IMPACT OF GOODS AND SERVICES TAX (GST) ON ONLINE

ELECTRICAL PRODUCTS ANDTHE BUYING BEHAVIOUR OF

CUSTOMERS IN KADAPA CITY

*Mr.K.Subbareddy, MBA
Assistant Professor,
K.S.R.M. College of Management Studies,
KADAPA – 516003, A.P.
Contact No: - + 919573054940

**Mr.T.Venkatesh, M.Com, MBA (PhD)

Research Scholar in Business Management,
Sri Venkateswara University, TIRUPATI
Assistant Professor, K.L.M. College of Engineering for women
KADAPA – 516003, A.P.
Email ID: venky3686@gmail.com
Contact No: - + 919885893686

ABSTRACT:
The Goods and Services Tax (GST) has become one of the importantfamous topics since its
introduction in India. GST was effectively started in July 2017 despite the mixed reviews
received from the practitioners, general public and most important businesses. The new tax
policy implemented has brought about changes in the country particularly in income tax and
business transactions. Thus, this study examines the perceived impacts and buying behavior
of Goods and Services Tax implementation on online shoppers in kadapa city, particularly in
Kadapa urban area. Based on literatures and previous studies, few factors have been
identified that posed the most impacts and buying behaviour of Goods and Services Tax
implementation. These factors are the changes in the shopping behavior, level of knowledge,
and demographic factors of online shoppers. This study used survey method for collecting the
data of 100 respondents.Questionnaires have been distributed to customers who are living in
kadapa urban area. The findings indicated that there is an impact of GST on online electrical
products customers buying preferences were changed, level of knowledge is less on Goods
and Services Tax. TowardsGoods and Services Taximplementation. Findings from this study
would contribute to a more comprehensive understanding on GST and their impacts on online
electrical products customers.

Keywords: Goods and Services Tax, online shoppers, online stores, India

INTRODUCTION:
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July
2017 and was applicable throughout India which replaced multiple cascading taxes levied by
the central and state governments. It was introduced as The Constitution (One Hundred and

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First Amendment) Act 2017,[1] following the passage of Constitution 122nd Amendment Act
Bill. The GST is governed by a GST Council and its Chairman is the Finance Minister of
India. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% ,18%
and 28%. There is a special rate of 0.25% on rough precious and semi-precious stones and
3% on gold.[2] In addition a cess of 22% or other rates on top of 28% GST applies on few
items like aerated drinks, luxury cars and tobacco products. [3] GST replaced a slew of indirect
taxes with a unified tax and is therefore set to dramatically reshape the country's 2 trillion
dollar economy.[4

What is GST
GST is one indirect tax for the whole nation, which will make India one unified common
market. It is a multi-stage, destination-based tax that will be levied on every value addition. 
The tax regime which was initiated by the UPA government has been put into force by the
Narendra Modi government tonight. GST is believed to replace the current indirect tax
system and will replace a mix of more than a dozen state and central levies built up over
seven decades with a one national GST.

History of GST
The Goods and Services Tax (GST) was first discussed in the Kelkar Task Force report on
indirect taxes in 2003. After seven long years, a proposal to introduce a national GST by
April 1, 2010, was first mooted in the Budget Speech for the financial year 2006-07. The idea
of GST was bogged down for years in bipartisan debate, with political parties in government
trying to push it and those in opposition pulling it down.
GST Rate & HSN Code for Electrical Parts & Electronics
HSN Description Rate Effective From
Code (%)

8501 Electric motors and generators (excluding generating sets) 18 28/06/2017

8502 Electric generating sets and rotary converters 18 28/06/2017

8503 Parts suitable for use solely or principally with the 18 28/06/2017
machines of heading 8501 or 8502

8504 Transformers Industrial Electronics; Electrical 18 28/06/2017

Transformer; Static Convertors (UPS)

8506 Primary cells and primary batteries 18 14/11/2017

8507 Electric accumulators, including separators therefor, 28 14/11/2017

whether or not rectangular (including square)

8508 Vacuum cleaners 18 14/11/2017

8509 Electro-mechanical domestic appliances, with self- 18 14/11/2017

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 contained electric motor, other than vacuum cleaners of
heading 8508 [inserted w.e.f 14/11/2017 :other than wet
grinder consisting of stone as a grinder]

8509 Wet grinder consisting of stone as a grinder” 12 14/11/2017

8510 Shavers, hair clippers and hair-removing appliances, with 18 14/11/2017

self-contained electric motor

8512 Electrical lighting or signalling equipment (excluding 18 14/11/2017

articles of heading 8539), windscreen wipers, defrosters
and demisters, of a kind used for cycles or motor vehicles

