SlideShare a Scribd company logo
Equentis Wealth Advisory Services (P) Ltd
Registered Office:
712, Raheja Chambers, Nariman Point,
Mumbai – 400021 India
Tel: +91 22 61013800
Email: info@researchandranking.com
Event Update
The Goods and Services Tax (GST)
Independent Equity Research
August - 2016
2
“………………..but I have promises to keep, And miles to go before I sleep”
Robert Frost
AN UPDATE ON ONE OF INDIA’S MOST REVOLUTIONARY ECONOMIC REFORMS: GST
Q: What is the Goods and Services Tax (GST)?
A:
The GST is a comprehensive nationwide indirect tax on manufacture, sale and consumption of goods and services. The
aim is to make India a unified common market. GST will be levied and collected at each stage of sale or purchase of
goods or services.
Through an input tax credit mechanism, this tax will be collected on value-addition on transactions involving both goods
and services, at each stage of sale or purchase in the entire supply chain. This 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 ultimately bears this tax being the last person in the whole supply chain.
The ultimate objective is to widen tax base of the country followed by reduction in tax rates leading to lower cost to
consumers.
The Government aims to implement GST from April, 2017.
Q: What are objectives of GST?
A: Some of the primary objectives of GST-based taxation are:
Ensuring availability of input credit across the value chain
Minimizing cascading effect of taxation
Simplification of tax administration and compliance
Harmonization of tax base, laws, and administration procedures across the country
Minimizing tax rate slabs to avoid classification issues
Prevention of unhealthy competition among states
Increasing the tax base and raising compliance
Q: What are the GST implication challenges?
A:
• Lack of Adaptation
• Trained staff
• Double registration can increase compliances and cost
• Lack of clear mechanism to control tax evasion
• Hard to estimate the exact impact of GST
Q: Which taxes will be subsumed into the GST?
A:
At the Central Level:
o Central Excise Duty
o Additional Excise Duty
o Service Tax
o Countervailing Duty
o Special additional duty of customs
o Central Surcharges and Cesses so far as they relate to the supply of goods and services.
At the State Level:
o Value-added tax / Sales tax
o Entertainment tax
o Octroi and entry tax
o Purchase tax
o Luxury tax
o Taxes on lottery, betting and gambling
3
Q: What are the areas that are not covered under purview of GST?
A:
• All Petroleum products (a number of states have voiced concerns)
• Tax on entertainment and amusement levied and collected by Panchayat /Municipality/District Council
• Tax on alcoholic liquor for human consumption
• Stamp duty, Customs duty
• Taxes on consumption or sale of electricity
Q: What is the expected GST structure to be implemented in India?
A:
GST will be a dual rate structure under which both the Union and State governments will be empowered to levy and administer
taxes concurrently on a uniform base of goods and services.
CGST: The Centre would levy and collect CGST on all transactions within a state.
SGST: The States would levy and collect SGST on all transactions within a state, to be levied by the states.
IGST: The Centre would levy and collect IGST on all inter-state transactions. Rate of IGST will be approximately equal
to sum of CGST and SGST.
Q: Illustration – pre-GST and post-GST
A:
Pre-GST Scenario
Current Scenario (Rs.) Manufacturer Distribution Retailer Price to Consumer
Cost of Production 100 172 216
Value add 50 20 30
Total 150 192 246
Excise @ 12.5% 19 - -
TOTAL 169 192 246 253
CST @ 2% 3 - -
VAT @ 12.5% 0 24 31
VAT Set off (0) -
(24)
TOTAL 172 216 253
Source: Edelweiss Research
Post-GST Scenario
Current Scenario (Rs.) Manufacturer Distribution Retailer Price to Consumer
Cost of Production 100 180 210
Value add 50 20 30
Total 150 200 240 248
GST @ 20% 30 40 48
GST Set off - (30) (40)
TOTAL 180 210 248
Source: Edelweiss Research
Q: What are the expected benefits of GST?
A:
GST will result in lower tax incidence for manufacturers in organized sector, with a harmonized tax structure, unified tax
base and common rules and administrative procedures coming into effect across the nation. It will also result in widening
of the tax base to include a comprehensive list of goods and services. This will bring in transparency and encourage
investments in the organized sector, helping the economy gain growth momentum.
Specified consumer
price is of inter-
state, if goods are
moving in the same
state then price to
end consumer is
going to reduce by
Rs. 3, which is equal
to CST paid by
Manufacturer.
4
GST will subsume large number of taxes imposed by the central and state governments. Full credit of input tax will be
available which will avoid double taxation, currently prevalent in some sectors. This will lower effective tax rates for
multiple sectors.
Logistics and inventory carrying costs will decline. Currently, companies put additional set ups like depots and C&F
agents in different states to bypass CST. With GST coming into force, these companies can have centralized warehouses
and avoid additional costs.
Logistics costs and transit time will also reduce going forward. Currently, considerable time is wasted by trucks at the
state border check-points due to the various sales and entry tax requirements of the different states.
Shift of business from unorganized to organized players as tax advantages currently enjoyed by the unorganized players
will diminish and market share of the organized players may potentially increase.
As per various estimates, the implementation of GST is expected to boost GDP growth by ~2% over next 2 – 3 years.
Q: Will inflation increase after GST?
A:
Impact of GST on inflation will be dependent upon the GST rate and its comprehensiveness. It is widely believed that
under the proposed GST, effective tax rate on goods (~70-75% of the CPI basket) will decline.
Services-oriented components constitute ~25-30% of the CPI basket with high weights on housing, transport and
communication, etc.
Currently, service tax is not imposed on certain (~12% of the CPI basket) services and these services are also expected to
