The Goods and Services Tax (GST) implementation in India has been fraught with various challenges, impacting the economy in the short and long run. Some of the major challenges include:

• Complexity: GST laws are complex and require significant effort from businesses to comply with the regulations. This has resulted in an increased compliance cost for small and medium enterprises (SMEs) and has led to some of them exiting the market.
• Technology infrastructure: The GST portal, which is required to file returns, has been plagued with technical glitches. This has resulted in businesses failing to file timely returns even when they want to do so, which has led to penalties and further administrative burden.
• Transition issues: Transition to the GST regime from the earlier tax laws has been a challenge, with confusion around tax rates, classifications, and refunds. This led to a short-term disruption in the market.
• Low compliance: Despite GST being implemented to curb tax evasion, many businesses have continued to evade taxes by under-reporting and have resulted in lower than expected revenue for the government.
• Inefficient revenue distribution between states: Some states have seen higher revenue growth than others, leading to an increasing disparity between them. The GST Council has been trying to address this by adjusting the rates regularly, but this has led to frequent changes and uncertainty in the market.

In the short run, the implementation of GST has led to a disruption in the market, with businesses reducing their activity levels. In the long term, GST is anticipated to boost GDP growth by streamlining the tax system, reducing documentation and making the tax regime more transparent. Nonetheless, its impact remains dependent on resolving the challenges above.