8513 Portable electric lamps designed to function by their own 18 14/11/2017

source of energy (for example, dry batteries, accumulators,
magnetos), other than lighting equipment of heading 8512

8514 Industrial or laboratory electric furnaces and ovens 18 28/06/2017

(including those functioning by induction or dielectric
loss); other industrial or laboratory equipment for the heat
treatment of materials by induction or dielectric loss

8515 Electric (including electrically heated gas), laser or other 18 28/06/2017

light or photo beam, ultrasonic, electron beam, magnetic
pulse or plasma arc soldering, brazing or welding machines
and apparatus, whether or not capable of cutting; electric
machines and apparatus for hot spraying of metals or
cermets

8517 Telephones for cellular networks or for other wireless 12 28/06/2017

networks

8517 Telephone sets; other apparatus for the transmission or 18 28/06/2017

reception of voice, images or other data, including
apparatus for communication in a wired or wireless
network (such as a local or wide area network), other than
transmission or reception apparatus of heading 8443, 8525,
8527 or 8528

8517 ISDN System [8517 69 10], ISDN Termi- nal Adaptor 18 14/11/2107
[8517 69 20], X 25 Pads [8517 69 40]

8518 Microphones and stands therefor; loudspeakers, whether or 18 28/06/2017

not mounted in their enclosures [deleted w.e.f : 14/11/2017
other than single loudspeakers, mounted in their

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 enclosures]; headphones and earphones, whether or not
combined with a microphone, and sets consisting of a
microphone and one or more loudspeakers; (inserted w.e.f :
14/11/2017 : audio-frequency electric amplifiers; electric
sound amplifier set)

8519 Sound recording or reproducing apparatus 18 14/11/2107

8521 Video recording or reproducing apparatus, whether or not 18 28/06/2017

incorporating a video tuner

8522 Parts and accessories suitable for use solely or principally 18 14/11/2107
with the apparatus of headings 8519 or 8521

8528 Computer monitors not exceeding 20 inches, (inserted 18 28/06/2017

w.e.f 14/11/2017 : and set top Box for Television (TV)

8528 Monitors and projectors, not incorporating television 18 14/11/2107

reception apparatus; reception apparatus for television,
whether or not incorporating radio-broadcast receiver or
sound or video recording or reproducing apparatus [other
than computer monitors not exceeding 20 inches]

8529 Parts suitable for use solely or principally with the 18 14/11/2107
apparatus of headings 8525 to 8528

8532 Electrical capacitors, fixed, variable or adjustable (pre-set) 18 28/06/2017

8533 Electrical resistors (including rheostats and 18 28/06/2017

potentiometers), other than heating resistors

8538 Parts suitable for use solely or principally with the 18 28/06/2017
apparatus of heading 8535, 8536 or 8537

8539 LED lamps 12 28/06/2017

8543 Electrical machines and apparatus, having individual 18 28/06/2017

functions, not specified or included elsewhere in this
Chapter

8544 Winding Wires; Coaxial cables; Optical Fiber 18 28/06/2017

85 Parts for manufacture of Telephones for cellular networks 12 28/06/2017

or for other wireless networks

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Online shopping:
Online shopping is a form of electronic commerce which allows consumers to directly buy
goods or services from a seller over the Internet using a web browser. Consumers find a
product of interest by visiting the website of the retailer directly or by searching among
alternative vendors using a shopping search engine, which displays the same product's
availability and pricing at different e-retailers. As of 2016, customers can shop online using a
range of different computers and devices, including desktop computers, laptops, tablet
computers and smartphones.

An online shop evokes the physical analogy of buying products or services at a regular
"bricks-and-mortar" retailer or shopping center; the process is called business-to-consumer
(B2C) online shopping. When an online store is set up to enable businesses to buy from
another businesses, the process is called business-to-business (B2B) online shopping. A
typical online store enables the customer to browse the firm's range of products and services,
view photos or images of the products, along with information about the product
specifications, features and prices.

Online stores typically enable shoppers to use "search" features to find specific models,
brands or items. Online customers must have access to the Internet and a valid method of
payment in order to complete a transaction, such as a credit card, an Interac-enabled debit
card, or a service such as PayPal. For physical products (e.g., paperback books or clothes),
the e-tailer ships the products to the customer; for digital products, such as digital audio files
of songs or software, the e-tailer typically sends the file to the customer over the Internet. The
largest of these online retailing corporations are Alibaba, Amazon.com, and eBay.