be exempt under GST regime. Thus, hike in tax rate on services is unlikely to have any material direct impact on CPI.
A significant proportion (~35-40%) of goods (mainly agro products) included in the CPI basket is not subject to tax
currently and we expect this status will continue in future also. Thus, transition to GST will not have a significant impact
on inflation.
Q: What would be the sector-wise impact of GST?
A:
Sector
Impact of Tax
Rate
Inventory
Management
Logistics
For organized
Players
Overall
Impact
Cement
Consumer Durables
FMCG
Pharmaceuticals
Automobiles
Capital Goods
IT/ITes
Media
BFSI
Textile
Building / Home
Materials
Telecommunications
Metals
Multiplex
Source: Edelweiss Research
Color Code: Green – Positive, Red – Negative, Yellow -- Neutral
5
DISCLAIMER
Equentis Wealth Advisory Services Private Limited (EWASPL) is registered under the SEBI (Investment Advisers) Regulations,
2013.
“Research & Ranking” is the brand under which the Research Division of EWASPL render’s its Research Services.
General Disclaimers: This Research Report (hereinafter called ‘Report’) is prepared and distributed by EWASPL for information
purposes only. The recommendations, if any, made herein are expression of views and/or opinions and should not be deemed or
construed to be neither advice for the purpose of purchase or sale of any security, derivatives or any other security through
EWASPL nor any solicitation or offering of any investment /trading opportunity on behalf of the issuer(s) of the respective
security(ies) referred to herein. These information / opinions / views are not meant to serve as a professional investment guide
for the readers. No action is solicited based upon the information provided herein. Recipients of this Report should rely on
information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive
at an informed trading/investment decision before executing any trades or making any investments. This Report has been
prepared on the basis of publicly available information, internally developed data and other sources believed by EWASPL to be
reliable. EWASPL or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the
accuracy, completeness, adequacy and reliability of such information / opinions / views. While due care has been taken to ensure
that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of
EWASPL shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost
profits arising in any way whatsoever from the information / opinions / views contained in this Report.
Risks: Trading and investment in securities are subject to market risks. There are no assurances or guarantees that the
objectives of any of trading / investment in securities will be achieved. The trades/ investments referred to herein may not be
suitable to all categories of traders/investors. The names of securities mentioned herein do not in any manner indicate their
prospects or returns. The value of securities referred to herein may be adversely affected by the performance or otherwise of the
respective issuer companies, changes in the market conditions, micro and macro factors and forces affecting capital markets like
interest rate risk, credit risk, liquidity risk and reinvestment risk. Derivative products may also be affected by various risks
including but not limited to counter party risk, market risk, valuation risk, liquidity risk and other risks. Besides the price of the
underlying asset, volatility, tenor and interest rates may affect the pricing of derivatives.
Disclaimers in respect of jurisdiction: The possession, circulation and/or distribution of this Report may be restricted or
regulated in certain jurisdictions by appropriate laws. No action has been or will be taken by EWASPL in any jurisdiction (other
than India), where any action for such purpose(s) is required. Accordingly, this Report shall not be possessed, circulated and/or
distributed in any such country or jurisdiction unless such action is in compliance with all applicable laws and regulations of such
country or jurisdiction. EWASPL requires such recipient to inform himself about and to observe any restrictions at his own
expense, without any liability to EWASPL. Any dispute arising out of this Report shall be subject to the exclusive jurisdiction of the
Courts in Mumbai (India).
Disclosure of Interest: The Research Analyst(s) who have prepared this Report hereby certify that the views /opinions
expressed in this Report are their personal independent views/opinions in respect of the securities and their respective issuers.
None of EWASPL, Research Analyst(s), or their relatives had any known direct /indirect material conflict of interest including any
long/short position(s) in any specific security on which views/opinions have been made in this Report, during its preparation.
EWASPL, the Research Analyst(s), or their relatives do not have financial interest in the issuer company(ies) of the said securities
nor have ownership of 1% or more individually or jointly till the date of this Report. EWASPL, the Research Analyst(s), or their
relatives have not received any compensation or other benefits from the said issuer company(ies) in last 12 months in any
respect whatsoever.
Copyright: The copyright in this Report belongs exclusively to EWASPL. This Report shall only be read by those persons to whom
it has been delivered. No reprinting, reproduction, copying, distribution of this Report in any manner whatsoever, in whole or in
part, is permitted without the prior express written consent of EWASPL.
EWASPL’s activities were never suspended by SEBI or any other authority. Further, there does not exist any material adverse
order/judgments/strictures assessed by any regulatory, government or public authority or agency or any law enforcing agency in
last three years. Further, there does not exist any material enquiry of whatsoever nature instituted or pending against EWASPL as
on the date of this Report.
Important These disclaimers, risks and other disclosures must be read in conjunction with the information / opinions / views of
which they form part of.
CIN: U74999MH2015PTC262812; SEBI Registration No.:INA000003874

