A Study on Impact of Goods and Service Tax on Consumer Durable

Goods

A Project Submitted to University of Mumbai for partial completion

of the degree of Master in Commerce
Under the Faculty of Commerce

By
Archana Ashok Raut
Under the Guidance of
Mr. Viral Chedda

Vivekanand Education Society’s College of Arts, Science and

Commerce, Sindhi Society, Chembur Mumbai – 400071

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Vivekanand Education Society’s college of Arts, Science and
Commerce, Sindhi Society, Chembur, Mumbai – 400071

Certificate of Project Work

This is to certify that

Miss Archana Ashok Raut of M.Com (Accountancy) has worked and duly
completed the Project Work titled “A Study on Impact of Goods and
Service Tax on Consumer Durable Goods” during the academic year 2019-
2020 under the guidance of Mr. Viral Chedda submitted on to
this college in fulfilment of the curriculum of MASTER OF COMMERCE
(Accountancy) UNIVERSITY OF MUMBAI.

This is a Bonafide Project Work and the information present is True and
original to the best of our knowledge and belief.

PROJECT EXTERNAL COURSE SEAL OF THE

GUIDE CO-ORDINATOR EXAMINER COLLEGE

2
 Declaration

I the undersigned Miss Archana Ashok Raut here by, declare that the work
embodied in this project work titled “A Study on Impact of Goods and
Service Taxon Consumer Durable Goods”, forms my own contribution to
the research work carried out under the guidance of Mr. Viral Chedda is a
result of my own research work and has not been previously submitted to any
other University for any other Degree/ Diploma to this or any other
University.

Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.

Name and Signature of the Learner

Archana Ashok Raut

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 Acknowledgment

To list who all have helped me is difficult because they are so numerous and
the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and

fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank my Principal, Dr. Anita Kanwar for providing the
necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator, Dr. Varsha Ganatra for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Mr.
Viral Chedda whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various

reference books and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers
who supported me throughout my project.

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 INDEX

CHAPTER NO. CHAPTER NAME PAGE NO.

1 Introduction
1.1 History, Meaning and Definition of tax 6-7
1.2 Reasons of Taxation 8
1.3 Goods and service tax (GST) 8-9
History, benefits, advantages and
1.4 8-14
disadvantages of GST
1.5 Features, Types of GST 14-15
1.6 Reasons for Implementation of GST 15-16
Why India Needs GST, GST Slab and
1.7 16-20
Structure of GST Rate, Tax Structure in India
1.8 Consumer Durable Goods 20-22
Growth and Demand for Consumer Durable
1.9 22-23
Goods
1.10 Impact of GST on Consumer Durable Goods 24-28
Positive impact of GST on Consumer Durable
1.11 29
Goods
1.12 Introduction to Industry on Durable Goods 29-32

2 RESEARCH METHODOLOGY
2.1 Research Problem 33
2.2 Research Objective 33
2.3 Hypothesis 34
2.4 Significance/Limitation of the study 34-35
2.5 Sample Area, Sample Size, Sample Method 35
2.6 Technique of Data Collection 35-36

3 LITERATURE REVIEW 37-40

DATA ANALYSIS AND
4 INTERPRETATION AND 41-53
PRESENTATION
5 CONCLUSION AND SUGGESTIONS 54-56
6 ANNEXURE 57-59
7 BIBLIOGRAPHY 60

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 Chapter 1

INTRODUCTION

1.1 Brief History of Taxation

Tax is today an important source of revenue for the Government in all countries. More than
3000 years ago, the inhabitants of ancient Egypt and Greece used to pay tax, consumption
taxes and custom duties. Income tax was first introduced in India in 1860 by James Wilson
who became Indian First Finance Minister.
Tax is mandatory liability for every citizen of the country. There are two types of tax in India
i.e. Direct and Indirect. Present Indian tax system is based on this ancient tax system which
was based on the theory of maximum social welfare.
According to Manu Smriti, the king should arrange the collection of taxes in such a manner
that taxpayer did not feel the pinch of paying taxes. He laid down that traders and artisans
should pay 1/5th of their profits in silver and gold, while the agriculturists were to pay 1/6, 1/8
and 1/10 of their produce depending upon their circumstances.
Taxes policy has been an important instrument for raise revenue, where it is the major source
of domestic revenue. It is also an important instrument for attaining a proper pattern of
resources allocation, distribution of income and wealth reduction of poverty among people
and economic stability, in order that the benefits of economic development are evenly
distributed.
Taxes play an important role for the development where the Government in all countries
depends on face the requirement of general expenditures by levy of taxes on the people.
Government uses taxation not only for the purpose of raising money to carry on with the
business of governance but also as an important fiscal tool for economic development.

Meaning of Tax
The word Tax came from the Latin Word “Taxo”, Tax are which means To asses or estimate.
A tax is a compulsory payment of money to pay to the Government by an Individuals or
Organization as the Government covers its expenses on various public functions, and is
interference in political, economic and society life without direct return of benefit to be
derived by the taxpayer. In other words, there is no direct return to the taxpayer for what he
pays, though public in general derives a common benefit. Thus, tax is a mandatory
distribution collected by the Government to meet the expenses of various public functions.

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Definition of Tax
According to the dictionary of Modern Economist:
“Taxation means “Compulsory levies on private individuals and organizations made by
Government to raise revenue to finance expenses on public goods and services and to control
the volume private expenditure in the economy.”
According to P.E Taylor:
‘A compulsory payment to Government without expectation of direct return in benefit to the
taxpayer is known as tax.

Distinction between direct and indirect tax

There are different implications of direct and indirect tax in the country. However, both the
taxes are important for the government as taxes include the major part of revenue to the
government.

Direct Tax Indirect Tax

1) When the liability to pay the tax and the 1) When the liability to pay a tax is on one
burden of tax falls on the same person the person and the burden of tax falls on the
tax is called as direct tax. It is paid by other person the tax is called as indirect tax.
Individuals, HUF, Companies etc. It is ultimately paid by the end consumers.
2) In case of direct tax burden of tax cannot 2) In case of indirect tax burden of tax can be
be shifted. shifted to end consumers.
3) It is paid after the income reaches in the 3) In indirect tax, taxes are paid before the
hand of the taxpayer. goods/services reaches the taxpayer.
4) Direct tax cannot be escaped because we 4) Indirect tax can be escaped simply by not
have to pay a tax on income. purchasing a commodity on which tax is
imposed.
5) Direct tax helps in reducing the inflation. 5) Indirect tax promotes the inflation.
6) The nature of the direct tax is progressive. 6) The nature of the indirect tax is regressive.
7) Example: Income tax, Capital gain Tax, 7) Example: GST, Excise duty, Custom duty,
Wealth tax etc. Service Tax etc.

History of Indirect Tax in India

When the British left India in 1947, the left India especially that of revenue
which hasn’t completely changed till now. The British then came up with the idea of
choosing India as their new market. But India was already self-sufficient with clothing. As
the British introduced machine made cloth in India, prices become a major problem to them
as they were costlier than Indian products. This made them to come up with the idea of “
Excise Duty” on goods manufactured in India.

7
When we got Independence in 1947 there was a lack of fund in the economy. At that time
Government needed funds for various purpose. So the excise duty was not abolished and a
new duty, custom duty was imposed on imports to provide protection to India Industries
across various sectors. Therefore, Indirect tax gained importance in India. The Modern
history of Indirect taxes starts from the early 20th Century while Excise duty was imposed on
Salt, Sugar etc. Thereafter a lot of taxes have been added to the taxation system in India
before GST was implemented.
Taxation is one of the essential elements in the working of the nation. The revenue
collected in the form of taxes is used for providing goods and services for public utility such
as infrastructure, transportation facilities etc. Indirect taxes are the taxes levied on the goods
and services on the basis of production, sale or purchase of goods or provision of services in
the form of export duty, sales tax, service tax etc. They are called indirect taxes as the burden
on tax is passed on the consumer unlike direct taxes which are supposed to be borne by the
person on whom taxes are levied. Indirect taxes are commonly used and imposed by the
government in order to generate revenue.
Goods and Service Tax was rolled out in India with effect from 1 st July 2017. GST
is one of the greatest tax reforms in India. It transforms the system of taxation and tax
administration into a digital world by adopting the latest information Technology. Customs
and GST are major Indirect Taxes in India.

1.2 What are the Reasons of Taxation?

1. Provide the basic facilities for every citizen of country.
2. Finance Government multiple projects and schemes.
3. Protection of Life.
4. Responsibility of citizen to the Nation.

1.3 GOODS AND SERVICE TAX (GST)

Introduction of GST:
GST is one indirect tax for the whole nation, which has made India one unified common
market.
GST is a single tax on supply of goods and services, right from the manufacturer to the
consumer. Credits of input taxes paid at each stage will be available in the subsequent stage
of value addition, which makes GST essentially a tax only on value addition at each stage.
The final consumer will thus bear only the GST charged by the last dealer in the supply
chain, with set-off benefits at all the previous stages.
Goods and Services Tax (GST) is an indirect tax (or consumption tax) imposed in India on
the supply of goods and services. GST is imposed at every step in the production process, but
is meant to be refunded to all parties in the various stages of production other than the final
consumer.

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Goods and Services are divided into five tax slabs for collection of tax- 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. 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. Pre GST the statutory tax rate for most
goods was about 26.5%, Post GST, most goods are expected to be in the 18% tax range.
The tax came into effect from July 1 2017, through the implementation of One Hundred and
First Amendment of the constitution of India by the Indian Government. The tax replaced
existing multiple flowing taxes levied by the central and state governments.
The Following erstwhile state and central taxes have been replaced by GST:
Central Taxes:
1. Central Excise Duty.
2. Service Tax.
3. Duties of Excise (Medicinal and Toilet Preparations).
4. Additional Duties of Excise (Goods of Special Importance).
5. Additional Duties of Excise (Textiles and Textile Product).
6. Additional Duties of Custom (Commonly known as CVD).
7. Special Additional Duties of Customs (SAD).
8. Central Surcharge and Cess .
State Taxes:
1. State VAT.
2. Central Sales Tax.
3. Luxury Tax.
4. Entry Tax (All forms).
5. Entertainment and Amusement Tax.
6. Taxes on Advertisements.
7. Purchase Entry Tax.
8. Taxes on lotteries, betting and Gambling.
9. State Surcharge and cess.
These were the taxes that was replaced by GST after the implementation of GST.