LITERATURE REVIEW
This section presents a brief analysis of related literature reviews. These reviews provide a
clear and concise explanation in order to deliver a better understanding on the purpose of
undertaking this study.
Goods and Services Tax
Goods and Services Tax (GST), which is otherwise called Value-Added Tax (VAT) in
numerous nations is a multi-stage consumption tax on products and services. GST is levied
on the supply of goods and services at each stages of the supply chainfrom the supplier up to
the retail stage of the distribution. Despite the fact that GST is imposed at every level of the
supply chain,the tax element does not become a part of the cost of the product because GST
paid on the business inputs is claimable(Padmashree, 2010). In this way, it does not make a
difference what number of stages where a specific goods and servicesexperiences through the
supply chain it is because input tax brought about at the past stage is constantly deducted by
theorganizations at the following in the supply chain. GST is a wide based consumption tax
covering all divisions of the economy.For instance, all goods and services made in Malaysia
including imports with the exception of particular products and services
which are sorted under zero rated supply and exempt supply arranges as controlled by the
Minister of Finance and published inthe Gazette. The essential central of GST is its self-
policing highlights which permit the organizations to claim their input tax credit bymethod of

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automatically deduct in the accounting system. This facilitates the administrative strategies
with respect toorganizations and the Government. Along these lines, the Government's
delivery system will be further upgraded.

OBJECTIVE OF THE STUDY

1) To study the impact of GST on online shoppers in kadapa city.
2) To assess the perception of online shoppers towards GST.
3) To study the various factors influencing buying behaviour.

RESEARCH METHODOLOGY
Simple percentage data analysis techniques are used to analyze the data collected from the
Primary sources by doing a sample survey on impact of GST on online shoppers in kadapa
city.
Instrument: A questionnaire is designed having 15 questions exploring the impact
andbuying behaviour of the online electrical products shoppers on GST. Then the
questionnaires were filled by therespondents.
Sample: online shoppers has been chosen from kadapa city,which is situated in part of
Andhra Pradeshstate, in India.. The respondents were chosen onconvenience basis and were
studied using questionnaire method of data collection. Thequestionnaire was instrumented on
a sample of 100 by adopting convenient sampling method.

DATA ANALYSIS AND INTERPRETATIONS

Table 1 Frequency Analysis on Age, Gender, Occupation and Income
S.no Particulars Frequency Percentage
1 Age
Below 25 10 10
25-30 48 48
30-40 38 38
40 Above 4 4
Total 100 100
2 Gender
Male 75 75
Female 25 25
Total 100 100
3 Occupation
Employee 41 41
Business 29 29
House wife 20 20
Others 10 10
Total 100 100
4 Income
Below 10000 5 5
10000-25000 25 25

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 25000-50000 48 48
Above 1 Lacks 22 22
Total 100 100
The respondent profile as displayed in table -1 indicates the online shoppers, kadapa city
Demographic .Socio Economic profile. Majority of respondents are in the age group of 25-30
years (48%) ,between 30-40 years (38%) , below 25 years (10%)and 40 above (04%). males
(75%) and female (25%). Majority of the respondents Occupation is employees (41%),
Business 29(%), House wife and others are (10%). Most of the respondents have income
25000-50000 (48%), 10000-25000 at (25%), above 1 lacks at (22%).and below 10000 (5%).

5) How long have you been with shopping onlineelectronic products?

S.N No of years No of % of respondents

O respondents
1 < 6 months 15 15

2 6-12 months 25 25

3 1-3 years 40 40

4 Over 3 years 20 20

Total 100 100

Interpretation: Majority of the online shoppers are electrical products shopping are 40% 1-
3 years,25%, 6-12 months,20%, Over 3 years,15%, < 6 months.

6) Do you think GST would make an impact on your online shopping Behavior?

S.N No of years No of respondents % of respondents

O
1 Very high 35 35
2 High 20 20
3 Average 20 20
4 low 25 25
Total 100 100
Interpretation: Majority of the respondents 35%, online shoppers said that GST impact is
veryhigh, 20% high Impact of GST ,20% Average Impact of GST and 25% low GST impact
on online shopping.

7) Did you notice any price change after GST?

S.N Level of respondents No of respondents % of respondents

O
1 Yes 100 100
2 No 00 00

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 Total 100 100
Interpretation:all the respondents said they noticed price changes after GST

8) Do you have full awareness on GST?

S.N Level of respondents No of respondents % of respondents
O
1 Yes 25 25
2 No 75 75
Total 100 100

Interpretation: 75% of the online shoppers are not aware on GST and 25% are having
awareness on GST.

9) GST is Advantageous for online shoppers

S.N Level of respondents No of respondents % of respondents
O
1 Yes 48 48
2 No 52 52
Total 100 100

Interpretation: 52% are said that GST is not Advantageous and 48% of the online shoppers
said that GST is Advantageous for online shoppers.

10) Transparencyin online billing and guarantee?

