Impact of GST

In this article we will discuss the impact of GST on different businesses:

(i) Impact of GST on Manufacturers, Distributor, and Retailers

GST has increased competitiveness in the manufacturing sector of India. With the implementation of GST, the compliance burden has significantly decreased as compared to the old indirect tax regime. Under GST thus sector is developing all the more unequivocally. Moreover, due to the threshold aggregate turnover limit of 40 Lakhs INR (20 Lakhs INR in case of North-Eastern States), the manufacturers that were not under the taxable category beforehand have to obtain GST registration. This will prompt lesser tax evasion.

(ii) Impact of GST on the Logistics Sector

The logistics sector in India is one of the foundations of the Indian economy. Under GST, the logistics sector in India is now able to achieve the "Make In India" mission target launched by the Indian Government.

(iii) GST Impact on e-Commerce Sector

The e-commerce sector in India has been developing significantly. From various perspectives, GST will help the e-com sector grow yet the drawn-out impacts will be particularly intriguing in light of the fact that the GST law explicitly proposes a Tax Collection at Source (TCS) mechanism, which e-com operators are not very content with. However, the present TCS rate is at 1%.

(iv) Impact of GST on the Pharmaceutical Sector

In general, GST is profiting the pharma and healthcare businesses. GST has brought competitiveness among the generic drug manufacturer and has also improved the tax structure. GST has made easier access to health care services.

(v) GST Impact on Telecommunications

Under GST, the cost of operating the telecommunication has considerably declined. Manufacturers are saving money on costs through effective administration of inventory and by solidifying their distribution centers. This has even reduced logistics costs.

(vi) Impact of GST on Textile Sector

The Indian textile industry provides work to countless talented and incompetent specialists in the nation. Under GST, The contribution of the textile industry in the total annual export has increased to 10%. This annual import value is predicted to increase within the coming years if reports need to be believed.

(vii) GST Impact on Real Estate

The real estate sector is one of the largest sectors that provides employment to the larger section of the society. The impact of GST on the real estate sector is quite impossible.

(viii) Impact of GST on Agriculture

The agricultural sector is the biggest contributing part of the GDP of India. It covers around 16% of Indian GDP. One of the significant issues that were present among the farming division is the transportation of agricultural goods across state lines all over India that has been resolved after the implementation of GST.

(ix) GST Impact on Automobiles

The automobile industry is another biggest sector in the Indian economy as it provides employment to the “n” number of people in India. However, after the implementation of GST, the burden of tax compliance has been significantly reduced. Moreover, GST has quickened the tax process for the automobile industry due to automation.

(x) Impact of GST on Freelancers

Determining the impact of GST on freelancers will be quite unfair as freelancing in India is yet in an early industry as well as the standards and guidelines for this industry are still open to question. However, one thing we can say that the GST has made compliance procedure simpler for the freelancers too as they can now easily file their taxes without much of a stretch.

(xi) GST impact on Start-Ups

Ascertaining the impact of GST on Start-Up would be quite unfair as this concept has been recently introduced. However, the GST system really foreshadows well for the Indian startup scene as they can fulfill all the GST Compliance at one place, i.e., GST Portal.