GST - Low-Cost Version - Portfolio
GST is the biggest tax reform in decades. Currently indirect tax regime in India has different types of taxes like service, excise, VAT, entertainment, octroi etc. levied by central, state and local authorities. Proposed GST (Goods and Service tax) will subsume different types of indirect taxes and there will be one single tax rates on all transactions.
There are 3 main channels through which GST is expected to benefit certain sectors:
There are 3 main channels through which GST is expected to benefit certain sectors:
- Lowering of Effective tax rate: Sectors where current tax burden is very high and is expected to come down under GST
- Benefits to organized players in large unorganized sectors: Organized players are expected to gain market share in the sectors with presence of large unorganized segment. This is because under GST, small unorganized players will not enjoy exemption benefits levelling the playing field between large and small players.
- Cost savings on logistics and transportation operations: Under GST all different types of state taxes will be eliminated resulting in seamless movement of goods across various states. This will reduce various checkpoints on state borders and number of warehouses, resulting in lower transportation and labour cost. This is a low-cost version - without high-priced stocks.
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