S.N Level of respondents No of respondents % of respondents
O
1 Yes 100 100
2 No 00 00
Total 100 100
Interpretation: all the respondents are agree that there is a Transparency in online billing
and guarantee.

11) Online stores are increases Rate of tax on Products?

S.N Level of respondents No of respondents % of respondents
O
1 Yes 80 80
2 No 20 20
Total 100 100

Interpretation: 80% of the online shoppers aresaidthat Online stores are increases Rate of
tax on Products and 20% 0f the online shoppers are said that Online stores are not increases
Rate of tax on Products .

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12) Are you satisfied with the present GST Rates?
S.N Level of respondents No of respondents % of respondents
O
1 Yes 45 45
2 No 55 55
Total 100 100

Interpretation: 55% of the online shoppers are not satisfied with present GST rates and 45%
are satisfied with the present GST rates.

13) Effect of GST on buying decisions?

Effect of GST on buying decisions

S.N Level of respondents No of respondents % of respondents

O
1 Yes 62 62
2 No 38 38
Total 100 100
Interpretation: The study found that 62% respondents confirming that GST has effect on
online buying decision and 38% respondents opinioned that GST has effect on online buying
decision related to electrical products

14) Effect of GST on the Price of widely used products.

Effect of GST on the Price of widely used products

S.N Level of respondents No of respondents % of respondents

O
1 Yes 69 69
2 No 31 31
Total 100 100

Interpretation: GST and its effect on the price of widely consumed products. Surprisingly,
69 % of the respondents opinioned that there is a increase in the price of the widely used
products since these are placed under the highest tax slab of 28% to 18%.

15) High impact on customer buying decision making through online electronic products
shopping

S.N Level of respondents No of respondents % of respondents

O
1 Yes 85 85
2 No 15 15

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 Total 100 100

Interpretation: 85% respondents confirming that GST has high impact on online buying
decision and 15% respondents opinioned that GST has High impact on customer buying
decision making through online electronic products shopping

FINDINGS:

 Majority of the online shoppers dealing with electronic retail shopping are 40% 1-3
years,25%, 6-12 months,20%, Over 3 years,15%, < 6 months.
 Majority of the respondents 35%, online shoppers said that GST impact is very
high, 20% high Impact of GST ,20% Average Impact of GST and 25% low GST
impact on online shopping.
 All the respondents said they noticed price changes after GST
 75% of the online shoppers are not aware on GST and 25% are having awareness on
GST.
 58% of the online shoppers said that GST is Advantageous and 42% are said that GST
is not Advantageous for online shoppers.
 all the respondents are agree that there is a Transparency in online billing and
guarantee

 80% of the online shoppers are said that Online stores are increases Rate of tax on
Products and 20% 0f the online shoppers are said that Online stores are not increases
Rate of tax on Products .
 55% of the online shoppers are not satisfied with present GST rates and 45% are
satisfied with the present GST rates.

CONCLUSION: In the modern age, many products have become part of basic needs. Every
household are mostly purchasing products through online. Before GST product cost is very
less in online. Due to GST online stores are increased product cost and service charges.
Online shoppers are not satisfied with present GST rates. There is impact of goods and
services tax (GST) on online shoppers purchase preferences.
REFERENCES:
1) economictimes.indiatimes.com/articleshow/58743715.cms?
utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
2) https://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India)
3) https://www.taxmann.com/blogpost/2000000048/what-is-gst-goods-and-services-tax-
explained-with-benefits.aspx
4) https://economictimes.indiatimes.com/news/economy/policy/how-gst-will-change-
your-online-shopping-experience-from-july-1/articleshow/59319112.cms.
5) http://www.moneycontrol.com/news/business/economy/three-ways-gst-can-impact-
your-online-shopping-experience-2312119.html.
6) http://www.financialexpress.com/money/gst-impact-on-online-shopping-tax-breaks-
all-you-to-know-about-the-changed-rules-in-7-brief-points/749411/

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7) http://www.indiaretailing.com/wp-content/uploads/2016/08/pwc-iamai-impact-of-gst-
on-online-marketplaces-may-2016.pdf.
8) http://idtc-icai.s3.amazonaws.com/download/E-commerce-Research-paper-GST.pdf.
9) https://www.quora.com/What-will-be-the-impact-of-GST-on-Ecommerce-in-India.
10) Amanuddin Shamsuddin,” the impacts of goods and services tax (GST) on the small
medium enterprise (SMES) in johorbahru”, South East Asia Journal of Contemporary
Business, Economics and Law, Vol. 10, Issue 1 (Aug.)2016,ISSN 2289-1560.
https://en.wikipedia.org/wiki/Online_shopping

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