Impact of GST on Retail Market in India

International Journal of Economics, Commerce and Research (IJECR) ISSN (P): 2250–0006; ISSN (E): 2319–4472 Vol. 10, Issue 1, Jun 2020, 61–68 © TJPRC Pvt. Ltd.

IMPACT OF GST ON RETAIL MARKET IN INDIA Dr. K. A. KUNJITHAPATHAM Assistant Professor, Department of Commerce, Sri Sankara Arts and Science College, Enathur, Kanchipuram, Tamil Nadu, India ABSTRACT India has given a well-organized and shortened assessment system, in which an commanding separation has been executed in a few of the Central Government, the distinct State Governments in addition to the Local Bodies. Retail enterprise in India is a key pillar of the economic system. The GST was released on 1st July 2017 in India. CPI and IIP have a few adjustments after implementation of GST in India.

KEYWORDS: GST, Retail Market, CPI & IIP

Received: Oct 21, 2019; Accepted: Nov 11, 2019; Published: Jan 22, 2020; Paper Id.: IJECRJUN20209

The sentence tax is obtained from the estimation significance of the Latin phrase ' taxare.' Ancient Greece's city states enforced eishpora to pay for wars that had been severe; but it was necessary to reimburse any excess once a conflict was over. Athens placed on foreigners a monthly poll tax. Imperial Rome used colonized peoples- ' homage to multiply the empire's bounty. Julius Caesar imposed a one-cents income tax-; Augustus established an inheritance tax to provide the navy with pension resources. However, human bondage stayed for Greece and Rome

Original Article

INTRODUCTION

the most money-making form of homage.

In 1954, GST was first performed in France and GST was adopted by about one hundred and forty (140) countries. The idea of GST in India was first launched in 2007 with the help of the BJP government, but was unable to come into force due to the refusal by many countries. GST is an indirect tax that will be swallowed up to the maximum of the oblique taxes levied with the help of the centre and nation like centre taxes, including the centre excise duty, the extra excise duty, the supplier tax, the middle sales tax, the counterbalancing duty and the special additional customs and kingdom tax. Custom liability will no longer be covered by GST. It is an indirect tax levied from producer to customer on products and amenities. It can be paid in the simplest way for price addition at each level by deducting taxes already paid at each stage, thus reducing the value for buyers by input tax credit score and reducing the cascading effect of taxes.1 Taxation in India India has been given a well-dependent and simplified taxation system in which many of the central government, separate state governments in addition to the local authorities, have been performed an authoritative segregation. The Revenue Department below the Ministry of Finance of India is solely responsible for tax calculations.

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Dr. K. A. Kunjithapatham

Economic Reform in India The year 2017 will be etched in Indian records all the time because the year noticed the execution of the largest and most important economic reform, GST since Independence. The reform that took more than a decade of serious discussion was finally implemented with effect from 1 July 2017.

METHODOLOGY This document is an explanatory study based mainly on secondary records of newspapers, articles, newspapers and magazines.

Objectives •

To recognize the Retail Market’s Impact on GST

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To realize approximately the pre and put up sports of GST on Retail Market

Indian Retail Market India's retail business is a main component of the financial system, accounting for about 10% of GDP. The Indian retail industry is expected to be over US$ 600 billion and one of the top five global retail markets by using economic prices.

Introduction to GST GST is intended to be a unified oblique tax on products and services across the nation. In India's contemporary gadget, taxes are levied at each stage, using the Centre and the State on the general cost of the products at variable prices. But this is set to be implemented under the GSTdevice; tax can be levied the most conveniently at the value added at each degree. It is a single tax (accumulated at more than one point) with a complete set-off for previously paid taxes within the value chain. Thus, at all the previous phases, the final customer will experience the handiest GST charged through the final retailer in the supply chain with set-off benefits. GST recommends to eliminate the different degrees of taxation between States and to take into consideration the United States of America as a whole unmarried body when it comes to taxes on products and offers instead of a segmented creature. GST has become, but has been implemented within the Indian economic system to replace certain tax schemes composed of Facility Tax, cessation and supplements linked to the supply of products or products, Rest Room Preparations, ETC., Extra customs duties on textiles and fabric products, additional customs duties on items of unique significance. And a few taxes that could be incorporated into the GST system could also include: Luxury Tax, Commercial Tax, State cessation and surcharges, Lottery, Betting and Gambling Tax etc., Benefits of GST •

Removal of a couple of taxation.