More Related Content

What's hot

Gst for Indian startups and e-commerce By Registrationwala
Gst for Indian startups and e-commerce By RegistrationwalaGst for Indian startups and e-commerce By Registrationwala
Gst for Indian startups and e-commerce By Registrationwala
mehak chhabra
 
Gst short-prsn-24032017-revised1
Gst short-prsn-24032017-revised1Gst short-prsn-24032017-revised1
Gst short-prsn-24032017-revised1
Kalpana Patel
 
GST
GSTGST
Gst amar
Gst amarGst amar
Gst amar
AmarShaw5
 
Goods and Services Tax (GST)
Goods and Services Tax (GST)Goods and Services Tax (GST)
Goods and Services Tax (GST)
Supriya Mahajan
 
Presentation on gst impact and effect
Presentation on gst impact and effectPresentation on gst impact and effect
Presentation on gst impact and effect
sandesh mundra
 
Part 9- GST - Areas of Business Impacted (1)
Part 9- GST - Areas of Business Impacted (1)Part 9- GST - Areas of Business Impacted (1)
Part 9- GST - Areas of Business Impacted (1)
Hina juyal
 
1 news0107042017
1 news01070420171 news0107042017
1 news0107042017
PSPCL
 
Report on Impacts of GST and Infrastructure Preparedness of SCL.
Report on Impacts of GST and Infrastructure Preparedness of SCL.Report on Impacts of GST and Infrastructure Preparedness of SCL.
Report on Impacts of GST and Infrastructure Preparedness of SCL.
Srinikith Raparthi
 
IMPLEMENTATION OF GST IN INDIA - 2
IMPLEMENTATION OF GST IN INDIA - 2 IMPLEMENTATION OF GST IN INDIA - 2
IMPLEMENTATION OF GST IN INDIA - 2
Sowjanya Sampathkumar
 
Eco GST & Effect on Indian Economy
Eco  GST &Effect on Indian Economy Eco  GST &Effect on Indian Economy
Eco GST & Effect on Indian Economy
Lalit Chaudhary
 
Gst And its Impacts Project
Gst And its Impacts ProjectGst And its Impacts Project
Gst And its Impacts Project
bharath kesav
 
A Guide to GST India
A Guide to GST IndiaA Guide to GST India
A Guide to GST India
Enterslice Media
 
Gst in india
Gst in indiaGst in india
Gst in india
Minions Gru
 
GST INDIA
GST INDIA GST INDIA
GST INDIA
Swapnil Borekar
 
Gst – an overview
Gst – an overviewGst – an overview
Gst – an overview
Kalpana Udhaya
 
Gst an itroductory session
Gst   an itroductory sessionGst   an itroductory session
Gst an itroductory session
CA UDIT AGRAWAL
 
CURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRY
CURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRYCURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRY
CURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRY
sandeep kumar
 
GST PPT presentaion
GST PPT presentaionGST PPT presentaion
GST PPT presentaion
Nikhil Singh
 
Goods & Service Tax (GST)
Goods & Service Tax (GST)Goods & Service Tax (GST)
Goods & Service Tax (GST)
Raman Singla
 

What's hot (20)

Gst for Indian startups and e-commerce By Registrationwala
Gst for Indian startups and e-commerce By RegistrationwalaGst for Indian startups and e-commerce By Registrationwala
Gst for Indian startups and e-commerce By Registrationwala
 
Gst short-prsn-24032017-revised1
Gst short-prsn-24032017-revised1Gst short-prsn-24032017-revised1
Gst short-prsn-24032017-revised1
 
GST
GSTGST
GST
 
Gst amar
Gst amarGst amar
Gst amar
 
Goods and Services Tax (GST)
Goods and Services Tax (GST)Goods and Services Tax (GST)
Goods and Services Tax (GST)
 
Presentation on gst impact and effect
Presentation on gst impact and effectPresentation on gst impact and effect
Presentation on gst impact and effect
 
Part 9- GST - Areas of Business Impacted (1)
Part 9- GST - Areas of Business Impacted (1)Part 9- GST - Areas of Business Impacted (1)
Part 9- GST - Areas of Business Impacted (1)
 
1 news0107042017
1 news01070420171 news0107042017
1 news0107042017
 
Report on Impacts of GST and Infrastructure Preparedness of SCL.
Report on Impacts of GST and Infrastructure Preparedness of SCL.Report on Impacts of GST and Infrastructure Preparedness of SCL.
Report on Impacts of GST and Infrastructure Preparedness of SCL.
 
