector experiencing particularly profound changes. The pre-GST era presented numerous challenges for retailers. Companies like Amazon and Reliance Retail had to maintain separate accounting systems for different states, each with its own tax rates and compliance procedures. Interstate movement of goods required extensive documentation, and entry taxes at state borders added both cost and delay to supply chain operations. These inefficiencies particularly affected e-commerce platforms, whose business model depended on rapid, nationwide delivery. The complexity of the tax structure often meant that businesses spent considerable resources on tax compliance rather than focusing on core operational excellence. Industry estimates suggested that logistics costs in India were among the highest in the world, with tax-related delays contributing significantly to this burden. The implementation of GST brought several fundamental changes that have reshaped the retail landscape. The input tax credit mechanism allowed businesses to claim credit for taxes paid on purchases, reducing the overall tax burden and improving cash flow management. The removal of check posts and entry taxes at state borders accelerated logistics operations significantly. Perhaps most importantly, the standardized tax rates across states created a level playing field for businesses of all sizes, eliminating the competitive distortions that had characterized the previous regime. These changes have had far-reaching implications for how retail businesses operate, compete, and grow in India. This research focuses on understanding how these changes have manifested in the business performance of Amazon India and Reliance Retail. By analyzing revenue growth, tax contributions, and market expansion patterns from 2017 through 2026, we aim to quantify the impact of GST reform on these retail giants and, by extension, on India's broader retail sector. The comparative approach allows us to examine how different retail models - e-commerce versus traditional brick-and-mortar - have adapted to and benefited from the unified tax structure. The findings of this study contribute to the growing body of knowledge on tax reform and its economic impacts.

Key words: GST, E-commerce, Retail Sector, Amazon India, Reliance Retail, Tax Reform, Input Tax Credit, Logistics Efficiency, Market Formalization. Supply Chain Optimization, Organized Retail, Revenue Growth, GST Collection, Compliance, Digital Commerce, Consumer Welfare, Economic Reform.