1.4 History of GST

 GST has been introduced in the country after a 13 years long journey since it was first
discussed in the report of the Kelkar Task Force on indirect taxes. A brief chronology
outlining the major milestones on the proposal for introduction of GST in India is as
follows:
 In 2003, the Kelkar Task force on indirect tax had suggested a comprehensive Goods
and Services Tax (GST) based on VAT principle.
 A proposal to introduce a National level Goods and Services Tax (GST) by April 1
2010 was first mooted in the Budget Speech for the financial year 2006-07.
 Since the proposal involved reform/ restructuring of not only indirect taxes levied by
the Centre but also the States, the responsibility of preparing a Design and Road Map

9
 for the implementation of GST was assigned to the Empowered Committee of State
Finance Ministers (EC).
 Based on inputs from Government of India and States, the EC released its First
Discussion Paper on Goods and Services Tax in India in November 2009.
 In order to take the GST related work further a Joint Working Group consisting of
officers from Central as well as State Government was constituted in September 2009.
 In order to amend the Constitution to enable introduction of GST, the Constitution
Bill was introduced in the Lok Sabha in March 2011. As per the prescribed procedure,
the bill was referred to the Standing Committee on Finance of Parliament for
examination and report.
 Meanwhile in pursuance of the decision taken in a meeting between the Union
Finance Minister and the Empowered Committee of state and Finance Ministers on
8th November 2012, a Committee on GST Design consisting of the officials of the
Government of India State Governments and the Empowered Committee was
constituted.
 This Committee did a detailed discussion on GST design including the Constitution
Amendment Bill and submitted its report in January,2013. Based on this Report , the
EC recommended certain changes in the Constitution Amendment Bill in their
meeting at Bhubaneswar in January 2013.
 The Empowered Committee in the Bhubaneswar meeting also decided to constitute
three committees of officers to discuss and report on various aspects of GST as
follows:
-
 Committee on Place of Supply Rules and Revenue Neutral Rates;
 Committee on dual control, threshold and exemptions;
 Committee on IGST and GST on imports.
 The Parliamentary Standing Committee submitted its Report in August 2013 to the
Lok Sabha. The recommendations of the Empowered Committee and the
recommendations of the Parliamentary Standing Committee were examined in the
Ministry in consultation with the Legislative Department. Most of the
recommendations made by the Empowered Committee and the Parliamentary
Standing Committee were accepted and the draft Amendment Bill was suitably
revised.
 The final draft Constitutional Amendment Bill incorporating the above stated changes
were sent to the Empowered Committee for consideration in September 2013.
 The EC once again made certain recommendations on the Bill after its meeting in
Shillong in November 2013. Certain recommendations of the Empowered Committee
were incorporated in the draft Constitution Bill. The revised draft was sent for
consideration of the Empowered Committee in March 2014.
 The 115th Constitutional Bill,2011 for the introduction of GST introduced in the Lok
Sabha in March 2011 lapsed with the dissolution of the 15th Lok Sabha.
 In June 2014 the draft Constitution Amendment Bill was sent to the Empowered
Committee after approval of the new Government. In December 2014 the constitution
bill 2014 seeking to amend the constitution to introduce GST and subsume State value
added tax, Luxury Tax etc was introduced in the Lok Sabha on December 19,2014 by
the Hon’ble Minister of Finance Arun Jaitley.
 In February 2015 Jaitley in his budget speech indicated that the government is looking
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to implement the GST system by 1 April 2016. In May 2015 the Lok Sabha passes the

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 Constitution Amendment Bill on May 06, 2015. In July 2015 the committee submit its
report to Rajya Sabha on July 22, 2015.
 In March 2016 Jaitley says that he is in agreement with the Congress’s demand for the
GST rate not to be set above 18%. But he is not inclined to fix the rate at 18%. In
future if the Government in emergency is required to raise the tax rate, it would have
to take permission of the parliament.
 In June 2016 the Ministry of Finance releases the draft model law of GST to the
public expecting suggestions and views in that draft model. In August 2016 the
opposition party finally agrees to the Government’s proposal on the four broad
amendments of the bill. The bill was passed in the Rajya Sabha. In September 2016
the bill was adopted by majority of State Legislatures wherein approval of at least
50% of the State Assemblies were required. In September 2016 the Hon’ble President
of India gives his consent for the Bill to become an Act on 8 September 2016.
 In the Year April 2017 Four Bills related to GST become Act. Following approval in
the parliament and the President’s assent
1. Central GST Bill
2. Integrated GST Bill.
3. Union Territory GST Bill.
4. GST (Compensation to States) Bill.
The GST Council also finalized the GST rates and GST rules. The Government then declared
that the GST will be applicable from 1st July 2017.

Taxes Imposed by the Government:

To provide Basic Facilities for every citizen of the country: Whatever money is
received by the government in terms of direct tax and indirect tax is spent by it for the
welfare of the citizens of the country. Sone of the services provided by the
government are health care, electricity, roads, education system, free houses for poor,
water supply, police fire fighters, judiciary system, disaster relief, taking care of
bridges and other things of public welfare.

1. To finance Multiple Governments: All the local government of the state like
village panchayats, block panchayats and municipal corporations receive fund
from the state finance commission.

2. Protection of the Life: Taxpayers receive the protection of life and wealth from
the government in case of external aggression, internal armed rebellion or any
other situation in exchange of tax paid by them.

3. Dissatisfaction with Taxes: We often hear that there are so many scams in the
country which confiscates the precious public money. There are so many other
reasons because of them taxpayers are angry.

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 BENEFIT OF GST

For Central and State Governments

 Simple and Easy to administer: Multiple indirect taxes at the Central and State
levels are being replaced by GST. Backed with a robust end to end IT system, GST
would be simpler and easier to administer than all other indirect taxes of the Centre
and State levied so far.
 Better Controls on leakage: GST will result in better tax compliance due to a robust
IT infrastructure. Due to the seamless transfer of input tax credit from one stage to
another in chain of value addition, there is an in-built mechanism in the design of
GST that would incentivize tax compliance by traders.
 Higher revenue efficiency: GST is expected to decrease the cost of collection of tax
revenues of the Government and will therefore lead to higher revenue efficiency.

For the Consumers

 Single and transparent tax proportionate of the value of goods and services : Due
to multiple indirect taxes being levied by the Centre and State with incomplete or no
input tax credits available at progressive stages of value addition, the cost of most
goods and services in the country today are laden with many hidden taxes. Under
GST, there would be only one tax from the manufacturer to the consumer leading to
transparency of taxes paid to the final consumer.
 Relief in overall tax burden: Because of efficiency gains and prevention of leakages,
the overall tax burden on most commodities will come down, which will benefit
consumers.

Advantages of GST:
1. Convenient:
Indirect taxes are imposed on production, sales and movements of goods and services.
These are imposed on manufacture, sellers and traders but their burden may be shifted
to consumer of goods and services who are the final taxpayers. Such taxes in the form
of higher prices, are paid only on purchase of a commodity or the enjoyment of
services. So, taxpayers do not feel the burden of these taxes. They are generally as a
lump sum from manufacturers or traders.

2. Wide Coverage:

Unlike direct taxes, the indirect taxes have a wide coverage. Majority of the product
or service are subject to indirect taxes. The consumers or users of such product must
pay taxes.

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3. Elastic:

Some of the indirect taxes are elastic in nature. When government feels it necessary to
increase its revenues, it increases these taxes. In times of prosperity indirect taxes
produce huge revenue to the government.

4. Difficult to evade:

Indirect taxes have in build safeguard against tax evasion. The indirect taxes are paid
by customers, and the seller must collect it and remit it to the government. In the case
of many products, the selling price is inclusive of indirect taxes. Therefore, the
customer has no opportunity to evade the indirect taxes.

5. Social Welfare:

The indirect taxes promote social welfare. The amount collected by way of taxes is
utilised by the government for social welfare activities, including education, health
and family welfare. Secondly very high taxes are imposed on the consumption of
harmful products such as alcoholic product, tobacco product and such other products.
So, it is not only to check their consumption but also to enable the government to
collect substantial revenue in this manner.

6. Flexibility:

The indirect taxes are more flexible. Flexibility is the ability of the tax system to
generate proportionality higher tax revenue with change in tax basic.

7. May not affect motivation to work and save:

The indirect taxes may not affect the motivation to work and to save. Since most of
the indirect taxes are not progressive in nature, individuals would not be demotivated
to work and to save which may increase investment.

Disadvantages of GST:

1. High cost of collection:

Indirect tax fails to satisfy the principle of economy. The government has to set up to
elaborate machinery to administer indirect taxes. Therefore, cost of tax collection per
unit of revenue raised is generally higher in case of most the indirect taxes.

2. Affects consumption:

Indirect taxes affect consumption of certain products. For instance, a high rate of duty
on certain product such as consumer durables may restrict the use of such products.
Consumers belonging to the middle-class group may delay their purchases or they
may not buy at all.

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 3. Increase income inequality:

Generally indirect tax is regressive in nature. The rich and the poor have to pay the
same rate of indirect taxes on certain commodities of mass consumption this may
further increase income disparities among the rich and the poor.

4. Lack of social consequences:

Indirect taxes do not create any social consequences as the taxpayers do not feel the
burden of the taxes they pay.

5. Uncertainty:

Indirect taxes are often rather uncertain. Taxes on commodities with elastic demand
are particularly uncertain, since quantity demanded will greatly affect as prices go up
due to the imposition of tax. In fact, a higher rate of tax on a particular commodity
may not bring in more revenue.

6. Inflationary:

The indirect taxes are inflationary in nature. The tax charged on goods and services
increase their prices. Therefore, to reduce inflationary pressure, the government may
reduce the tax rate, especially on essential item.