IMPLEMENTATION OF GST IN INDIA - 2
IMPLEMENTATION OF GST IN INDIA - 2 IMPLEMENTATION OF GST IN INDIA - 2
IMPLEMENTATION OF GST IN INDIA - 2
 
Eco GST & Effect on Indian Economy
Eco  GST &Effect on Indian Economy Eco  GST &Effect on Indian Economy
Eco GST & Effect on Indian Economy
 
Gst And its Impacts Project
Gst And its Impacts ProjectGst And its Impacts Project
Gst And its Impacts Project
 
A Guide to GST India
A Guide to GST IndiaA Guide to GST India
A Guide to GST India
 
Gst in india
Gst in indiaGst in india
Gst in india
 
GST INDIA
GST INDIA GST INDIA
GST INDIA
 
Gst – an overview
Gst – an overviewGst – an overview
Gst – an overview
 
Gst an itroductory session
Gst   an itroductory sessionGst   an itroductory session
Gst an itroductory session
 
CURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRY
CURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRYCURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRY
CURRENT TAXATION AND GST IN INDIA: IMPACTS ON HOSPITALITY AND TOURISM INDUSTRY
 
GST PPT presentaion
GST PPT presentaionGST PPT presentaion
GST PPT presentaion
 
Goods & Service Tax (GST)
Goods & Service Tax (GST)Goods & Service Tax (GST)
Goods & Service Tax (GST)
 

Viewers also liked

GST Power Point Presentation
GST Power Point PresentationGST Power Point Presentation
GST Power Point Presentation
praveendel
 
Gst presentation
Gst presentationGst presentation
Gst presentation
Agarwal sanjiv & Co
 
Gst ppt
Gst pptGst ppt
Gst ppt
Hirak Parmar
 
Tax Rates Research Paper
Tax Rates Research PaperTax Rates Research Paper
Tax Rates Research Paper
Gor Sargsyan
 
By narendra pati gst joint committe report
By narendra pati gst  joint committe reportBy narendra pati gst  joint committe report
By narendra pati gst joint committe report
Narendra Pati
 
One china policy
One china policyOne china policy
One china policy
Ashish Kumar Gouda
 
Discussion Paper on GST (11.11.2009)
Discussion Paper on GST (11.11.2009)Discussion Paper on GST (11.11.2009)
Discussion Paper on GST (11.11.2009)
badrinathataccretive
 
Gst
GstGst
Shruti GOODS AND SERVICE TAX
Shruti GOODS AND SERVICE TAXShruti GOODS AND SERVICE TAX
Shruti GOODS AND SERVICE TAX
Shruti Agrawal
 
International Taxation - Tax Research Paper
International Taxation - Tax Research PaperInternational Taxation - Tax Research Paper
International Taxation - Tax Research Paper
Kesha Haley
 
Ayton. Jacquelynn GST 6320 Final Research Paper
Ayton. Jacquelynn GST 6320 Final Research PaperAyton. Jacquelynn GST 6320 Final Research Paper
Ayton. Jacquelynn GST 6320 Final Research Paper
Jacquelynn Ayton
 
Transforming india into the superpower
Transforming india into the superpowerTransforming india into the superpower
Transforming india into the superpower
Kushal Patil
 
Summer Internship Project Report on Comparative Analysis of Investment Option...
Summer Internship Project Report on Comparative Analysis of Investment Option...Summer Internship Project Report on Comparative Analysis of Investment Option...
Summer Internship Project Report on Comparative Analysis of Investment Option...
Prakhar Srivastava
 
An overview of Goods and Services tax in India
An overview of Goods and Services tax in IndiaAn overview of Goods and Services tax in India
An overview of Goods and Services tax in India
Kushal Setty
 
GST INDIA
GST INDIAGST INDIA
GST INDIA
Rohit Saxena
 
GST
GSTGST
TEDx Manchester: AI & The Future of Work
TEDx Manchester: AI & The Future of WorkTEDx Manchester: AI & The Future of Work
TEDx Manchester: AI & The Future of Work
Volker Hirsch
 

Viewers also liked (17)

GST Power Point Presentation
GST Power Point PresentationGST Power Point Presentation
GST Power Point Presentation
 
Gst presentation
Gst presentationGst presentation
Gst presentation
 
Gst ppt
Gst pptGst ppt
Gst ppt
 
Tax Rates Research Paper
Tax Rates Research PaperTax Rates Research Paper
Tax Rates Research Paper
 
By narendra pati gst joint committe report
By narendra pati gst  joint committe reportBy narendra pati gst  joint committe report
By narendra pati gst joint committe report
 
One china policy
One china policyOne china policy
One china policy
 
Discussion Paper on GST (11.11.2009)
Discussion Paper on GST (11.11.2009)Discussion Paper on GST (11.11.2009)
Discussion Paper on GST (11.11.2009)
 
Gst
GstGst
Gst
 
Shruti GOODS AND SERVICE TAX
Shruti GOODS AND SERVICE TAXShruti GOODS AND SERVICE TAX
Shruti GOODS AND SERVICE TAX
 
International Taxation - Tax Research Paper
International Taxation - Tax Research PaperInternational Taxation - Tax Research Paper
International Taxation - Tax Research Paper
 
Ayton. Jacquelynn GST 6320 Final Research Paper
Ayton. Jacquelynn GST 6320 Final Research PaperAyton. Jacquelynn GST 6320 Final Research Paper
Ayton. Jacquelynn GST 6320 Final Research Paper
 
Transforming india into the superpower
Transforming india into the superpowerTransforming india into the superpower
Transforming india into the superpower
 
Summer Internship Project Report on Comparative Analysis of Investment Option...
Summer Internship Project Report on Comparative Analysis of Investment Option...Summer Internship Project Report on Comparative Analysis of Investment Option...
Summer Internship Project Report on Comparative Analysis of Investment Option...
 
