GST Impact on Business in India

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GST Impact on Business Sector of India
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Factor of GST Importance on Business Sector

• GST necessitate a marked shift from origin-based
  taxation to a destination-based tax structure,
  affecting the several facets of business such as
  profitability, cash flow, sourcing, pricing,
  supply chain systems.
• The advance planning before the transition of GST
  regime in reality is that it provides the best
  opportunity for organizations to assess and
  reconstruct business models across their value
  chain to gain a competitive edge over their
  competition.?

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Small and Medium Enterprises

• In a developing country such as India, SMEs are
  the base of the economy as it provides a
  significant contribution to GDP.
• GST will also impress the SME sector in both
  ways, currently, there are several turnover slabs
  for mandatory like VAT registrations and such
  businesses has to follow different provisions of
  laws by the respective state government.
• In current VAT system, there is several cost
  factors depending on the nature of the product
  but there will be only one price for all, so no
  different prices for luxury items or normal goods
  of basic need.

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Real Estate

• GST determines a unified tax rate in India. In
  Current Taxation regime there are several types
  of taxes need to be paid for infrastructure i.e.
  Service Tax on works contract services, VAT/CST
  on component, Stamp duty on transfer of property
  etc.
• All these adds extra burden up to 20-25 percent
  in the cost of building(based on state wise tax
  structure) but the GST is a unified tax having
  one rate of tax which is proposed 18. So in GST
  regime buyer need to pay some taxes in comparison
  to existing tax burden.

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Automobiles

• It is a positive sign for the automobile sector,
  GST will bring drop in the prices of the
  automobiles as in current synopsis, a person has
  to pay 26 taxes to purchase a vehicle with the
  cost so after GST the vehicle will be available
  at a lower rate.
• There will be around 8 drop in the on-road price
  of the vehicle.

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FMCG(Fast Moving Consumer Goods)

• As the GST will subsume all other taxes levied on
  the consumable goods, which in turn will result
  in the availability of goods at a cheaper price
  to the consumer.
• It will increase the buying power and with the
  increment in consumption of such short life
  goods, our GDP will be affected positively.
• It will provide the cost advantages direct to
  consumer.

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Service Sector

• Currently, the service tax on running services
  are levied by 15 (including Cesses) on the Gross
  Amount but after GST implementation a service
  provider need to pay service tax at the rate of
  18 (as proposed).
• So due to the higher rate of GST, the services
  will be costly.
• If the rate supposed to be 18 a service receiver
  has to pay 3 more on the cost of services
  received.
• To be continued

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• Here GST will affect the IT-sector,
  Telecommunication Sector, Banking and Financial
  Sector etc.
• There are various businesses other than mentioned
  above will be affected by the GST like
  E-commerce, Import-Export, Pharmaceuticals,
  Logistics, Textile, Manufacturing etc.
• Read More _at_ gst-impact-on-businesses-india

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