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Removal of cascading tax effect, i.e. Tax on tax.

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Increase in the manufacturing of goods and services

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Increased call for delivering goods and services.

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Due to decrease in burden of taxes, there may be a discount in ordinary costs.

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Burden has been reduced at the final taxpayer, i.e. Consumer at the cease.

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Control over the flow of black cash because the machine normally followed through buyers and shopkeepers could be put to a obligatory check.

Impact Factor (JCC): 6.5424

NAAS Rating: 3.27

Impact of GST on Retail Market in India

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Revenue of the government extended by prolonged tax base.

Importance of GST to the Indian Economy With the help of ending many indirect taxes, GST is intended to get rid of the weight. GST can be essential to the financial system in respects such as GST reduces tax evasions and helps to provide additional cash to backward countries such as Bihar, Jharkhand and many others. Because of this, an individual can set up his factory in any nation without traumatic roughly unique tax schemes; it will also assist in eliminating neighbouring tax BIAS as a manner to improve the US economy. Ultimately, we can conclude that GST is a tax that can be a major leap forward in India's tax system.

GST Structure in India

Figure 1: GST Structure in India.

IGST: Inter-state transactions such as inventory transfers and imports becomes liable to IGST CGST and SGST: Every intra-nation transaction of deliver of goods and services would be vulnerable to CGST and SGST simultaneously.

GST Rates for Consumer and Customers The tax rates under GST are set at zero%, five%, 12%, 18% and 28% for numerous services and goods. Essential objects: 0% Common use or mass consumption items: five (5)% Lower general rate: 12% Higher standard charge: 18% Demerit / luxury items: 28% GST Rules and Guidelines4 •

‘Tax Invoice’ issuing of payable goods or offerings (format connected)

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‘Bill of Supply’ issuing in event of released goods or services (layout connected)

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Ensuring one-of-a-kind serial variety for every bill

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CGST, SGST to be charged similarly for neighbouring revenue. For example, 6% CGST and 6% SGST will be asked to pay with 12% GST sales in your nation

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Dr. K. A. Kunjithapatham

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IGST for any sale by interstate. IGST may be enforced for any sale outside your kingdom. For example, when delivering 18% of services or goods, from Delhi to Gurgaon or nation, IGST will be asked to pay with 18%.

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GST to be charged on any increase obtained in opposition to products and services being delivered. Example, if an individual ordered Rs. 10 Lakhs for the purchase of paperwork and gave Rs Five Lakhs improvement. Then, at that stage, he must pay GST to reinforce the dealer.

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You may need to provide the Receipt Voucher when you receive the boost quantity and charging GST to reinforce that quantity

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When selling any extra cash sales in excess of Rs 50,000, it is mandatory to identify the name and deal with the recipient of the client / provider

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Payment Voucher: When making payment to the supplier, a registered person or female who pays tax under the reverse rate system shall have a cost voucher. The price voucher must contain the prescribed information. (Layout attached).

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Voucher receipt: to be given upon receipt of the advance fee. (Format attached)

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Credit Note shall be awarded whereby the provider has paid a higher quantity of tax while the tax payable is less than merely levied by the recipient in such len where the dealer has to issue a credit note.

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Debit Note is delivered to the receiver for the amount of tax that is not charged with the provider's assistance, i.e.

If the seller collects, the amount of tax payable on such delivery of products and/or services will be reduced.

