India’s nationwide sales tax was meant to unify the $2-trillion economy and make it easier for companies to transact across state borders. Nearly a month on, many are finding that doing business is more complicated than ever.
Ambiguous rules under the new, multi-rate Goods and Services Tax (GST) tax that went into effect on July 1 have left firms confused on how to price their products. The tax’s complex structure — four main rates ranging from 5 per cent to 28 per cent — has hurt sales and risks denting economic growth and government revenues in the months ahead. Click to read more
India’s daily power demand reflects the disruption caused by fears over transition to the newly implemented Goods and Services Tax that replaced multiple state and central levies.
The growth in power demand fell in June, revived in early July before dipping again, according to a research note by Neelkanth Mishra, managing director and India equity strategist at Credit Suisse.
From a peak of almost 3.6 billion units in May, the power demand declined to 3 billion units by the time the nationwide tax was rolled out on July 1. Companies had scheduled for production to restart after GST implementation and that may explain the pick-up in early July, the research note said. Click to read more
Civic officials are countering that the service is for the city, not for profit
Is cleaning the streets and collecting waste from households a ‘service’?
According to the Goods and Service Taxes regime, it is, and the ‘service’ attracts a tax of 18%.
The tax is being claimed on the contracts for cleaning the streets and segregating waste, hiring of autorickshaws and compacting trucks. Annually, the contracts are worth around ₹400 crore, which converts into an outgo of ₹72 crore from the coffers of the cash-strapped civic body. Click to read more
Students are suddenly finding eating out a bit more expensive after the country switched to the Goods and Services Tax or GST. GST is charged at 18 per cent in air-conditioned restaurants; earlier the tax was at 6 per cent, restaurant owners say.
“Everywhere we have been to, there has been only price increase. Now they charge 18 per cent along with the existing prices. Even they are not clear why they are charging that,” says college student Habin Hamza, who came for lunch with some friends. Click to read more
The manufacturing sector in India is a major economic driver. Today, Indian manufacturing companies have attracted the global spotlight and are transforming into significant global competitors. A glimpse of the history, India’s manufacturing sector has fulfilled momentous milestones, from initial industrialization and the license raj to liberalization and the current phase of global competitiveness.
Initially, the Indian manufacturing sector had been severely plagued by the complexities of the current multifaceted taxation structure. Indirect tax legislations often cost the manufacturing companies significant administrative and compliance expenses. Click to read more
More than a fourth of India’s 6 million-strong truck pool is said to be idle after the goods and services tax (GST) came into force on July 1 amid a drop in interstate movement of untaxed and underreported cargo, leading to a fall in retail freight charges. That’s having a knock-on effect on the transport and truck-making businesses, at least in the short term, experts said.
Interstate retail freight rates are down 40-50%, the sharpest decline in over three decades, said SP Singh, senior fellow at the Indian Foundation of Transport Research and Training (IFTRT). Such steep declines in freight rates were seen in 1984, 1988, 2008 and just after the 2016 demonetisation, say transporters. Click to read more
On July 10, Indiatoday.in reported, citing a LocalCircles survey, that over 51 per cent consumers complained about illegal levy of the Goods and Services Tax by retailers over and above the maximum retail price (MRP).
Sources have now told Indiatoday.in that following the report, the Department of Consumer Affairs of the Union government sent its teams for inspection at various places across the country to check if the retailers were actually charging GST over and above the MRP. The government teams found the complaints to be true, the sources said. Click to read more
As the nation ushered in the Goods and Services Tax (GST) on July 1, no one would have imagined that it might have adverse consequences for the environment. But with the tax rate on recycled plastic shooting up from 5.5% to 18% post-GST, ragpicking as a livelihood seems to be turning unviable, with attendant impact on the urban environment.
Take the case of Nagaratna and her self-help group (SHG) at Mahadevapura. Nearly a month post-GST, the Mahadevapura Mahila Okkuta, a collection of 17 SHGs that collects and segregates waste in Garudacharpalya, is staring at the prospect of their profits being wiped out. Click to read more
Distributors started restocking medicines in July, albeit at a slow pace as they adjust to the new indirect tax regime, since the trade channel continues to face problems, an industry report said.
As on 21 July, distributors held 22 days of inventory, marginally higher than 17 days at the end of June, AIOCD-AWACS, the market research unit of All India Chemists and Druggists Association (AIOCD) said in a report. Click to read more
The Indian pharmaceutical industry is a self-sufficient sector. It is also one of the top foreign earner industries and proudly the third largest pharmaceutical sector in the world. It is disheartening that the pharmaceutical industry has not got any mention in last few budgets. Hence the industry is expecting an increased profit margin with GST’s launch in India. This article will explain GST’s impact on the industry and its challenges. Click to read more
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