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- 1. An Outward show on G S T A game changer- for the Indian Economy Dr.Krishna Gadasandula Assoc.Prof. –ICBM_SBE- What’s Up-9866349726. HYD 7/14/2017Dr.G.Krishna - ICBM-SBE- krishna@icbm.ac.in
- 2. Outline: How GST impacts Auto, Real estate, Telecom and Retail (FMCG)sectors and Family Budget A Pre and Post GST analysis Dr.G.Krishna 7/14/2017Dr.G.Krishna
- 3. GST: A game changer for the Indian Economy Intro: The Goods and Services Tax (GST) has been termed a potential game changer. The single biggest tax reform in independent India, Founded on the concept of “One nation, One market, One tax”. 7/14/2017Dr.G.Krishna
- 4. Newly Implemented Indirect Tax (GST) Most ambitious tax regime in India and also the latest indirect tax introduced in the Indian constitution. The scheme has been introduced to make a shift in the Indian economy as to reduce the cascading effects of the tax duties making an overall inflation in the market. 7/14/2017Dr.G.Krishna
- 5. The idea of Implementing GST in India came in 1986-87 but didn’t work Again Vajpayee (NDA) Government initiated by forming kelkar committee in the Year 2000. It took 17 years to get Processed and Implemented (2000-2017) All States(29) and UT’s(7) in India are implementing GST There are 160 countries which are implementing GST in the world France is the First Country which is implemented GST in the year 1954 7/14/2017Dr.G.Krishna
- 7. G. Newly Implemented Indirect Tax (GST) There are various forms of GST which have been introduced namely: SGST (State GST) – The SGST will be handled by the state government in which all the taxes collected under the state provision will come under the SGST CGST (Centre GST) – CGST is a central GST which will be collected by the central government on account of every transaction having an interstate For e.g.: – Rajesh, a dealer in Maharashtra sold goods to Anand in Maharashtra worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%, in such case the dealer collects Rs. 1800 and Rs. 900 will go to the central government and Rs. 900 will go to the Maharashtra government. 7/14/2017Dr.G.Krishna
- 8. G. Newly Implemented Indirect Tax (GST) There are various forms of GST which have been introduced namely: IGST (Integrated GST) – Integrated GST will be charged whenever a transaction occurs between two states with a share of state and centre both with a specified proportion decided. Now, if Rajesh in Maharashtra had sold goods to Anand in Gujarat worth Rs. 1,00,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. In such case the dealer has to charge Rs. 18,000 as IGST. This IGST will go to the Centre. 7/14/2017Dr.G.Krishna
- 9. How the GST rates—from 5% to 28%—will affect various consumer- facing sectors of the Indian Economy. A look at some of these sectors and how GST will impact them: 7/14/2017Dr.G.Krishna
- 10. AUTOMOBILE: (Four Wheeler) The passenger car segment is expected to see an overall reduction in tax outgo, with bigger cars and sport utility vehicles (SUV) benefiting from lower tax rates. Segment Pre GST Excise,VAT,ST,RT ,MVT Post GST Tax on small cars(Less than 4 meters 31.4% 29% Medium( above 4 mtrs and less than 1500 CC 46.6 31 Medium( above 4 mtrs and above 1500 CC 51.8 43 SUV 55.3% 43% Commercial 30% 28% 7/14/2017Dr.G.Krishna
- 11. AUTOMOBILE: (Two Wheeler) The passenger car segment is expected to see an overall reduction in tax outgo, with bigger cars and sport utility vehicles (SUV) benefiting from lower tax rates. Segment ( Two Wheeler) Pre GST Excise,VAT,ST,RT ,MVT Post GST Below 350 cc 30.2 28% Above 350 CC 30.2 31 Segment Pre GST Excise,VAT,ST,R T,MVT Post GST Rubber Tyres 18.5 28 7/14/2017Dr.G.Krishna
- 12. CEMENT: Cement makers will see some relief in tax payout as the sector has been categorized in the 28% slab as against the effective tax rate of 29-31%. Segment Pre GST Post GST Cement 29-31% 28% 7/14/2017Dr.G.Krishna