An overview of Goods and Services tax in India
An overview of Goods and Services tax in IndiaAn overview of Goods and Services tax in India
An overview of Goods and Services tax in India
 
GST INDIA
GST INDIAGST INDIA
GST INDIA
 
GST
GSTGST
GST
 
TEDx Manchester: AI & The Future of Work
TEDx Manchester: AI & The Future of WorkTEDx Manchester: AI & The Future of Work
TEDx Manchester: AI & The Future of Work
 

Similar to Report on GST - Equentis Research !!

impact of GST on trade and business development
impact of GST on trade and business development impact of GST on trade and business development
impact of GST on trade and business development
Prakash Kuma
 
Gst.ppt
Gst.pptGst.ppt
Gst.ppt
bunniee
 
Goods and service tax explained by Ravi Teja Reddy
Goods and service tax explained by Ravi Teja ReddyGoods and service tax explained by Ravi Teja Reddy
Goods and service tax explained by Ravi Teja Reddy
Ravi Teja Reddy Neelipally
 
Goods and services Tax in India.
Goods and services Tax in India.Goods and services Tax in India.
Goods and services Tax in India.
Varadraj Bapat
 
Effect of GST on Mutual Funds
Effect of GST on Mutual FundsEffect of GST on Mutual Funds
Effect of GST on Mutual Funds
Rohan Agarwal
 
Goods and service tax in india
Goods and service tax in indiaGoods and service tax in india
Goods and service tax in india
Dev Shrivastava
 
GST in India
GST in India GST in India
GST in India
Neeraj Sindhu
 
GST PRESENTATION
GST PRESENTATIONGST PRESENTATION
GST PRESENTATION
CA Gaurav Mishra
 
Gs tin india
Gs tin indiaGs tin india
Gs tin india
Rahish Ali
 
Impact of Goods and Services Tax (GST) to the Common Man
Impact of Goods and Services Tax (GST) to the Common ManImpact of Goods and Services Tax (GST) to the Common Man
Impact of Goods and Services Tax (GST) to the Common Man
tridentbull
 
GST in india
GST in indiaGST in india
GST in india
Megha Mishra
 
GST Booklet A5
GST Booklet A5GST Booklet A5
GST Booklet A5
Sidharth Jain
 
3310 pdf
3310 pdf3310 pdf
GSTShruti
GSTShrutiGSTShruti
GSTShruti
shrutiairan
 
goods and service tax overview
goods and service tax overviewgoods and service tax overview
goods and service tax overview
Shubham Gupta
 
Goods And Services Tax In India
Goods And Services Tax In IndiaGoods And Services Tax In India
Goods And Services Tax In India
Tanya Taneja
 
Gst sway on consumer
Gst sway on consumer Gst sway on consumer
Gst sway on consumer
sailaja dangeti
 
Gst tax-structure
Gst tax-structureGst tax-structure
Gst tax-structure
Shailesh Saraf
 
Gst and its implications
Gst and its implicationsGst and its implications
Gst and its implications
Subramanya Bhat
 
GST in india
GST in indiaGST in india
GST in india
Adv. Rashmi Baliyan
 

Similar to Report on GST - Equentis Research !! (20)

impact of GST on trade and business development
impact of GST on trade and business development impact of GST on trade and business development
impact of GST on trade and business development
 
Gst.ppt
Gst.pptGst.ppt
Gst.ppt
 
Goods and service tax explained by Ravi Teja Reddy
Goods and service tax explained by Ravi Teja ReddyGoods and service tax explained by Ravi Teja Reddy
Goods and service tax explained by Ravi Teja Reddy
 
Goods and services Tax in India.
Goods and services Tax in India.Goods and services Tax in India.
Goods and services Tax in India.
 
Effect of GST on Mutual Funds
Effect of GST on Mutual FundsEffect of GST on Mutual Funds
Effect of GST on Mutual Funds
 
Goods and service tax in india
Goods and service tax in indiaGoods and service tax in india
Goods and service tax in india
 
GST in India
GST in India GST in India
GST in India
 
GST PRESENTATION
GST PRESENTATIONGST PRESENTATION
GST PRESENTATION
 
Gs tin india
Gs tin indiaGs tin india
Gs tin india
 
Impact of Goods and Services Tax (GST) to the Common Man
Impact of Goods and Services Tax (GST) to the Common ManImpact of Goods and Services Tax (GST) to the Common Man
Impact of Goods and Services Tax (GST) to the Common Man
 
GST in india
GST in indiaGST in india
GST in india
 
GST Booklet A5
GST Booklet A5GST Booklet A5
GST Booklet A5
 
3310 pdf
3310 pdf3310 pdf
3310 pdf
 
GSTShruti
GSTShrutiGSTShruti
GSTShruti
 
goods and service tax overview
goods and service tax overviewgoods and service tax overview
goods and service tax overview
 
