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One Nation One Market One Tax

- Launch- 1st July,2017 by The President

- Indirect Tax
- Four slabs (5,12,18,28)
- Registration
- HSN Code
- Input Tax Credit
- Goods & Services Tax Network

What will be taxed?

When will they be taxed?

Who will be taxed?

What will be the tax rate?


• Anti-profiteering measure
• Establish a legal framework for GST and prepare the IT infrastructure
• Carry out “change management“ and train officials
• Consult Trade and Industry for roll out of the new tax regime from April
• Calculation of Revenue Base of Centre and States
• Centre and states to arrive at consensus on Model GST Law, the threshold
limits, compounding limits etc. – Fix GST rate structure and list out
• Cabinet Approval for the CGST and IGST laws by Centre and for SGST
laws by all states -Winter Session 2016

• 60,000 assessing officers, equally divided between the Centre and states, were
trained in GST.
• GSTN provided IT training to the officers.
• The government prepared easy-to-understand training modules for small
• The government provided a fair mechanism for transition credits for goods
with documentary evidence on actuals or otherwise on a presumptive basis.
FMCG – GST rates v/s Previous rates
FMCG - Impact on the sector
 Increase in effective tax rates:
As the tax rate was expected to increase the sellers started stocking the goods in Q1 ( april may june) as
the tax rate was expected to be 28% on most categories ,hence revenue increase sharply in this period. Due
to this hoarding the sales in the subsequent quarter (july aug sep )declined as the wholesalers had a lot of
prior stock. So revenues of many companies declined. Also complexity of GST contributed to this.

However the recent reduction in tax rates to 18% for all categories will reduce the prices. And
Its impact is yet to be seen.
 Reduction in logistics costs:
Also, The FMCG sector benefited from GST by saving a considerable amount of expenses on logistics. Due to
the smoother supply chain management in regards to paying tax, claiming input credit, and removing CST
under the GST regime, there was cost reduction in terms of transportation and storage of goods. The
reduction in taxes and distribution costs enabled companies to lower prices on consumer goods.
 Constant demand:
The demand for these products has not seen any change.
Impact on Hindustan Unilever’s Revenue due to
increase in effective tax rates after GST
YEAR 2016 2017 % CHANGE
9200 9094

Q1 8662 CR 9094 CR + 4.98 %

Q2 8335 CR 8199 CR -1.66 %

8400 8335
8200  Revenue of Q1 increased sharply on YoY basis
because wholesalers were hoarding goods
because of speculation of increase tax rates
7800 and complication.
 However in Q2 due to excess stock with
Q1(apr,may,june) Q2(july,Aug,Sep) wholesalers the sales was slow and hence
2016 2017 witnessed a decline on YoY basis.
Impact on prices of various Hindustan Unilever
products due to GST.
MAJOR PRODUCTS BEFORE AFTER  The company saved a lot of cost on
GST GST supply chain management due to
abolishment of interstate taxes and
better efficiency.
Rin Bar RS 18 RS 15
 It passed on the benefit to consumer by
(250 g)
either reducing the prices or increasing
the product quantity.
Surf excel 95 g 105 g  Prices of many other products were
Bar (RS 10) reduced irrespective of increase or
decrease of effective tax rates.
Dove soap - 33% extra

Inspite of short term revenue loss for

Pears soap - 33% extra companies it will benefit them in the
longrun. Similarly it wil benefit consumers
Home Appliances - GST rates v/s Previous rates

Major companies impacted are: LG, Samsung, Whirlpool, Sony etc

Home Appliances – Impact on the sector

Increase in Effective tax rates:

Most of these items fall in the 28% slab so prices of the products has
But prices in cities like Mumbai which attracted Octroi duty of 5% will
come down.
Decrease in demand:
The demand for these goods has reduced considerably in the areas where
the prices have risen in the early stage of GST.
However the industry had a good growth rate of around 20 -25% this
festive season.
Categories like cell phones continued to have an explosive demand
irrespective of Gst changes.
Impact on LG’s Revenue and Prices

Prices of televisions has increased by 2-7 % depending on the model.

Prices of refrigerators has also increased.
Similarly microwaves have also become dearer.

But inspite of price rises the revenue has now changed much and is growing
at a healthy rate.
Impact on SMEs

All the compliance procedures under GST — Registration, Payments, Refunds and Returns will
now be carried out through online portals only and thus SMEs need not worry about interacting
with department officers for carrying out these compliances, which are considered as a headache
in the current tax regime.

No doubt that GST is aimed to increase the taxpayer base, majorly SMEs into its scope and will
put a burden of compliance and associated costs to them.

In the long run, GST will turn these SMEs more competitive with a level playing field between
large enterprises and them.
Compliance Procedure Positives Negatives
Registration Online registration will ensure timely receipt of Not all the SMEs have technical expertise to
certificate of registration and minimal deal with online systems, thus most of them will
bureaucracy interface. need intermediaries to obtain registration for
them. This will add to their registration cost.

Payment Electronic compliance will bring transparency Since funds are required to be maintained in
and will also reduce the compliance cost. the form of electronic credit ledger with the tax
department, it may result in liquidity crunch.

Refund Electronic refund procedures will fast track the Refunds can be claimed only after filing of
process and enhance liquidity for SMEs relevant returns. Also it depends on the
compliances done by the supplier and his rating.

Returns All returns are required to be filed Minimum of thirty-seven returns are required to
electronically and input tax credit and tax be filed by every registered taxpayer during a
liability adjustment will happen automatically financial year. Thus SMEs will have to deploy
on the basis of these returns additional resources and eventual cost of
compliance will increase

A. Citizens • Decrease in inflation

B. Trade/Industry • Ease of doing business
C. Central/State Government • Decrease in Black transaction
• More informed Consumer
• Poorer states to gain
• Make in India
Products outside GST
Understanding CGST, SGST, UTGST & IGST
Roles of CBEC

• Role in policy making, drafting of GST law, rules and procedures

• Responsible for administration of the CGST and IGST law
• Assessment, audit, anti-evasion & enforcement under CGST,
• Levy & collection of central exise duty on products outside GST
• Levy and collection of Custom duties
• Developing linkages of CBEC-GST system with GSTN
• Training of officials of both Centre and States
• Outreach programs for Trade and Industry
• Gst Awareness campaign
1. My GST
2. Laws, Rules & Rates
3. Migration to GST
4. GST in Media
5. Background Materials
6. Helpdesk
GST Awareness Campaign - MANTHAN

• https://www.cleartax.in

• www.cbec.gov.in

• www.gstn.org

• www.livemint.com