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A wait of a decade came to an end when on August
3, 2016, the GST Bill was passed by the Upper
House of the Parliament of India. This bill marks
an important historical event as it is said to be
one of the biggest tax reforms to have been
introduced in India since independence. GST is
expected to bring into existence the one nation
one tax system. Depending on the type of
industry concerned, GST is expected to have
different effects. This article provides an
overview on the impact that GST projects on
various industries. Whether the industry belongs
to the manufacturing, distributing, retailing, or
service sector will define the first level of
differentiation. Lets look at them one by
one. Impact of GST on Manufacturers, Distributor
and Retailers GST is expected to introduce a
boost in the competitiveness and performance of
the manufacturing sector in our country. And with
the Make in India campaign gaining momentum, this
sector is going to flourish. The major concern
that this sector was facing are the multiple
indirect taxes. These taxes increase the
administrative costs for manufacturers and
distributors. But with GST in place, the
compliance burden is expected to ease which will
aid in the growth of this sector.
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Impact of GST on Service Providers  According to
data for March 2014, the country witnessed
12,76,861 service tax assesses. Out of these,
only the top 50 paid more than 50 of the tax
collected. The majority of the tax in the service
domain is borne by companies that operate in the
IT services, telecommunication, insurance,
business support, and banking and financial
sectors. These service-based businesses already
work in an unified market. This means that even
though they will witness some amount of ease in
compliance burden, there will not be much change
in the way they function even after the
implementation of GST. Sector-wise Impact
Analysis  eCommerce GST proposes a tax
collection at source (TCS) mechanism by law and
eCommerce companies are not too happy about it.
GST would indeed help this sector to grow but the
long term effects are still under
speculation. Pharma GST is expected to create
an organic market for generic drug makers and
will boost the medical tourism. Also, the sector
may witness a tax respite making healthcare
accessible by all.
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• Telecommunications Prices are expected to come
  down upon implementation of GST. There will be
  reduction in costs as GST will eliminate the
  requirement to set up state-specific entities.
• Agriculture This sector is the largest GDP
  contributor in India. GST will help to ease up
  transportation issues across state lines and help
  in the establishment of Indias first National
  Market for agricultural goods. The verdict is not
  out in the case of prices of agricultural goods.
• Automobiles Currently the automobile sector has
  multiple taxes such as excise, VAT, sales tax,
  road tax, motor vehicle tax, registration duty,
  etc. GST is expected to eliminate multiple taxes
  and just levy a single tax. The industry has a
  bright future!
• Startups Startups tend to expand to different
  cities after certain period of operation and
  earlier with each state having different VAT
  laws, the procedure was cumbersome. With GST, all
  these will be done with which would encourage
  more people to start their companies (startups).
• BFSI Financial services like fund based,
  fee-based, and insurance services are expected to
  witness major changes upon GST implementation.
  Considering the type and volume of services
  offered by banks and NBFC, GST compliance would
  be very difficult to implement, which demands
  that this sector is in for numerous changes. Till
  the GST is implemented in full fledged way across
  the country, we can just speculate the changes
  that is expected to bring into the economy of our
  nation. But we hope we were able to provide some
  kind of introduction through this article. Do let
  us know your thoughts in the comments.
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