7. Possibility of tax evasion:

There is a possibility of evasion of indirect taxes as some customers may not pay
indirect taxes with the support of sellers. For instance, individuals may purchase items
without a bill and therefore, may not pay GST or may obtain the services without a
bill and therefore may evade the service tax.

1.5 Features of GST:

1. Dual Tax Structure:
 Centre and State both will levy tax on every transaction related to supply of
goods/ services.
 Tax to be levied by Centre and States to be called Centre GST (CGST) and State
GST (SGST)

2. Integrated GST on inter-state supplies:

 Centre to have exclusive power to levy IGST on inter-state supplies

 It will be called Integrated GST (IGST)
 Revenue would be share between Centre and Consumption State.

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 3. Supply without consideration:

 Supply between two distinct establishments of same legal entity taxable even
without consideration.
 Supply of goods between agent and principle taxable.
 ‘Gifts’ by employer and employee for an amount exceeding INR 50,000 taxable.

4. Imports/Exports:

 Imports will be treated as inter-state supplies and would attract IGST, apart from
BCD on goods.
 Exports to be zero rated.

5. Exemption/Concessions:

 Exemption to various goods and services.

 Existing incentive schemes to be converted to ‘reimbursement route’.
 Certain petro products though in GST, would continue to attract present taxes,
GST to be activated at a later date.

6. Compliance/Tax Administration:

 Online system for tax compliances.

 GST Facilitation centres, GSPs, ASPs to assist tax payers for tax filings
registration etc.

GST is the single tax on the supply of goods and services, right from the manufacturer
to the consumer.

1.6 REASONS FOR IMPLEMENTATION OF GST

1. The main reason behind implementation of GST is to replace the current

consumption tax i.e Service Tax and Sales Tax. And to remove the bundled indirect
tax such as VAT, Excise, CST etc.

2. There was no uniformity in tax rate. GST will bring in uniform taxation of Goods
and Services throughout the country. It will remove cascading effects that is “ Tax on
Tax”.

3. Also the motive was to reduce the effect of tax of goods and services and to create a
co-operative Indian market to make the economy stronger.

4. The GST will cut down large number of taxes imposed by the central government
and state government.

5. The dealers who are into business work will have to pay only GST instead of
spending a lot of time in legal advice and compliance. GST will have a far reaching
impact on almost all aspects of business operations in the country.

16
 6. It will also reduce the burden of common man i.e public will have to spend less
money to buy the same products that were costly earlier.

7. There will be more transparency in the system as the customers will know exactly
how much taxes they are being charged and on what basis.

8. It will also provide credit for the taxes paid by the producers in the goods and
services chain. This is expected to encourage the producers to by raw materials from
different registered dealers.

This are some of the reasons for implementation of GST and benefit of GST after
implementation.

1.7 WHY INDIA NEEDS GST

Simple
Tax
Structur
More e Increase
Transpar- in Tax
ency Revenue
Why India
Needs GST

Competit-
Boost to
ive
Exports
P ricing
Reduce
Burden

1. Simple Tax Structure: There are huge number of taxes at present that the consumers
have to pay, with introduction of GST the consumers will have to pay only one tax
which will be much easier for the consumers to understand.

2. Increase in Tax Revenue: Simple tax structure will increase the tax revenue of the
government. And it will also be helpful for the economic growth of the country. It will
also improve the overall development of the country.

17
 3. Competitive Pricing: GST will eliminate all the other indirect tax such as VAT, sales
tax, excise etc. It will also help in the reduction of tax amount paid by the consumers.
As in economy reduction in price will increase the demand for consumption for the
product and will increase the consumption for goods which will benefit the companies.

4. Reduce Burden: GST will help to reduce the burden of the common man. After the
introduction of GST they will have to pay less money on the same product which was
costly earlier.

5. Boost to exports: GST will bring in boost to exports. As the reduction in cost will help
the Indian economy in more numbers of foreign players to enter the market which will
result in benefit to the Indian market.

6. More Transparency: There will be more transparency as the customers will know
exactly how much taxes have been paid by them and on what basis. It will help the
consumers to pay Tax on Tax as they will have to pay only tax which will help the
consumers.

GST Slab and Structure of GST Rates

Tax Rate Indicative Items
0% No tax will be imposed on items like Daily
consumption items like fresh fruits and
vegetables, fresh meat, egg, butter, judicial
paper, printed books, handlooms etc.
5% Mass consumption items like species, frozen
vegetables, coffee, tea, medicines, sugar,
kerosene, brochures, building bricks etc will
attract tax of 5percent
12% Frozen meat products, Ghee, Butter, picture
books, coloring books, sewing machine,
umbrella, dry fruits in packaged form,
cellphones etc will attract tax of 12 percent.
18% Most items are under this slab rate which
include Hair oil, Soap, Mineral water, Ice
cream, pastries and cake, instant food mixes,
steel products, flavoured refined sugar, camera,
speakers, and monitors.
28% White goods, Cars, pan masala, aerated water,
washing machine, vending machines, shavers,
hair clippers, aircraft for personal use ,
motorcycles, automobiles, refrigerators etc will
attract tax of 28 percent.

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 Tax Structure in India

Tax
Structur
e

Indirect Tax =
Direct Tax GST (Except
customs)

Income Tax Intra Inter

State State

CGST SGST UTGST IGST

Goods Supplied
or Services
Provided

Intra State Inter State

(Within the (Outside the State OR
State) between two states

IGST (Intergrated GST) &

CGST SGST Additional Tax*
(Central State) (State GST)

 Intra-State supply of goods or services is when the location of the supplier and the
place of supply i.e. location of the buyer are in the same state. In Intra-State
transactions, a seller has to collect both CGST and SGST from the buyer. The CGST
gets deposited with Central Government and SGST gets deposited with State
Government.

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  Inter-State supply of goods or services is when the location of the supplier and the
place of supply are in different states. Also, in cases of export or import of goods or
services or when the supply of goods or services is made to or by a SEZ unit. The
transaction is assumed to be Inter-State. In an Inter-State transaction, a seller has to
collect IGST from the buyer.

Types of GST

CGST

Central Goods and Service Tax.

CGST refers to the Central GST tax that is levied by the Central Government of India on any
transaction of goods and services tax taking place within a state. It is one of the two taxes
charged on every intrastate (within one state) transaction. the other one being SGST (or
UTGST for Union Territories). CGST replaces all the existing Central taxes including
Service Tax, Central Excise Duty, CST, Customs Duty, SAD etc. The of CGST is usually
equal in the SGST rate. Both taxes are charged on the base price of the product. See the
example below to understand it better.

e.g. – In this example when Suresh (Rajasthan) wants to sell a product to Pradeep in the same
state (Rajasthan), he has to pay two taxes. CGST is for the central government while SGST is
for the state government. The rate of CGST is 9% same as SGST. After the application of
CGST (9% of Rs. 10,000), the CGST amount will be Rs 900. The final cost of the product
will become Rs. 10900.

SGST

State Goods and Service Tax.

SGST (State GST) is one of two levied on every intrastate (within one state) transaction of
goods and services. The other one is CGST. SGST is levied by the state where the goods are
being sold/purchased. It will replace all the existing state taxes including VAT, State Sales
Tax, Entertainment Tax Luxury Tax, Entry Tax, State Government is the sole claimer of the
revenue earned under SGST. Lets’s understand this with an example.

e.g. - Suresh from Rajasthan wants to sell some goods to Pradeep in Rajasthan. The product
originally priced at Rs. 10,000 will attract GST at 18% rate comprising of 9% CGST rate and
9% SGST rate. The SGST tax amount here is Rs. 900 (9% of Rs. 10,000) which is fully
claimed by the Rajasthan State Government. The Rate of the Product after SGST will be Rs.
10900.

IGST

Integrated Goods and Service Tax.

Integrated GST (IGST) is applicable on interstate (between two states) transactions of goods
and services, as well as on imports. This tax will be collected by the Central government and
20
will further be distributed among the respective states. IGST is charged when a product or
service is moved from one state to another, IGST is in place to ensure that a state has to deal
only with a Union government and not with every state separately to settle the interstate tax
amounts. Let’s try to understand IGST with an example.

e.g. – Rakesh is a manufacturer in Maharashtra who sold goods worth Rs. 10,000 to Suresh in
Rajasthan. Since it is an interstate transaction, IGST will be applicable here. Let’s assume the
GST rate is 18% for the particular item. So, the IGST amount charged will be Rs. 1800 (18%
of Rs. 10,000), and the refined rate of the product will be Rs. 11,800

UTGST

Union Territory Goods and Service Tax.

Union Territory goods and service tax refers to a tax levied on intra-state supply of goods and
services together with tax charged under CGST Act 2017. These goods and services do not
include supply of alcoholic liquor for human consumption. Further more it is charged at a rate
of not exceeding 20% which is notified by the central government. It is applicable on the
goods and services supply that takes place in the seven Union Territories of India which are
Delhi, Jammu and Kashmir, Puducherry, Andaman and Nicobar islands, Chandigarh, Dadra
and Nagar Haveli and Daman and Diu, Lakshadweep, Ladakh. This UTGST will be charged
in addition to the Central GST. The reason why a separate GST was implemented for the
Union territory is that the common State GST cannot be applicable in a Union territory
without a legislature.

e.g- Navin is a manufacturer in Chandigarh who sold goods worth of Rs 100000 to Sanjay in
Chandigarh. Let’s assume the GST rate is 18% for the particular item. Since the transaction is
taken place in the Union territory CGST + UTGST will be applicable in this example. So the
amount charged will be (9000 CGST + 9000 UTGST).

1.8 Consumer Durable Goods

While good players were previously taxed at 27 per cent (including 13.5 per cent VAT)
against 28 per cent under the new GST regime.

However, market analysis do not see any significant impact on the margins of the consumer
durable companies post GST implementation.