Goods And Services Tax In India
Goods And Services Tax In IndiaGoods And Services Tax In India
Goods And Services Tax In India
 
Gst sway on consumer
Gst sway on consumer Gst sway on consumer
Gst sway on consumer
 
Gst tax-structure
Gst tax-structureGst tax-structure
Gst tax-structure
 
Gst and its implications
Gst and its implicationsGst and its implications
Gst and its implications
 
GST in india
GST in indiaGST in india
GST in india
 

Recently uploaded

Initial Public Offering (IPO) Process.ppt
Initial Public Offering (IPO) Process.pptInitial Public Offering (IPO) Process.ppt
Initial Public Offering (IPO) Process.ppt
ribhi87
 
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptxBudgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Godwin Emmanuel Oyedokun MBA MSc PhD FCA FCTI FCNA CFE FFAR
 
The state of welfare Resolution Foundation Event
The state of welfare Resolution Foundation EventThe state of welfare Resolution Foundation Event
The state of welfare Resolution Foundation Event
ResolutionFoundation
 
South Dakota State University degree offer diploma Transcript
South Dakota State University degree offer diploma TranscriptSouth Dakota State University degree offer diploma Transcript
South Dakota State University degree offer diploma Transcript
ynfqplhm
 
Dr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment LeaderDr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment Leader
msthrill
 
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDADCONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
godiperoficial
 
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
vpqasyb
 
Economic Risk Factor Update: June 2024 [SlideShare]
Economic Risk Factor Update: June 2024 [SlideShare]Economic Risk Factor Update: June 2024 [SlideShare]
Economic Risk Factor Update: June 2024 [SlideShare]
Commonwealth
 
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
Neil Day
 
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
234knry
 
Discover the Future of Dogecoin with Our Comprehensive Guidance
Discover the Future of Dogecoin with Our Comprehensive GuidanceDiscover the Future of Dogecoin with Our Comprehensive Guidance
Discover the Future of Dogecoin with Our Comprehensive Guidance
36 Crypto
 
What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?
Newman Leech
 
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and NordhausChapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
iraangeles4
 
How to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete GuideHow to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete Guide
Daniel
 
一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理
一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理
一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理
asukqco
 
Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...
Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...
Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...
Suomen Pankki
 
一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查
一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查
一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查
taqyea
 
Accounting Information Systems (AIS).pptx
Accounting Information Systems (AIS).pptxAccounting Information Systems (AIS).pptx
Accounting Information Systems (AIS).pptx
TIZITAWMASRESHA
 
Discovering Delhi - India's Cultural Capital.pptx
Discovering Delhi - India's Cultural Capital.pptxDiscovering Delhi - India's Cultural Capital.pptx
Discovering Delhi - India's Cultural Capital.pptx
cosmo-soil
 
Money20/20 and EU Networking Event of 20/24!
Money20/20 and EU Networking Event of 20/24!Money20/20 and EU Networking Event of 20/24!
Money20/20 and EU Networking Event of 20/24!
FinTech Belgium
 

Recently uploaded (20)

Initial Public Offering (IPO) Process.ppt
Initial Public Offering (IPO) Process.pptInitial Public Offering (IPO) Process.ppt
Initial Public Offering (IPO) Process.ppt
 
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptxBudgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
 
The state of welfare Resolution Foundation Event
The state of welfare Resolution Foundation EventThe state of welfare Resolution Foundation Event
The state of welfare Resolution Foundation Event
 
South Dakota State University degree offer diploma Transcript
South Dakota State University degree offer diploma TranscriptSouth Dakota State University degree offer diploma Transcript
South Dakota State University degree offer diploma Transcript
 
Dr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment LeaderDr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment Leader
 
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDADCONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
 
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
 
Economic Risk Factor Update: June 2024 [SlideShare]
Economic Risk Factor Update: June 2024 [SlideShare]Economic Risk Factor Update: June 2024 [SlideShare]
Economic Risk Factor Update: June 2024 [SlideShare]
 
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
 
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
 
Discover the Future of Dogecoin with Our Comprehensive Guidance
Discover the Future of Dogecoin with Our Comprehensive GuidanceDiscover the Future of Dogecoin with Our Comprehensive Guidance
Discover the Future of Dogecoin with Our Comprehensive Guidance
 
What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?
 
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and NordhausChapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
 
How to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete GuideHow to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete Guide
 
一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理
一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理
一比一原版(cwu毕业证书)美国中央华盛顿大学毕业证如何办理
 
Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...
Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...
Governor Olli Rehn: Inflation down and recovery supported by interest rate cu...
 
一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查
一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查
一比一原版美国新罕布什尔大学(unh)毕业证学历认证真实可查
 
Accounting Information Systems (AIS).pptx
Accounting Information Systems (AIS).pptxAccounting Information Systems (AIS).pptx
Accounting Information Systems (AIS).pptx
 
Discovering Delhi - India's Cultural Capital.pptx
Discovering Delhi - India's Cultural Capital.pptxDiscovering Delhi - India's Cultural Capital.pptx
Discovering Delhi - India's Cultural Capital.pptx
 
Money20/20 and EU Networking Event of 20/24!
Money20/20 and EU Networking Event of 20/24!Money20/20 and EU Networking Event of 20/24!
Money20/20 and EU Networking Event of 20/24!
 