DO’S •

Maintaining report of all records. Pay additional value on file preservation than before.

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Be very careful about loading CGST, SGST and IGST.

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Informing all Goods & Services providers of your GSTIN / ARN.

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Get all buyers and supplier GSTIN.

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Apprise commonly cash owed.

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Contacting whenever oneis uncertain.

DON’TS •

Don't buy from unregistered vendors. It’s going to get input tax credit and you're going to have to pay GST because of the ' Reverse Charge ' mechanism

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Don't overlook separate serial invoice range

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Don't do anything about bill writing

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Do not invoice cancelation. If the supply of goods / services is cancelled, use credit

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Do not hesitate to invite us for any rationalization

Impact Factor (JCC): 6.5424

NAAS Rating: 3.27

Impact of GST on Retail Market in India

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FEATURES OF GST IN INDIA It will levy built-in GST on product and offer inter-state transactions. Petroleum and alcohol products have been held out of GST's reach. The law will have two components-central GST charged through the State and Centre GST charged through the States. However, in the event of inter-national trade or trade, the best way for the Centre to levy tax and receive goods and service tax would be to divide the tax collected between the Centre and the State, as provided for in Parliament.5 Introduction of GST in Indian Retail Industry GST released on 1st July 2017 in India has extra or less impacted each primary and minor business region within us. While some industries are seeing growth as a result of decreased taxes, a few others are facing a lower in income because of extended taxes. Retail is one of the major industries in India and additionally one in every of the largest within the world.

Three trillion USD 2020 at a compound annual boom fee of 16.7%. GST is, as common, applicable to almost each retail supply, affecting the fee for the end purchasers. Let’s discover the details about the effect of GST on shops. GST effectively replaces all of the various oblique taxes being applied to the delivery of retail products. Before GST, retailers needed to pay multiple taxes, inclusive of VAT, CST, provider tax, excise duty, and so forth, amounting to around 30% of the product cost. After GST, there may be handiest an unmarried tax, varying from twelve (12) to twenty-eight (28)% on one of a kind products. GST additionally reduces the cascading of taxes because the credit for enter taxes can be now claimed by using stores.6 A collection of most took place over the past year will permit real GDP increase to attain 6.75 % this financial and could upward push to 7.0 to 7.5 % in 2018-19.

Agriculture, industry and offerings sectors are anticipated to grow at the price of 2.1 consistent with4% consistent with 8% and 3% respectively in 2017-18.

The States’ percentage in taxes grew by 25.2 in step with cent at some stage in April-November 2017, much better than the boom in internet tax sales (to Centre) at 12.6 according to cent and of gross tax revenue at sixteen.5 (16.5) according to cent.

India grew by way of an expected 6.7% in 2017 as according to the World Bank’s estimates (there are numerous counts, including one via India) and is forecast to grow by using 7. 3% in 2018, and seven 5(7.5)% in each 2019 and 2020.7 India's GDP at consistent costs grew with the aid of 7.2 in keeping in September-December 2017 quarter as consistent with the CSO. Corporate profits in India are anticipated to develop with the aid of 15-20 in keeping with cent in FY 2018-19 supported by way of recovery in capital expenditure, in step with JM Financial.

The tax collection figures among April 2017- February 2018 display an growth in internet direct taxes with the aid of 19. Five(19.5) according to cent 12 months-on-yr and an boom in internet direct taxes by 22.2 consistent with cent 12 months-on-12 months India's forex reserves were US$ 422. Fifty three billion in the week up to March 23, 2018, in line with records from the RBI. India's merchandise exports and imports grew 11.02 in line with cent and 21.04 in keeping with cent on a y-o-y foundation to US$ 273. Seventy three(63) billion and US$ 416.87 billion, respectively, for the duration of April-February 2017-18.