21
India is the second largest consumer market in the world. The Indian consumer profile has
been developed and changed in terms of education, income, occupation and reference group
and media habits. There is a shift in consumer brand preference for durables products for the
past decade with the influx of modern technology. The consumer buying preferences are
rapidly changing and moving towards high-end technology product with acculturation.
Products which were once considered luxury items have become a necessity because of the
changing lifestyle and rising income levels. With growth in disposable incomes, the demand
for high-end products such as television, washing machine, refrigerator and air conditioners
has increased considerably. It is also facilitated by the easy availability of finance and
prevalence of nuclear families. Increasing in demand of consumer durable in the market the
fall in prices as Indian consumers are continuing to attach a high degree of importance to
value for money. The consumer is brand-conscious but not necessarily brand-loyal and might
even pick up a reliable private label if it offers good price and quality values.
Consumer durable penetration is one of the lowest in India and the untapped potential is
evidently enormous. Both manufacturers and traders would be compelled to explore every
conceivable method to improve operational efficiencies, in order to achieve substantial and
profitable business growth. The Indian consumer durables market has undergone a major
transformation since the liberalization process, initiated in 1991. The market size, product
penetration, the variety and technology of products sold, have all experienced a quantum
leap. Improved product choice and decline in real prices, matched by increased consumer
incomes have driven the market growth rate to dizzy heights. Now brands are becoming the
most valuable assets that businesses ca possess. The marketers are facing lot of challenges
regarding differentiation which is valued by the customers. Brands in this context are new
business warriors Brands are wealth generators of the twenty first century. Products are not
differentiated in the factories, but brands are differentiated in the customers mind. Brands are
capable of transforming mundane products into objects of desire. Accordingly, the market
value of a business is determined by the number and types of brads it holds. Today is a
competitive market, the question is about the survival of the company in the market. The
answer is survival of companies by branding. The proper strategy of branding panning is

22
needed to achieve revenue, sales, quality and market share. A good strategy differentiates one
company’s brand form the other competitor’s brand.

Majority of the items from the consumer durables sector are taxed at 28 per cent under the
final goods and services tax (GST) rates that were announced on Thursday. According to
industry experts, some of the items - belongings to the lower price bands - might be taxed at
18 per cent, considering their mass nature.

Mobile handsets assembled in India, especially smartphones are taxed much lower at present.
Majority of the large vendors have opened facilities here to avail various tax sops provided
by the central government through the modified special incentive package scheme and by
local authorities.

This is definitely a good sig and a positive development for the consumer durables sector.
Lower tax will also add to growth of the overall industry and they will be passed on to the
consumers. These are early phases, but GST was long awaited, and the industry would keenly
observe the future developments, said Kanwal Jeet Jawa, CEO and Managing Director of
Daikin India.
According to experts, the biggest benefit that the GST will bring in is reduction in
complications related to taxation. The consumer durables sector is considered inventory
heavy and inter-state transportation of goods lead to complications in taxation.

1.9 Growth and demand for consumer durable goods

1) Rise in Disposable Income:

The demand for consumer durables has been rising with the increase in disposable income
coupled with more and more consumers falling under the double income facilities. Also, the
growing Indian middle- class plays a major role in increasing the demand. This, along with a
fall in the prices of durable goods mainly due to the advancement of technology, easy import
of components has led to an increase in the consumption on durable goods.

2) Easy availability of consumer financing:

Apart from steady growth in income of consumers, consumer financing has become a major
driver in the durables industry. In the case of more expensive consumer goods, such as
refrigerators, washing machines, colour televisions and personal computers, retailers are
marketing their goods more aggressively by providing easy financing options to the
consumers by partnering with banks. The easy-availability of consumer financing is
beneficial mainly for the lower- and middle-income group especially when the cost of capital
and flexibility of the scheme is in their favour.

23
3) Existing Potential in Rural Markets:

Growth is coming in a big way from the smaller towns and rural markets and is expected to
be the next growth opportunity for the consumer durables market. In the last year ~30-35% of
the total sales of consumer durables was from the rural market. This is expected to grow by
40- 45% in the near future. The rural durables market has been growing by ~30% annually,
mainly due to the growing affordability of products as well as the general buoyancy in the
economy. Products like mobile phones, television and music system are the ones which have
witnesses high growth among the rural market. To further cater to this market many
manufacturers have started using local languages while offering products to the rural crowd.

4) Increasing share of Organized Retail:

Since the last couple of years there has been an increasing shift towards organized retail
(brands) from the unorganized (unbranded) products. With rising income and purchasing
power, and the younger generation preferring branded products, the share of organized
shopping is increasing. Shopping in malls is considered more of an experience these days.
According to estimates, organized retail which constituted ~4% of the total buying till 2010,
is expected to grow to over 10% by 2013.

5) Entertainment and Media to boost growth:

According to a recent report by KPMG, the Indian Media & Entertainment (M&E) industry
registered a growth of 11% over 2009 and touched Rs. 652 billion and is expected to achieve
a 13% growth in 2011. Overall, the industry had a CAGR of 14% to touch Rs. 1275 billion by
2015. Out of this, the television industry is expected to achieve a 16% CAGR and is expected
to account for almost half of the Indian M&E industry revenues. The high-end flat panel TV,
LCD TVs and Plasma TVs. All of these were expected to register a 100% plus growth in the
last year. Hence, the growing importance of entertainment and media on our lifestyles is
expected to boost the demand for products like Plasma TVs, LCDs, DVD Players.
It was estimated to be around 76400 crore in FY 19-20 which logged a growth rate of
about 10%. The consumer durable industry returned to a steady growth path in 2019 after
almost two flat years but might not be able to repeat the same in the coming year.

6) Consumer Preferences:

Consumers purchase goods by looking at the brand, pricing and discount schemes available at
the time of buying. So, for the consumer durables industry following are important growth
drivers:

 Availability of new and innovative products – A company that upgrades its

technology and comes out with new and innovative products catches the attention of
consumers. Especially in the consumer electronics segment, manufacturers have to
make sure they are updated with the latest technology that has entered the market. For
the higher income groups the brand, technology and the product features play an
important role.

 Pricing of the products – For the lower- and middle-income groups, price is the
deciding factor especially in a price-sensitive industry like consumer durables.
24
  Festive discount schemes – The sales of many consumer durables goods are driven by
festive discounts. For example, people consider it auspicious to purchase goods like
LCDs, Televisions, Washing Machine etc during festivals like Diwali, Gudi Padwa
etc.

1.10 IMPACT OF GST ON CONSUMER DURABLE GOODS

White goods, including refrigerators, air-conditioners and washing machines, are taxed at 28
per cent under GST. Currently, the rate is about 27 per cent (could be higher for States that
charge VAT of over 13.5 per cent).

Manufacturers may only see benefit, as input tax credit will reduce their total tax out go.
They can take credit for tax paid on inputs. There is full credit available for service tax paid
on advertisements.

Players in the organised space in kitchen appliances may see market share go up as the price
difference between branded and unbranded items reduces. This is because, one there will be
more companies who come under tax net (GST is applicable to companies where turnover is
over ₹20 lakh, under the current regime the threshold is ₹1.5 Crore) and two, any retailer who
bills his customer will want to take input credit and insist that his supplier too pays his share
of tax.

TTK Prestige, pays about 12 per cent on indirect taxes for pressure cookers and under GST
too, it is at 12 per cent. It is in mixer-grinders that the company will see impact. Currently, on
mixer-grinders, the pays tax of only about 14 per cent ((unit is in excise free zone); under
GST this is set to rise to 28 per cent.

Cable makers, including V-Guard Industries and Havells could be impacted as the indirect
tax rises from about 18 per cent to 28 per cent. But, given that they will claim input tax credit,
they will not suffer much. But the end-consumers – who would be home buyers and builders
– will see immediate price increase.

In the cables market too, a good share (about 40 percent) I with unorganised players. But,
given that the tax rate has gone up under GST, more players may look to evade taxes now
than earlier.

Earlier, white goods – home appliances and consumer durables – attracted excise duty of
12.5% and a VAT of 12.5% to 14.5% in most states across the country. In other words, as a
household consumer, we used to pay about 26.6% 28.8% tax on white goods, taking into
account the cascading nature of taxes. In certain cities such as Mumbai, the tax was higher
still, as an additional octroi of 5% was charged on consumer goods, increasing the price for
the end user

The cascading nature of taxes was burden on the working capital of all players across the chain
– dealers and retailers. VAT was levied on a cost, which included the excise component and
the brunt of this double taxation was borne both by the dealers and finally by the end
consumer. Also, previously, there was a demarcation between big and small home appliances.
25
While bigger appliances such as television, air conditioner, refrigerator and washing
machine were

26
conventionally placed at a higher VAT rate in most states; Smaller home appliances such as
electric irons mixer grinders ad juicers were placed at lower VAT rates.

Under GST

Under GST, all white goods have been rated at 28%. Comparing the pre-GST rates with the
post-GST rates, there is indeed a slight increase in the tax by a few percentage points of 2 to
3% - which should not really affect the appliance buying trends overall. However, the high
GST rate hasn’t gone down well with small appliance makers – their primary grievance being
that electric irons, mixer grinders, juicers and air coolers have now been equated with other
bigger white goods, such as refrigerators and air conditioners.

Again, if we consider the nature of goods and services which have been categorised under the
various tax rates – the highest rate of 28% is being levied on luxury products. This too has
emerged as a point of contention from several quarters who feel that products such as
refrigerators and washing machines, in the day and age are no longer items, but rather
necessities and could have been rated at 18%. Consumer durable makers welcomed the
government move to bring AC, washing machine and refrigerator in lower slab rate saying
that it will act as a catalyst for the industry. The industry was demanding for lower GST rate
on white goods since July last year. It was decided to reduce rates on several general used
items like TV, washing machine and refrigerators from 28 to 18 percent. The reduction of
GST slab rate on Television setups up to 26 inches from 28 percent to 18 percent has
increased the products penetration and affordability in smaller towns.

Thus, it was a given, that tax rates were anyway going to increase post GST. If that was the
case, why was the need for white goods manufacturers to extend discounts – when anyway
there should have been a natural demand to buy before GST set in, Let’s try to demystify the
same.