Report on GST - Equentis Research !!

  • 1. Equentis Wealth Advisory Services (P) Ltd Registered Office: 712, Raheja Chambers, Nariman Point, Mumbai – 400021 India Tel: +91 22 61013800 Email: info@researchandranking.com Event Update The Goods and Services Tax (GST) Independent Equity Research August - 2016
  • 2. 2 “………………..but I have promises to keep, And miles to go before I sleep” Robert Frost AN UPDATE ON ONE OF INDIA’S MOST REVOLUTIONARY ECONOMIC REFORMS: GST Q: What is the Goods and Services Tax (GST)? A: The GST is a comprehensive nationwide indirect tax on manufacture, sale and consumption of goods and services. The aim is to make India a unified common market. GST will be levied and collected at each stage of sale or purchase of goods or services. Through an input tax credit mechanism, this tax will be collected on value-addition on transactions involving both goods and services, at each stage of sale or purchase in the entire supply chain. This 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 ultimately bears this tax being the last person in the whole supply chain. The ultimate objective is to widen tax base of the country followed by reduction in tax rates leading to lower cost to consumers. The Government aims to implement GST from April, 2017. Q: What are objectives of GST? A: Some of the primary objectives of GST-based taxation are: Ensuring availability of input credit across the value chain Minimizing cascading effect of taxation Simplification of tax administration and compliance Harmonization of tax base, laws, and administration procedures across the country Minimizing tax rate slabs to avoid classification issues Prevention of unhealthy competition among states Increasing the tax base and raising compliance Q: What are the GST implication challenges? A: • Lack of Adaptation • Trained staff • Double registration can increase compliances and cost • Lack of clear mechanism to control tax evasion • Hard to estimate the exact impact of GST Q: Which taxes will be subsumed into the GST? A: At the Central Level: o Central Excise Duty o Additional Excise Duty o Service Tax o Countervailing Duty o Special additional duty of customs o Central Surcharges and Cesses so far as they relate to the supply of goods and services. At the State Level: o Value-added tax / Sales tax o Entertainment tax o Octroi and entry tax o Purchase tax o Luxury tax o Taxes on lottery, betting and gambling
  • 3. 3 Q: What are the areas that are not covered under purview of GST? A: • All Petroleum products (a number of states have voiced concerns) • Tax on entertainment and amusement levied and collected by Panchayat /Municipality/District Council • Tax on alcoholic liquor for human consumption • Stamp duty, Customs duty • Taxes on consumption or sale of electricity Q: What is the expected GST structure to be implemented in India? A: GST will be a dual rate structure under which both the Union and State governments will be empowered to levy and administer taxes concurrently on a uniform base of goods and services. CGST: The Centre would levy and collect CGST on all transactions within a state. SGST: The States would levy and collect SGST on all transactions within a state, to be levied by the states. IGST: The Centre would levy and collect IGST on all inter-state transactions. Rate of IGST will be approximately equal to sum of CGST and SGST. Q: Illustration – pre-GST and post-GST A: Pre-GST Scenario Current Scenario (Rs.) Manufacturer Distribution Retailer Price to Consumer Cost of Production 100 172 216 Value add 50 20 30 Total 150 192 246 Excise @ 12.5% 19 - - TOTAL 169 192 246 253 CST @ 2% 3 - - VAT @ 12.5% 0 24 31 VAT Set off (0) - (24) TOTAL 172 216 253 Source: Edelweiss Research Post-GST Scenario Current Scenario (Rs.) Manufacturer Distribution Retailer Price to Consumer Cost of Production 100 180 210 Value add 50 20 30 Total 150 200 240 248 GST @ 20% 30 40 48 GST Set off - (30) (40) TOTAL 180 210 248 Source: Edelweiss Research Q: What are the expected benefits of GST? A: GST will result in lower tax incidence for manufacturers in organized sector, with a harmonized tax structure, unified tax base and common rules and administrative procedures coming into effect across the nation. It will also result in widening of the tax base to include a comprehensive list of goods and services. This will bring in transparency and encourage investments in the organized sector, helping the economy gain growth momentum. Specified consumer price is of inter- state, if goods are moving in the same state then price to end consumer is going to reduce by Rs. 3, which is equal to CST paid by Manufacturer.
  • 4. 4 GST will subsume large number of taxes imposed by the central and state governments. Full credit of input tax will be available which will avoid double taxation, currently prevalent in some sectors. This will lower effective tax rates for multiple sectors. Logistics and inventory carrying costs will decline. Currently, companies put additional set ups like depots and C&F agents in different states to bypass CST. With GST coming into force, these companies can have centralized warehouses and avoid additional costs. Logistics costs and transit time will also reduce going forward. Currently, considerable time is wasted by trucks at the state border check-points due to the various sales and entry tax requirements of the different states. Shift of business from unorganized to organized players as tax advantages currently enjoyed by the unorganized players will diminish and market share of the organized players may potentially increase. As per various estimates, the implementation of GST is expected to boost GDP growth by ~2% over next 2 – 3 years. Q: Will inflation increase after GST? A: Impact of GST on inflation will be dependent upon the GST rate and its comprehensiveness. It is widely believed that under the proposed GST, effective tax rate on goods (~70-75% of the CPI basket) will decline. Services-oriented components constitute ~25-30% of the CPI basket with high weights on housing, transport and communication, etc. Currently, service tax is not imposed on certain (~12% of the CPI basket) services and these services are also expected to be exempt under GST regime. Thus, hike in tax rate on services is unlikely to have any material direct impact on CPI. A significant proportion (~35-40%) of goods (mainly agro products) included in the CPI basket is not subject to tax currently and we expect this status will continue in future also. Thus, transition to GST will not have a significant impact on inflation. Q: What would be the sector-wise impact of GST? A: Sector Impact of Tax Rate Inventory Management Logistics For organized Players Overall Impact Cement Consumer Durables FMCG Pharmaceuticals Automobiles Capital Goods IT/ITes Media BFSI Textile Building / Home Materials Telecommunications Metals Multiplex Source: Edelweiss Research Color Code: Green – Positive, Red – Negative, Yellow -- Neutral