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Dr. K. A. Kunjithapatham

CPI Meaning A CPI measures the changes in the price level of the consumer services and goods market basket acquired by families.8 IIP Meaning The Index of Industrial Production (IIP) is an index for India, which details out the increase of numerous sectors in an economic system consisting of mineral mining, energy and production.9 Table 1: Index of IIP (Eight Core Industries) (Base: 2011-12 = 100) Sector

Weight

Coal Crude Oil Natural Gas Refinery Products Fertilizers Steel Cement Electricity Overall Index

10.3335 8.9833 6.8768 28.0376 2.6276 17.9166 5.3720 19.8530 100.0000

20122013 103.2 99.4 85.6 107.2 96.7 107.9 107.5 104.0 103.8

20132014 104.2 99.2 74.5 108.6 98.1 115.8 111.5 110.3 106.5

20142015 112.6 98.4 70.5 108.8 99.4 121.7 118.1 126.6 111.7

20152016 118.0 97.0 67.2 114.1 106.4 120.2 123.5 133.8 115.1

20162017 121.8 94.5 66.5 119.7 106.6 133.1 122.0 141.6 120.5

Apr-Jul 20162017 108.8 95.1 65.4 119.3 101.7 127.7 129.3 144.0 118.8

Apr-Jul 20172018 105.3 95.2 68.7 120.1 100.3 136.5 124.7 151.8 121.7

Source: http://pib.nic.in/newsite/PrintRelease.aspx?relid = 170407 Indian Economy Moving towards Development •

Increase in registered direct and indirect taxpayers.

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50% boom in variety of oblique taxpayers.

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The present scenario of Indian Retail Market isn't always beneficial however can take advantage the momentum in future to end up one of the leading sectors.

CONCLUSIONS GST implementation will assist to alternate the direction of Indian economy. Implementation of GST has given a token of access for organised young entrepreneurs. Retail marketplace will go through a paradigm shift in rural regions. Success of GST implementation is showcased by means of the large enrolment of shops with right registration and alertness. GST must supply price addition to the clients as well as retailers.

REFERENCES 1.

Neha Rani and Sunil, “An overview about the impact of GST on various Sectors of Indian Economy”, The international Journal of Business and Management, Oct 2016, Vol 4 Issue 10 PP 186 – 190, ISSN 2321 – 8916.

2.

https://www.hrblock.in/earlygst/impact-gst-indian-economy/

3.

Singh, A., & Benjamin, R. (2017). An Analysis of Price Forecast & The Price Level Changes Owing to the Implementation of GST In India. International Journal of Financial Management (IJFM) ISSN (P): 2319–491X; ISSN (E): 2319-4928 Vol, 6, 1-4.

4.

http://www.iosrjournals.org/iosr-jbm/papers/Conf.17037-2017/Volume-7/7.%2033-36.pdf

5.

http://caindelhi.in/gst-rules-and-guidelines-dos-donts

6.

Mohammed BabaganaShettima,” International Journal of Engineering Technology Science and Research”, ISSN 2394 – 3386, Volume 4, Issue 10. October 2017. PP 293 – 298.

Impact Factor (JCC): 6.5424

NAAS Rating: 3.27

Impact of GST on Retail Market in India 7.

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Singh, A., & Benjamin, R. A Comparison of Pre GST & Post GST Prices and the Overall Price Level Changes of Goods in India.

8.

https://www.gsthelplineindia.com/blog/2018/03/23/impact-of-gst-on-retailers/

AUTHOR PROFILE

Dr. K. A. Kunjithapatham, is presently working has Assistant Professor in Commerce, Sri Sankara Arts and Science College, Enathur, Kanchipuram (Affiliated to University of Madras, Chennai). He obtained M.Com. from University of Madras, M.Phil. from Madurai Kamarajar University and Ph.D from Thiruvalluvar University. He has more than 23 years of teaching experience and 5 years of research experience. He has published 2 books, presented8papers in International conference and also published 5 Research Articles in UGC listed/Care listed Journals.

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