Impact of GST on consumer durables:

The consumer durables industry is expecting only marginal price revision despite the
category being placed under the highest tax slab of 28 per cent under GST, as players look
forward to festive season in the coming months. The festive season accounts up to 35 per cent
of the consumer durables sales. “In the short-to-mid-term, I see the fundamentals remaining
the same. Though consumer durables industry is being taxed at 28 per cent, which is slightly
more than what the previous tax structure, I don’t anticipate any major price increases in the
coming months,” BSH Household Appliances MD Gunjan Srivastava told PTI.
The tax rate for the sector was around 25-27 per cent, which has been hiked to 28 per cent
GST. “I expect the prices to remain constant at least in the initial period before people
understand what how much the additional cost is. But that would take some time for people
to accurately measure. We are also approaching the festival season, so the industry will like
to moderate it, “he added.

Implementation of GST has led to the replacement of a plethora of Central-level taxes (i.e.
excise duty, countervailing duty, Central sales tax and services tax) and state-level taxes
(Value
27
Added Tax, octroi and entry tax, local body tax, luxury tax etc). As a result, the rate arbitrage
prevalent under the pre-GST period which impacted the consumer behaviour from state to
state has become uniform upon implementation of GST. This has led to consistency in
product pricing across all states which has immensely benefitted the business supply chain
network and eased out operational and pricing issues on a state-level basis. Further, the tax
structure under GST has been divided into five slabs – that is, 0%, 5%, 12%, 18% and 28%
(proposed for ‘luxury’ goods) – along with compensation cess on specific categories of
goods. The slab rate of 28% rate category comprised all major consumer electronics, namely
ACs refrigerators, TVs and washing machines. However, in light of industry representation
and growing consumption patterns, the GST Council decided to rationalise the tax rate on
many consumer electronics (including refrigerators and washing machines).

Durable Products

Consumer Durables refer to those consumer goods that do not quickly wear out yields utility
over a long period of time. The consumers durables products can be broadly classified into 2
segments
1. Consumer Electronics.
2. Consumer Appliances.

Consumer appliances are further classified into white goods and Brown goods.

Consumer Durables
White Goods Brown Goods Consumer Electronics
 Refrigerators  Mixer  Mobile Phones
 Washing Machine  Grinders  Colour Television
 Air Conditioners  Microwave Oven  VCD Players
 Television  Electric Fans  DVD Players

GST Impact on Home Appliances

The entire nation has set themselves on a separate mode for witnessing the after
affects of GST, as the new tax regime was implemented in all spheres, pushing the prices to
rise further. However the GST council has made multiple changes in the tax slabs.

Pre- GST taxes used to levy on account of central excise duty rates, VAT rates,
Octroi, Entry Tax and among others. GST rates for consumer goods including washing
machine, refrigerators, TV, video games, mixer grinder, hair dryer, water cooler, water
heaters slashed from 28 percent to 18 percent.

1. GST Impact on Television:

The goods and service tax council has brought down tax rate on TV with screen sizes
of up to 32 inches to 18 percent from 28 percent. Earlier only up to 26 inches sized
TV had been put in the 18 percent tax slab. The GST council has also reduced tax rate
from to 18 percent from 28 percent of digital camera, video camera etc.

28
 Television Type Before GST After GST Difference
LG OLED 30 Lakh 31.5 Lakh 5% Increase
Samsung LED TV 24.99 Lakh 26.24 Lakh 5% Increase

All the prices are estimates taking into account 28% GST. Now the rate has been
reduced to 18%. Television industry in India have reached to Rs 660 billion in the year 2018
and is expected to reach Rs 862 billion till the year 2022. Number of TV households in India
is expected to reach 200 million till 2021. The drop in the duty from 28 percent to 18 percent
in TV segments is definitely a welcome move to the industry.

2. GST Impact on Refrigerators:

Consumer appliances like refrigerators, washing machine and other essentials will
now cost 7-8 percent less. The revision of this percent will make refrigerators and
washing machine more affordable which will accelerate the penetration of these
appliances across India. This in turn will lead to a spur in demand which ill lead to
increase in production and hence have a positive impact. LG company has revised the
prices of its 335 litre frost free refrigerators from Rs 46490 to Rs 42840 a price drop
of 8.5 percent. On the other hand Godrej 190 litre direct cool refrigerators in now
priced 7.8 percent lower at Rs 15257 against 16550 earlier. Lets check out the rate
variation on some brands of the refrigerators before GST was implemented and after
the implementation of GST.

Refrigerators Price before GST Price after GST Difference

Type
Samsung 2.65 Lakh 2.78 Lakh 4.90% Increase
RF28K9380SG
LG GR- 3.35 Lakh 3.51 Lakh 4.77% Increase
D35FBGHL
Whirlpool 28925 30371 4.99% Increase

Earlier refrigerators were into 28 percent tax rate but now it has been reduced to 18
percent. Refrigerators market in India was estimated at around 19500 crore and is expected to
reach Rs 344 million. Production of refrigerators in India increased to 3 percent year on year
in FY 18.

3. GST Impact on Air conditioners:

Air conditioners are considered luxury products and taxed at 28% under the GST
regime. Since a lot of part of air conditioners are imported from abroad, they are
required to pay custom duty. During FY 18 production of air conditioner in India
increased 4.9 percent. The government has not changed the rate of air conditioner as
many of the parts are brought from abroad. About 5 million air conditioners are sold
every year in India. Before GST the tax scenario on air conditioners was 23% and
now after the implementation of GST it has been increased to 28%. Lets check out the
rate variation on some brands of the air conditioners before GST was implemented
and after the implementation of GST.

29
 Air Conditioners Price before GST Price After GST Difference
Brand
Blue Star Ton 5 Rs 39000 Rs 40950 5% Increase
Voltas All Weather Rs 40490 Rs 42515 5% Increase
Hitachi 1.5 Ton Rs 28485 Rs 29909 5% Increase

As a result after implementation of GST customers had to pay 2.5% to 5% more on

air conditioner. The price of Blue star ton 5 before GST which was costing for Rs
39000 jumped to 40950 after implementation of GST. Same with the air conditioner
of Hitachi 2.00 ton earlier the price was 62000 and now the same has increased to
64480. This is the impact of GST on air conditioners.

4. Impact of GST on Washing Machine:

The current rate of GST on washing machine is under 18% tax bracket. Production of
washing machine appliances in India has increased to 5.1 percent in the FY 18. Fully
automatic washing machine are increasing share on the market due to reduction in
price and higher disposable income. The rate of GST till 27/07/2018 was 28 percent
and after the revision in the GST council held on 21st July 2018 with effect from
27/07/2018 the rate has been reduced to 18 percent. Lets check out the rate variation
on some brands of the washing machine before GST was implemented and after the
implementation of GST.

Washing Machine Price before GST Price After GST Difference

Brand
Godrej top loading Rs 23570 Rs 24737 4.95% Increase
Washing machine
Premium IFB Rs 48980 Rs 51292 4.72% Increase
Front Loading
Semi Automatic Rs 15275 Rs 15991 4.69% Increase
Washing Machine

As a result after the implementation of GST consumers have to pay 4-5% more on washing
machine. With the revision of the rates from 28 to 18 percent it has increased the production
and hence also have a positive impact. As a result after the revision of the rates there is a
positive impact in the production of washing machine.

5. GST Impact on Microwave Oven:

The rate of GST on Microwave Oven is covered under 18 percent tax rate. Earlier the
same was charged in 28 percent tax rate. This has created a positive impact and also
has increased the production. Lets check out the rate variation on some brands of the
washing machine before GST was implemented and after the implementation of GST.

Microwave Oven Price before GST Price After GST Difference

Brand
LG All in one Rs 33420 Rs 35986 4.55% Increase
Microwave
Godrej Inst cook Rs 20610 Rs 21636 4.98% Increase
Convention

30
 Jet Chef Rs 32990 Rs 34640 5% Increase
33Convention

As a result after the implementation of GST consumers have to pay 4-5% more on
microwave oven. Earlier Godrej Inst cook Convention was charged for Rs 20610 and after
the implementation of GST the price have been increased to 21636. The prices of all
microwave oven increased because of GST. But after the revision of the rate from 28 percent
to 18 percent it created a positive impact.

This are some of the impact of GST on various Consumer Durable Goods.

1.11 POSITIVE IMPACT OF GST ON CONSUMER DURABLE

Consumer Durables

The passing of the goods and services tax bill is big plus for the consumer durable industry as
also for makers of building materials such as tiles, ply board and sanitary ware.

First, by reducing the net tax outgo, the new tax regime has lower end-prices of products.
Given, that all these industries are looking for a demand-push, the manufacturers are likely to
pass on the price benefit. This will stoke revenue growth. Secondly, the GST regime will
reduce the price differential between products of organised players and those of their
competitors in the unorganised space. In tiles and ply boards for instance, the price difference
between unbranded and branded goods is almost 10-15 per cent. So, as the new tax is
implemented, more consumers may shift to branded products as the price difference reduces
– this is a major advantage for players such as Kajaria Ceramics, Somany Ceramics, Cera
Sanitaryware and Greenply in the listed space.

The other plus of the new tax which players such as Havells India and Whirlpool of India
have highlighted is that it will reduce their logistics and inventory handling costs. Share of
roads in freight traffic in the country is 72 per cent, indicates the economic survey data of
2015. Thus, as GST replaces the central sales tax on inter-state sale of goods and several
other levies, costs for manufacturers will come down It will help companies save on
investments in manufacturing facilities too. Currently, goods produced within a state attract
lower tax than those produced outside. This forces companies to consider setting up of
manufacturing near all their different markets.

1.12 Introduction to Industry

Consumer durables are a category of consumer products that do not have to be purchased
frequently because they are made to last for an extended period of time (typically more than
three years). They are also called durable goods or durables.

The consumer durables industry can be categorized into two segments:

 Consumer electronics (brown goods) – such as televisions, laptops, cameras, computers, and
audio systems.
 Consumer appliances (white goods) –washing machines, kitchen appliances, microwave
ovens, cleaning equipment, air conditioners, and fans.