  • 5. 5 DISCLAIMER Equentis Wealth Advisory Services Private Limited (EWASPL) is registered under the SEBI (Investment Advisers) Regulations, 2013. “Research & Ranking” is the brand under which the Research Division of EWASPL render’s its Research Services. General Disclaimers: This Research Report (hereinafter called ‘Report’) is prepared and distributed by EWASPL for information purposes only. The recommendations, if any, made herein are expression of views and/or opinions and should not be deemed or construed to be neither advice for the purpose of purchase or sale of any security, derivatives or any other security through EWASPL nor any solicitation or offering of any investment /trading opportunity on behalf of the issuer(s) of the respective security(ies) referred to herein. These information / opinions / views are not meant to serve as a professional investment guide for the readers. No action is solicited based upon the information provided herein. Recipients of this Report should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed trading/investment decision before executing any trades or making any investments. This Report has been prepared on the basis of publicly available information, internally developed data and other sources believed by EWASPL to be reliable. EWASPL or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information / opinions / views. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of EWASPL shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information / opinions / views contained in this Report. Risks: Trading and investment in securities are subject to market risks. There are no assurances or guarantees that the objectives of any of trading / investment in securities will be achieved. The trades/ investments referred to herein may not be suitable to all categories of traders/investors. The names of securities mentioned herein do not in any manner indicate their prospects or returns. The value of securities referred to herein may be adversely affected by the performance or otherwise of the respective issuer companies, changes in the market conditions, micro and macro factors and forces affecting capital markets like interest rate risk, credit risk, liquidity risk and reinvestment risk. Derivative products may also be affected by various risks including but not limited to counter party risk, market risk, valuation risk, liquidity risk and other risks. Besides the price of the underlying asset, volatility, tenor and interest rates may affect the pricing of derivatives. Disclaimers in respect of jurisdiction: The possession, circulation and/or distribution of this Report may be restricted or regulated in certain jurisdictions by appropriate laws. No action has been or will be taken by EWASPL in any jurisdiction (other than India), where any action for such purpose(s) is required. Accordingly, this Report shall not be possessed, circulated and/or distributed in any such country or jurisdiction unless such action is in compliance with all applicable laws and regulations of such country or jurisdiction. EWASPL requires such recipient to inform himself about and to observe any restrictions at his own expense, without any liability to EWASPL. Any dispute arising out of this Report shall be subject to the exclusive jurisdiction of the Courts in Mumbai (India). Disclosure of Interest: The Research Analyst(s) who have prepared this Report hereby certify that the views /opinions expressed in this Report are their personal independent views/opinions in respect of the securities and their respective issuers. None of EWASPL, Research Analyst(s), or their relatives had any known direct /indirect material conflict of interest including any long/short position(s) in any specific security on which views/opinions have been made in this Report, during its preparation. EWASPL, the Research Analyst(s), or their relatives do not have financial interest in the issuer company(ies) of the said securities nor have ownership of 1% or more individually or jointly till the date of this Report. EWASPL, the Research Analyst(s), or their relatives have not received any compensation or other benefits from the said issuer company(ies) in last 12 months in any respect whatsoever. Copyright: The copyright in this Report belongs exclusively to EWASPL. This Report shall only be read by those persons to whom it has been delivered. No reprinting, reproduction, copying, distribution of this Report in any manner whatsoever, in whole or in part, is permitted without the prior express written consent of EWASPL. EWASPL’s activities were never suspended by SEBI or any other authority. Further, there does not exist any material adverse order/judgments/strictures assessed by any regulatory, government or public authority or agency or any law enforcing agency in last three years. Further, there does not exist any material enquiry of whatsoever nature instituted or pending against EWASPL as on the date of this Report. Important These disclaimers, risks and other disclosures must be read in conjunction with the information / opinions / views of which they form part of. CIN: U74999MH2015PTC262812; SEBI Registration No.:INA000003874