- 13. CONSUMER GOODS : Overall GST impact on consumer goods is seen as neutral as rates have been cut on mass consumption items and hiked on higher-end products. Segment Pre GST Post GST 81% of the items 22-24% 18% 19% of the items 18% 28% Biscuits and Chocolates 32-33 18 Beauty Items (Face creams, Makeup kit, Hair colors . 26 28 7/14/2017Dr.G.Krishna
- 14. CONSUMER GOODS : FMCG Daily consumer Goods Pre GST (%) Post GST (%) Veg tables which are stored 0 18 Ghee and cheese 6 12 Dry Fruits 6 12 Jam and jellies 12 18 Frozen Meet 6 12 Branded pannier 0 5 Razors 26 28 Tooth pastes 26 28 Salt 0 9 Corn flex, cakes 19 18 Soya been, Ground nut, and sunflower seeds 6 5 Coffee and Tea 6 5 Soaps 26 18 Tooth powder 26 12 LED bulbs 26 12 Brooms 18 5 Hair Oil 26 18 7/14/2017Dr.G.Krishna
- 15. Services Services Pre GST (%) Post GST ((%) Telecom 15 18 Work Contracts 15 12 Non A/C, Restaurants without liquor 13-14 12 A/C, Restaurants with liquor 22 18 Five star Restaurants 18 22 7/14/2017Dr.G.Krishna
- 16. Other GST Rates Credit Card Services -- Pre GST=15%, Post GST=18% Cell phone --- Pre GST=6%, Post GST=18% Ready made Cloths = 5 % more now Automobile services= Pre GST=27%, Post GST=28% Life, Health , Term policies = Pre GST=15%, Post GST=18% Cell Phone and Net Bills = Pre GST=15%, Post GST=18% Movie tickets cost –In Telugu states = Pre GST=13.5%, Post GST=28% 7/14/2017Dr.G.Krishna
- 17. 7/14/2017Dr.G.Krishna Monthly Family Budget –Before and After GST- ( Expenditure for Four members family ) Goods Expense (Before GST) RS. After GST (Decreasing ) RS. After GST (Increasing ) RS. Soaps (8) 40 each 320 28 -- Tooth paste (2) 100 each 200 18 -- Shampoo bottle(1) 400 -- 4 Detergent soaps (10) 20 each 200 -- 2 Washing powder(2kg) 185 each 370 -- 3.70 Atta (Wheat powder)(5kg) 32 kg 160 8 -- Bombai Ravva(3kg) 105 5.25 -- Idly Ravva(3kg) 35 kg 90 4.50 -- Oil –veg(3 kg )ltr 95 each 285 17.10 Sugar(1.5kg) 43 kg 65 4.55 -- Rice(30 kgs) 50 per kg 1500 75 -- Urad Dal, Black Dal (Minapa Pappu )(2kg) 170 8.50 -- Red Gram, Tur Dal (Kandi pappu )(1kg) 100 5 -- Channa Dal (సెనగ పప్పు)(1 KG) 80 4 -- Moong Dal (పెసర పప్పు) (1 KG) 90 4.5 -- Peanut, Ground Nut (వేరు సెనగ)(1 KG) 120 5.40 -- Telephone Bill 1000 -- 30 Internet Bill 500 -- 15 Cable TV Bill 300 -- 9 Movie ticket(1month) 480 -- 69 Total 6535 187.80 132.70 Monthly Saving monthly =55.10 (187.80-132.70)
- 18. Taxes (GST) in other Countries Country Taxes (GST) % Brazil 4-25(Only VAT no GST) Britain and France (1954 first country) 20 (GST) India and Russia 18 ( 81% of the items in India)-28% China 17 (More VAT Less GST) Mexico 16 South Africa 14 Australia (2000) 10 (GST) Japan(1989) and Switzerland 8 (GST) Thailand 7 (GST) Malaysia (26 years struggle(2015) 6 (GST) Canada (1991) 5 (GST) USA No GST (states have authority) 7/14/2017Dr.G.Krishna
- 19. Share of Taxes (Contribution) in GDP Country Taxes (GST) % Brazil 35 USA 35 China 19 Russia 19.5 India 16(Expecting 20% post GST) 7/14/2017Dr.G.Krishna
- 20. Advantages of GST in India • One Tax allover India instead of imposing 17 types of indirect taxes • Income get increases as it will eliminate tax evasion • One market allover India as it will eliminate tax differences among the states • Transportation becomes easy ( One truck avg daily journey in US 800 km. where as India 280 km per day ) • ( One truck is taking 35 hours to trasport goods from Delhi to Mumbai out of that 15 hours are spending only at tollgates and boarders check points to bargain charges.) • GDP growth rate is expecting to increase between 0.9-1.2 7/14/2017Dr.G.Krishna
- 21. Limitations of GST in India • Many countries are following Single tax rate but in India there are Four Tax slabs (5,12,18,28)- it leads to confusion and hard for the investors. • Highest tax slab (28% ) in India, no other GST country has this much high. • Lack technicians to file tax returns with GST for every three months 7/14/2017Dr.G.Krishna
- 22. Thank U Thank you Be Good Do Good Dr.Krishna Gadasandula Assoc.Prof. –ICBM_SBE- What’s Up-9866349726 7/14/2017Dr.G.Krishna