31
Imports and Exports

India imports televisions, refrigerators, and air conditioners mainly from China and Southeast
Asia. India also imports from Japan, Indonesia, Malaysia, and Taiwan. Top component
imports include compressors, evaporator coils, condenser coils, air conditioning and
refrigerator chemicals (refrigerants), motors, LCD or LED panels, semiconductors, and
electronic components. India’s consumer durables exports include refrigerators and
refrigerating equipment compressors, colour TVs, air conditioner parts and compressors, and
fully automatic washing machines. The U.A.E. is a major export location. The majority of
white goods are exported to the South Asian Association for Regional Cooperation (SAARC)
nations, countries which border India.

Some top domestic companies in India and their products include:

Blue Star – central air conditioners, room air conditioners, commercial refrigerators, cold
storages, and specialty cooling products such as process chillers and mortuary chambers.

Godrej Group – refrigerators, air conditioners, washing machines, DVD players, microwave
ovens, audio-visual products, and digital-imaging products.

Onida Electronics – televisions, washing machines, air conditioners, microwave ovens, and
mobile phones.

Videocon Industries Limited – televisions, DVD players, microwave ovens, refrigerators,

washing machines, air conditioners, and power backup.

Top foreign companies active in India’s consumer durables sector include:

Whirlpool Corporation (U.S.) – home appliances such as refrigerators, washing machines,

microwave ovens, water purifiers, and power backup.

LG Electronics (South Korea) – televisions, audio-visual solutions, computers, mobile

phones, refrigerators, washing machines, microwave ovens, air conditioners and vacuum
cleaners.

Samsung Group (South Korea) – mobile phones, digital cameras, camcorders, refrigerators,
air conditioners, washing machines, and computers.

Daikin Industries, Ltd. (Japan) – Air conditioners and cooling equipment.

Sony Corporation (Japan) – televisions, projectors, DVD players, audio systems, digital
cameras, camcorders, and videogame products.

Philips N.V. (Netherlands) – televisions, home theatre systems, DVD players, audio
products, computers, and phones.

32
An Overview of Consumer Durable industry:

Festive season of 2019 - Brings cheers to consumer durables manufacturers and retailers
led by steady sale

The festival season for 2019 saw many consumer durable manufacturers and retailers
reporting a positive growth in sales and management commentary during the Q2FY20
post earnings call also indicated a positive outlook for retail sales during the festive
month of October 2019. While majority of the sales growth came at a cost where
manufacturers, retailers and consumer durable financing companies were doing the extra
bit to woo consumers by offering them extended EMI schemes along with a host of
freebies, cash back offers and much more. While, there was a mood of desperation as
many consumer durable brands and retailers saw negative sales growth in the month of
August and September 2019, the recently concluded Dusherra and Diwali sales in the
month of October 2019 saw a ~15-20% YoY increase in sales for most consumer durable
manufacturers and retailers. While, the growth was lower than 27% YoY growth, the
industry had witnessed the year before during the festive season, the positive growth
witnessed in the month of October gave a sigh of relief to many consumer durable
manufacturers considering the severe slowdown in consumption seen in the preceding
months. (Source: Business Today article dated 19 November 2019 “Premium products,
lower prices drive growth in consumer durables this festive season”). The festive season
for India— starting with Onam in Kerala covering Navratri, Durga Puja, Dussehra,
Karva Chauth, Dhanteras and Diwali — is the biggest consumption period in India,
contributing about ~35-40% of annual sales of most consumer- facing companies.
Thus, we believe, revival of sale during the recently concluded festive season augurs
well for the industry.
Sales for most of the consumer durable companies saw steady growth in Q2 FY20
despite high base

Q2 FY20 results for most of the consumer durable companies were better than market
expectation. This was largely driven by steady growth in topline led by sustained buying
in online platform (as indicated in Festive season sale for Amazon & Flipkart),
rationalization of inventory in retail channel before festive season leading to higher
factory sales and various promotional activities and easy financing schemes. Also,
management commentary indicated that Q2FY20 demand was largely driven by low-
priced entry-level products due to softness in the economy, and this was also visible in
the form of higher sales growth for Voltas (~44% in H1FY20) vs industry growth for
Room Air Conditioners
–RAC (~33% YoY) and also steady growth witnessed for companies with product
categories generally at MRP of Rs.10000 and less. Apart from these, improving
distribution reach, innovative product launches and plugging of portfolio gap (by Blue
star and IFB in case of front-load washing machines, and Blue star in high- end
refrigerators), entry into new product categories like dishwashers, air purifiers, water
purifiers by many industry players like Havells, Bajaj Electric, Voltas and Blue star
33
also led to sustained topline

34
 growth for the companies. On the pricing front, management for Blue star and Voltas
highlighted that intense competitive intensity led to muted pricing growth for the AC
industry, however, improving mix towards high priced inventor ACs led to some uptick
in company level realization. IFB on the other hand guided that it undertook ~5-6% price
hike in two phases for its Microwave and other product category on the back of
increasing cost structure largely impacted by rupee depreciation.
India is expected to become the fifth largest consumer durables market in the world by 2025.
Indian appliance and consumer electronics market reached Rs 76400 crore (US$ 10.93
billion) in 2019. Appliances and consumer electronic industry is expected to double to reach
Rs 1.48 crore (US$ 21.18 billion) by 2025.

Electronics hardware production in the country increased from Rs 1.90 trillion (US$ 31.13
billion) in FY 2014-15 to Rs 4.58 trillion (US$ 65.53 billion in FY 2019. The consumer
electronics market is expected to increase to US$ 400 billion by 2020.

Television industry in India reached an estimated of Rs 787 billion in 2019 and is projected to
reach 955 billion by 2021. As of FY 20 electronic, domestic appliances and air conditioner
market in India were estimated to be Rs 5976 crore (US$ 0.86 billion) Rs 17873 crore (US$
1.80 billion) Rs 12568 crore (US$2.56 billion) respectively.

35
 Chapter 2
RESEARCH METHODOLOGY
Research Methodology includes the various ways to gather information related to
research problem for doing research study. Research Methodology involves the objectives,
hypothesis, area and the methods of research study. Research Methodology also includes the
importance and limitations face by the researcher. It helps the researcher to analyse the
problem and to give solutions to research problem.

Research is a logical and systematic search for new and useful information on
particular topic. Research is a systematic way to solve problem. It is a science of studying
how research is to be carried out. Essential, the procedure by which researcher go about their
work of describing, explaining predicting phenomenon are called researcher methodology.

2.1 RESEARCH PROBLEM

The present research is exploratory in nature. Since GST is new phenomenon in India,
there are hardly any studies in this area. Research Problem for my research study is “Study
on impact of GST on consumer durable goods”.

2.2 RESEARCH OBJECTIVE

The purpose of this analysis is to study the impact of GST on consumer durable goods.

1. To study the consumer awareness towards GST.

2 To understand the impact of GST on consumer.

3 To analyse the consumer attitude towards GST.

4 To study the impact of GST on consumer durable goods.

5 To know customers view regarding impact of GST on consumer durables goods.

36
2.3 HYPOTHESIS

The Hypothesis is the tentative guess put forward to account for certain facts and used
for investigation which may be proved or disproved. Hypothesis is not always necessary, but
it makes the research specific. It deals with the cause and relationship between variables
under research study. It includes positive as well as negative impact of different variables.

For this research study hypothesis are as follows where H0 is null or negative
hypothesis and H1 is alternate or positive hypothesis.

H0: There is no significant difference in impact of GST on consumer durable goods.

H1: There is significant difference in impact of GST on consumer durable goods.

2.4 SIGNIFICANCE AND LIMITATION OF RESEARCH STUDY

Research study is a systematic way of solving the various problems. Every

research is done with specific objectives and goals. So that it has various positive and
negative impacts. The significance and limitations for my research study are:

SIGNIFICANCE

1. This research study is important to know the consumer likes, dislikes, choices,
perception etc towards impact of GST on consumer durable goods.

2. It helps to understand various issues relating to consumer awareness about GST on

consumer durable goods.

3. This research is important for deep study the problem and to know the accurate
information about the problem.

4. It is important for proper analysing and interpreting the problem correctly using
questionnaire method and also for giving proper conclusion and suggestions.

5. Significance of this research study is to find out the research problem and to find out
proper ways to solve the research problem.

LIMITATIONS

1. Consumers sometimes may not fully be aware about the topic. So they may not give
accurate and correct answers.

2. Survey questionnaire method takes little more time to analyse the data. Due to various
responses from consumers it is difficult to analyse the problem quickly.

37
 3. Sometimes it takes more time to take proper decision for research problem.

4. This study covers Limited area and with small sample size.

5. Due to some improper information by the respondents it is also difficult to give proper
conclusions and suggestions towards research problem.

2.5 SAMPLE AREA, SAMPLE SIZE, SAMPLE METHOD

SAMPLE AREA
The sample area for my research study is restricted to Mumbai city only.

SAMPLE SIZE
The sample size for my research study is 50 respondents of Mumbai city only.

SAMPLE METHOD
The sample method or technique use for my research study is non probability non
random convenience sampling.

2.6 DATA COLLECTION

Data collection is process of collecting information or data regarding to
the research problem. Data collection gives accurate and wide information regarding to the
research problem. While collecting the data we should take care that the information is up to
date and free from bias and the data is relevant to the needs of problem.

Data collection includes Primary Data Collection Method and Secondary Data
Collection Method.

1. Primary Data Collection Method

Primary data is method where the information is collected

first hand by the researcher for specific research project. Primary data collection is a way of
collecting information or data directly from consumers or respondents. It gives deep
information regarding to research problem. Primary data collection is quite expensive and
time consuming as compared to Secondary data collection. Primary data collection method
includes various methods such as Survey method, Field Observations, Self-administered
surveys, Questionnaire method, Observation method, Interview method, Experimentation
method etc.
38
 For my research study Survey method using Questionnaire is used.
Questionnaire is made with the help of Google Forms and the data is also collected using
Google Forms.

