Impact of Gst in Fmcg

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Figure6. Affected part of Logistics in GST …………………………………19

Figure7. Impact on price and distribution cost …..………………………….19

Figure8. Range of GST ……………………………………………………...20

EXECUTIVE SUMMARY

Goods and Services Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level. Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain.

The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain. GST is likely to improve tax collections and boost India's economic development by breaking tax barriers between States and integrating India through a uniform tax rate.

It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth. It will divide the tax burden equitably between manufacturing and services. In the GST system, both Central and State taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost. This will benefit individuals as prices are likely to come down. Lower prices will lead to more consumption, thereby helping companies.

India is planning to implement a dual GST system from April 2016. Under dual GST, a Central Goods and Services Tax (CGST) and a State Goods and Services Tax (SGST) will be levied on the taxable value of a transaction. All goods and services, barring a few exceptions, will be brought into the GST base. There will be no distinction between goods and services. The combined GST rate is being discussed by government. The rate is expected around 14-16 per cent. After the total GST rate is arrived at, the States and the Centre will decide on the CGST and SGST rates. Currently, services are taxed at 10 per cent and the combined charge indirect taxes on most goods is around 20 per cent.

The prices are expected to fall in the long term as dealers might pass on the benefits of the reduced tax to consumers. Some States fear that if the uniform tax rate is lower than their existing rates, it will hit their tax collection. The government believes that dual GST will lead to better revenue collection for States.

However, backward and less-developed States could see a fall in tax collections. GST could see better revenue collection for some States as the consumption of goods and services will rise. Alcohol, tobacco, petroleum products are likely to be out of the GST regime.

This research starts with the introduction to GST, followed by objectives of GST. After this, business and research problem is defined which is further continued by purpose and significance of study. A brief study about GST implementation and working in other countries (Canada and Australia) is done which helped researcher to understand how implementation of GST can be made successful. After this, methodology is written which includes research design which is exploratory in this case, dependent and independent variables, tools of data collection which are Literature review and Questionnaire in this case. After this, analysis and interpretation of results is done using Questionnaire and Z test. Risks and challenges associated with implementation of GST and Suggestions are written in the later part. After this, Major findings, Scope of further research and finally Bibliography are mentioned.

ABBREVIATIONS

ACCT

Assistant Commissioner of Commercial Taxes

Addl. CCT

Additional Commissioner of Commercial Taxes

ATO

Australia Taxation Office

BAS

Business Activity Statement

CBDT

Central Board of Direct Taxes

CBEC

Central Board of Excise and Customs

CBIT

Central Board of Indirect Taxes

CCT

Commissioner of Commercial Taxes

CENVAT

Central Value Added Tax

CGST

Central Goods and Services Tax

CRA

Canada Revenue Agency

CST

Central Sales Tax

CTD

Commercial Taxes Department

CTO

Commercial Taxes Officer

DCCT

Deputy Commissioner of Commercial Taxes

EC

Empowered Committee

GOI

Government of India

GST

Goods and Services Tax

GSTSAO

GST Start-Up Assistance Office

HST

Harmonised Sales Tax

IGST

Integrated Goods and Services Tax

ITD

Income Tax Department

JCCT

Joint Commissioner of Commercial Taxes

KUAS

Knowledge, Understanding, Application