Likely scenario post GST
Alcohol
Impact under GST
- Not covered under GST
- GST in supply chain would be a cost
- Quantum of state tax to be ascertained
Impact on consumers
- Possible increase in price
What companies should do
- Should represent for inclusion in GST
- Evaluate pricing for impact due to GST blockage on input side
Automobile
Impact under GST
- Decrease in effective rate of tax from 25-40% to 18-20%
- Excise duty, VAT/ CST, Octroi, Entry tax to be subsumed into GST
- Cross utilisation of credits on goods and services
Impact on consumers
- Automobiles will become cheaper
What companies should do
- Evaluate pricing
- Supply chain restructuring
Banking
Impact under GST
- Increase in effective rate from 15% to 18-20%
Impact on consumers
- Marginal increase in price
What companies should do
- Evaluate pricing of services
- Monitor input tax credit on account of increase in base- optimise costs
Consumer durables and FMCG
Impact under GST
- Decrease in effective rate of tax from 25-27% to 18-20%
- Excise duty, VAT/ CST, Octroi, Entry tax to be subsumed into GST
- Cross utilisation of credits on goods and services in the entire supply chain
Impact on consumers
- Decrease in prices
What companies should do
- Evaluate pricing
- Supply chain restructuring
E-commerce
Impact under GST
- Reduction in interstate trade barriers
- Tax collected at source - Increase in compliance cost
- Increase in rate
- Complexity due to place of supply rules
Impact on consumers
- Marginal increase in price
What companies should do
- Evaluate pricing
- Supply chain and reverse logistics restructuring
Logistics
Impact under GST
- Increase in effective rate from 15% to 18-20%
- Re-designing of supply chain by other sectors likely to favour the Logistics Sector
Impact on consumers
- Marginal increase in price
What companies should do
- Tap the business opportunities
- Supply chain restructuring
Media
Impact under GST
- Service tax (15%) and Entertainment tax (7%) to be subsumed into GST (18-20%)
- Cross utilisation of credits on goods and services
Impact on consumers
- Marginal decrease in price
What companies should do
- Evaluate pricing
- Monitor entertainment tax levied by local bodies
Pharmaceuticals
Impact under GST
- Excise duty (4-8%), VAT (5%)/ CST (2%) other state taxes to be subsumed into GST
- Cross utilisation of credits on goods and services
Impact on consumers
- Increase in price, if GST applied at normal rate 18-20%
What companies should do
- Evaluate continuation of exemptions and pricing
Real Estate
Impact under GST
- Stamp duty to continue on Land and constructed immovable property
- Cross utilisation of credits on goods and services available under GST
Impact on consumers
- Increase in price with stamp duty and GST both being levied
What companies should do
- Evaluate pricing
- Monitor input tax credit on account of increase in base- optimise costs
Telecom
Impact under GST
- Increase in effective rate from 15% to 18-20%
- Decentralised compliance under GST
- Multistate circles - a challenge
Impact on consumers
- Marginal increase in price
What companies should do
- Evaluate pricing of products
- Evaluate processes