2. Secondary Data Collection Method

Secondary data is readily available data from published or printed

sources. Secondary data collection method refers to the data which have been already
collected and analysed by someone else. Secondary data is easy to collect and less time
consuming. Secondary research is much more cost effective than primary research as it
makes use of already existing data. Sources of Secondary data includes books, personal
sources, journal, newspaper, website, government record etc.

For my research study Secondary data is also used. Secondary data have
been collected from few books, articles, research report, research literature as well as sources
from internet.

39
 CHAPTER 3

LITERATURE REVIEW

Review of Literature is a comprehensive summary of previous research on a particular topic.

Review of literature is reviews of previous research studies, relevant reference books, articles
in specific journals and other published sources. Literature review are secondary sources and
do not report new or original experimental work. It gives full understanding of the
developments in the field. It is an account of what is already known about a particular
phenomenon.

1) P. Sathya & Dr. R. Indirajith in their study in (2018) states that, The consumer
durable goods industry is operating in a highly competitive, complex and rapidly
changing business environment. Business leaders of consumer durable white goods
organizations know their importance of having ready to access timely, accurate,
consistent information and data for the purpose of establishing, nurturing and
managing customer relationships across divisions The research paper deals with the
study on purchase behaviour of consumer durables goods in Tiruvarur district.

2) Mr. Saurabh Kabra, the current tax structure is deeply engaged with complexities in
the method of payment, a myriad of direct and indirect taxes and perplexing
compliance requirements. In order to the taxation system of this ambiguity the GST
Law will see the light of day on the 1 st of July. This fuels a promise of ‘One Nation’,
‘One Tax’, Under this singular tax, as many as 17 indirect central and state tax levies
are to be mitigated, thus ending years of complication and tax cascade. After
receiving and overwhelming response in both the Lok-Sabha and Rajya-Sabha, this
ambitious law is going to change the way India does business. Thronging the nation
with its digitalized approach, every sector of the economy will experience its
implications.

The consumer durable industry majorly, stands by the implementation of GST as it

eliminates the problem of double taxation. With a revised cost structure, this industry
will be one of the most positively impacted sectors. This will simplify the taxation for
the end consumer and will attract more buyers that will boost the sales of consumer
durables like TVs, ACs, Refrigerators, etc.

3) Dr. Pragya Dixit (2018) states that “Impact of GST In Indian Scenario” GST
stands for “goods and services tax” and is subject to an extensive indirect tax on the
production, sale and consumption of goods and on national services. It will replace all
indirect taxes that are imposed on the goods and services of the central and provincial
governments of India. France was the first country to introduce this system in 1954.

Almost 140 countries follow this tax system. GST could be the next big tax reform in
India. This reform can continue until it has fully evolved. With GST you can lower
operating costs by becoming a single market on the entire Indian market. It facilities
the smooth movement of goods by the state and lowers the transaction costs of
companies. This research report shows the impact of GST in other areas.
40
4) Nitin Kumar (2014) inferred from his study ‘Goods and Service Tax- A way
Forward’ that, the implementation of GST in India would help in removing economic
distortion by current indirect tax system and this would encourage an unbiased tax
structure which is indifferent to geographical locations.

5) Dr. G.G Suresh Babu. Reforms are a continuous process as and when a new reform
or bill comes and a new law is imposed, it surely leaves its impact especially on the
common man. It is ultimately the common man who is directly or indirectly affected
by the implementation of any new tax. GST or Goods and services tax as the name
Implies, it is an indirect tax applied both on goods and services at a uniform rate. A
single form of tax know as GST has applied throughout the country. Goods and
Services Tax – (GST)- A new law, a new tax will bring with it new challenges to face
that need to be tackled with utmost care. The GST bill covers the goods and services
tax and shall be the biggest indirect tax reform providing a uniform and simplified the
rates for all the goods and major service categories under various tax slabs. The tax
rate under GST are set at 0%, 5%, 12%, 18% and 28% for various goods and services
and almost 50% of goods & services comes under 18% tax rate. A bundle of indirect6
taxes will get replaced by GST. But how is our life going to change post GST? and
also to see how GST on some day=today good and services will have an impact on
end user’s pocket.

6) Anshu Ahuja (2017), in the research paper titled “Perception of people toward goods
and services tax” found that consumers are satisfied that goods and services tax will
reduce the tax evasion in the country and will increase the transparency in the tax
structure. He further suggested that government should give some relaxation to
farmers and small scale business to avoid the adverse impact of goods and services
tax on their income level.

7) Dr. Rashi Gupta, This paper is an attempt to understand the concept of Goods and
Service Tax (GST), to be implemented in India from 1st July 2017, This changing face
of India taxation system paves the path of development and advancement toward
which developing country like India is trying to move on. It is the biggest and
substantial indirect tax reform since 1947. The main is to replace existing taxes like
Value-Added Tax, Excise Duty, Service Tax and Sales Tax. It will be levied on
manufacture sales and consumption of goods and services. GST is expected to address
the cascading effect of the existing tax structure and result in uniting the country
economically. The paper highlights the background, objectives of the proposed GST
and the impact of GST in the present tax scenario in India. The paper further explores
various benefits, opportunities of GST and challenges faced by India in execution.
Descriptive statistical tools are used to analyse and interpret the data collected through
secondary sources such as official web sites of Government.

8) Sudip Banerjee, Priya Agarwal, before implantation of GST in India, Government

of India collected indirect taxes in the various names. Direct tax is mostly define
clearly to tax payer, but indirect tax does not define clearly because it collected by
government to each stage manufacturer to customer. For clearing of indirect tax
government of India introduced biggest tax reforms after independence since 1947 in
the name of GST. After implementing of GST in India, there are several issues arises
in front of the GOI, Professionals, businessman and even customers. These are the
issues highlighted in the paper.
41
9) Vinod Kumar (2017) states that “Impact of implementation GST on Common
man & Indian economy: Positive or Negative” Goods and services tax is a
comprehensive tax system on the manufacture, sale and use of goods, services at the
national level. GST is an indirect tax which will be the only way of supplying goods
and services across the country from manufacturers to the consumers, which will
transform the whole country into a seamless trading.

After GST, the benefits of the inputs made at each stage of production will be
available in the price phase in this case only at the production level it will be levied
only on value addition so that the final consumer will have to give GST the last dealer
in this supply chain. Thus, the effect of tax on different phases must be overcome.

10) Dr. Shakir Shaik, Dr. S.A. Sameera and Mr. SK. C. Firoz (2015), studies on
“Does Goods and Services Tax (GST) Leads to Indian Economic Development” They
are said that GST is expected to create a business friendly environment, as price levels
and hence inflation rates would come down overtime as a uniform tax rate is applied.
It will also improve governments fiscal health as the tax collection system would
become more transparent, making tax evasion difficult. Expected that implementation
of GST in the Indian framework will lead to commercial benefits which were
untouched by the VAT system and would essentially lead to economic development.
Hence GST may usher in the possibility of a collective gain for industry, trade,
agriculture and common consumers as well as for the Central Government and the
State Government.

11) Dr. P Uma Swarupal on his working paper in (2017) states that “ONE NATION
– ONE TAX (GST) – THE GAINERS AND LOSERS IN INDIA” – All the
necessary steps are being taken for the effective implementation of much awaited
Goods and Services Tax (GST) from April 2017 in India. GST will eradicate 17
indirect taxes and as a result the Indian economy will get a major push as many
economics have predicated a1.5 – 2 per cent boost for the country’s GDP.

Apart from manufacturing sector, logistics warehousing and even the common man
will benefit from the amendment. GST will be beneficial to the Centre, States,
Industrialists, Manufacturers, the Common man and the Country at large since it will
bring more transparency, better compliance, an increase in GDP growth and revenue
collections. Thus, GST has been a viral topic of discussion everywhere in India.
Therefore, we need to be aware of different aspect of GST. In this connection, this
paper is an outcome of an explanatory research which is based on secondary data to
understand the concept of GST and its mode of operation. This paper will also focus
on the impacts of GST and problem associated with the implementation of GST in
India.

12) Dr. Pradeep Chaurasia, Shweta Singhand, Prakash Kumar Sen (2016), studied on
the role of goods and service tax in the growth of Indian economy. They are
concluded that overall GST is helpful for the development of Indian economy as well
it will be very much helpful in improving the gross domestic product of the country
more than two percent. Now the government of India should take final stelp to pass
the GST bill in parliament with removing all hurdles.

13) Dr. Shakir Shaik, Dr. S.A. Sameera and Mr. SK. C Firoz (2015), studied on “Does
42
Goods and Services Tax (GST) Leads to Indian Economy Development?”. They said

43
 that GST is expected to create a friendly environment, as price levels and hence
inflation rates would come down overtime as a uniform tax rate is applied. It will also
improve governments fiscal health as the tax collection system would become more
transparent, making tax evasion difficult. Expected that implementation of GST in the
Indian framework will lead to commercial benefits which were untouched by the
VAT system and would essentially lead to economic development. Hence GST may
usher in the possibility of a collective gain for industry, trade, agriculture and
common consumers as well as for the Central Government and the State Government.

14) Rizal Palil (2011) stated that the implementation of GST in Malaysia is of course to
increase the efficiency of the tax collection system as well as become a major source
of indirect income to the government. They also suggested that the government could
use media more to promote GST so that people will be ready to accept its impacts.
This study also found that consumption behaviour of people would change
significantly with implementation of GST as they are selective in their purchasing
behaviour. This may lead to potentially distort the economic growth particularly on
aggregate demand.

15) Srinivas K. R (2016) concluded in his study that the introduction of GST provides
more opportunities to the concept of “Make in India” which would attract new foreign
investment and it would also reduce the manufacturing cost of the products.

16) Dr. R. Vasanthagopalon (2011) switching to seamless GST from current complicate
indirect tax system in India will be a positive step in booming Indian economy. He
also inferred that the success of GST will lead to its acceptance by more number of
countries in world and a new preferred form of indirect tax system in Asia too.

44
 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

The research data needs to be analyzed, interpreted and presented effectively for quick and
clear understanding. Data analysis is the process of collecting data related to the research
problem and to find out the solution to the research problem. For proper and accurate analysis
and presentation of the research data Pie charts, Bar graphs, Line graphs and other pictorial
devices are used.
Interpretations are made on rational basis, these interpretations may or may not be correct,
but care is taken to draw a valid and approvable interpretation.
An analysis of this study is based on the basis of responses received from 50 respondents.
Analysis is made only on the basis of data collected through survey from various
respondents, no other data is taken under consideration while making an analysis.

1. Opinion of consumers regarding purchase of consumer durable goods

after implementation of GST:

Particulars No. of Respondents % of Respondents

YES 27 54
NO 23 46

Yes No

46%

54%

The above pie chart shows the number of respondents who have purchased or not purchased
consumer durable goods after implementation of GST. Out of 50 respondents, 27 respondents
have purchased consumer durable goods and 23 respondents have not purchased consumer

45
durable goods. Means out of 50 respondents 54% are consumers who have purchased goods
and 46% are consumers who have not purchased goods.

2. If no, what is the reason for not purchasing any consumer durable goods:
Reasons No. Of Respondents % Of Respondents
Change in price 10 50
Lesser knowledge 05 25
Others 05 25

25%

50%

25%

Change in priceLesser Knowledge

Among 50 respondents, 10 respondents did not purchased consumer goods because of change
in price and 05 respondents had lesser knowledge about the product and 05 respondents said
that due to some other reasons they did not purchased consumer durable goods.

3. Opinion regarding GST has affected the demand for Consumer Goods:

Particulars No. Of Respondents % Of Respondents

YES 31 62
NO 19 38

46
 Yes No

38%

62%

The following pie chart shows that if the demand for consumer goods has affected after
introduction of GST. Among 50 respondents, 31 respondents says that the demand has been
affected i.e. 62%, and 19 respondents says that the demand has not affected i.e. 38%. The
demand may be affected for increase in price or many other reasons.

4. Opinion regarding awareness about the GST:

Particulars No. Of Respondents % Of Respondents
Yes 50 100
No Nil Nil

100%

Yes No

The above data show the information related to awareness about the GST. Above pie chart
shows that among 50 respondents all respondents are aware about the GST that means all 100
%.

47
5. Opinion regarding “GST” is a very good tax reform:

Particulars No. Of Respondents % Of Respondents

Strongly agree 25 50
Agree 05 10
Neutral 09 18
Disagree 06 12
Strongly Disagree 05 10

Strongly Agree 50%

Agree 10%

Neutral 18%

Disagree 12%

Strongly Disagree 10%

The above pie chart it shows that among 50 respondents majority of the respondents are
satisfied with the statement this taxation reform in India is very good., 25 respondents
strongly agree that GST is a very good tax reform i.e. 50%. 05 respondents agree with the
above statement i.e.10%. 09 respondents are not fully agreed i.e. 18%. 06 respondents
disagree that GST is not a good tax reform. i.e.12% and 05 respondents strongly disagree
with the above statement i.e. 10%.

6. Opinion regarding the principle of “One Tax one Nation”:

Particulars No. Of Respondents % Of Respondents
Yes 38 76
No 05 10
May be 07 14

48
 YesNoMay be

14%

10%

76%

In the above pie chart out of 50 respondents, 38 respondents are very much satisfied with the
principle of One nation one tax that means 40% and 05 respondents are not satisfied with the
above principle that means 10%. And the remaining respondents i.e. 07 respondents are not
fully satisfied with the above principle.

7. Opinion regarding GST has increased tax burden on the common man:
Particulars No. Of Respondents % Of Respondents
Yes 17 34
No 33 66

Yes No

34%

66%

49
The above pie chart shows that information related to GST burden on the people. Out of 50
respondents, 17 respondents feels that GST is burden on the people that means 34% and 33
respondents are feels that GST is not a burden on the people that means 66%.

8. Opinion regarding change in price of consumer goods because of implementation

of GST:
Particulars No. Of Respondents % Of Respondents
Yes 15 30
No 21 42
May be 14 28

YesNoMay be

28% 30%

42%

From the above pie chart out of 50 respondents, 15 respondents think that the price has been
increased after implementation of GST.21 respondents think that the prices have remained
same after introduction of GST and the remaining 14 respondents think that there are
fluctuation in prices after the implementation of GST.

9. Opinion regarding the GST system is better than Old Tax system:
Particulars No. Of Respondents % Of Respondents
Yes 30 60
No 05 10
May be 15 30

50
 YesNoMay be

30%

60%

10%

From the above pie chart among 50 respondents, 30 respondents said that the GST system is
better than the old tax system that means 60% and 05 respondents said that the GST system is
not better than the old tax system and the remaining respondents i.e.15 people think that both
the system are better.

10. Opinion regarding GST help India to become a developed country from developing
country:
Particulars No. Of Respondents % Of Respondents
Yes 31 62
No 00 Nil
May be 19 38

51
 YesNoMay be

38%

62%

0%

Among 50 respondents, 31 respondents said that the implementation of GST has helped India
to become a developed country from a developing country. i.e. 62% and 19 respondents are
not fully satisfied i.e. 38%.

11. Sources of GST Awareness :

Particulars No. Of Respondents % Of Respondents
Online Sources 20 40
Friends / Relatives 10 20
Television 05 10
Newspapers 06 12
Other 09 18

Sources of GST Awareness

Online Sources 40%

Friends / Relatives 20%

Television 10%

Newspapers 12%

Other 18%

52
The above pie chart shows that among 50 respondents, 20 respondents are aware about the
GST from online sources i.e. 40%. 10 respondents are aware about the GST from friends and
relatives i.e.20%. 05 respondents are aware about the GST from television i.e. 10%. 06
respondents are ware about the GST from newspapers i.e.12% and remaining 09 respondents
are aware about GST from other sources i.e. 18%

12. Opinion regarding GST benefit to both Government and People:

Particulars No. Of Respondents % Of Respondents
GST 48 96
Sales tax & Services Tax 2 4

GST Sales tax & Service Tax

4%

96%

The above pie chart shows that among 50 respondents, 48 respondents said that the GST is
beneficial to both government and people i.e. 96%.2 respondents said that the sales tax and
service tax are beneficial to both government and people i.e. 4%.

13. Opinion regarding buying frequency of consumer durable goods has been
increased after implementation of GST:
Particulars No. Of Respondents % Of Respondents
Yes 40 80
No 10 20

53
 YesNo

20%

80%

The above pie chart shows that among 50 respondents, 40 respondents said that the buying
frequency of consumer durable goods have been increased i.e.80%. 10 respondents said that
the frequency has not been increased i.e. 4%.

14. Opinion regarding satisfaction current prices of consumer durable goods:

Particulars No. Of Respondents % Of Respondents
Yes 37 74
No 13 26

Yes No

26%

74%

From the above pie chart, out of 50 respondents, 37 respondents are satisfied with the current
price of the consumer durable goods that means 74% and 13 respondents are not satisfied
with the prices of the consumer durable goods that means 26%.

54
15. Opinion regarding beneficial to entrepreneurs to get into consumer durable goods
industry:
Particulars No. Of Respondents % Of Respondents
Strongly agree 10 20
Agree 15 30
Neutral 05 10
Disagree 10 20
Strongly Disagree 10 20

Strongly Agree 20%

Agree 30%

Neutral 10%

Disagree 20%

Strongly Disagree 20%

From the above pie chart out of 50 respondents, 10 respondents strongly agree that it is
benefit to the entrepreneurs to get into this business that means 20%, 15 respondents said that
it is benefit that means 30%, 05 respondents think that may be it is benefit for them. 10
respondents do not agree with it and the remaining 10 respondents strongly disagree with the
entrepreneurs to get into consumer durable goods industry.

16. Opinion regarding GST slab rate for the consumer durable goods is high:
Particulars No. Of Respondents % Of Respondents
Yes 26 52
No 05 10
May be 19 38

55
 YesNoMay be

38%

52%

10%

From the above pie chart among 50 respondents, 26. respondents are said that GST slab rate
is high for the consumer durable goods that means 52%, 05 respondents said that GST slab
rate is not high for the consumer durable goods that mean 10% and 19 respondents said that
may be the slab rates are high.

17. Opinion of the people towards any changes in the GST slab rate for
consumer durable goods:
Particulars No. Of Respondents % Of Respondents
Yes 28 56
No 00 Nil
May be 22 44

YesNoMay be

44%

56%

0%

56
From the above pie chart out of 50 respondents, 28 respondents said that there is need to be
changes in the GST slab rate for consumer durable goods that means 56% and 22 respondents
are neutral in this question that means 44%.

18.Do you think GST is beneficial for foreign consumer durable goods company to
invest in Indian market:
Particulars No. Of Respondents % Of Respondents
Yes 27 54
No 05 10
May be 18 36

YesNoMay be

36%

54%

10%

From the above pie chart among 50 respondents, 27 respondents said that it is benefit to
foreign consumer to invest in Indian market that means 54%, 05 respondents said that they
should not invest mean 10% and 19 respondents responses are neutral in this.

57
 CHAPTER 5
FINDINGS, CONCLUSION AND SUGGESTIONS
FINDINGS:

 Most of the consumers had knowledge about the implementation of GST. And also
about the impact of GST on Consumer Durable Goods. Most of the respondents think
that GST would be beneficial to the government as well as people.
 Some of the respondents did not purchase any consumer durable goods because of
lesser knowledge about GST and higher price etc.
 Respondents think that the GST is a very good tax reform and better than the earlier
tax system.
 Many of the respondents think that the rate should be reduced to encourage the middle
class consumers.
 A large number of respondents think that the government should reduce the GST rate
on certain consumer durables like air conditioner which is still in 28 percent tax
bracket.
 Most of the respondents believe that there is a positive impact on GST on Consumer
Durable goods. Many of the respondents also think that after implementation of GST
prices have been increased.
 Around 40 respondents said that GST concept is easy to understand. As the principle
followed is “One Nation One Tax” which is benefit for the people.
 Some people also think that GST is a burden on comman man as the prices have been
increased on the products.
 Most of the respondents also think that it is benefit for the foreign investors to invest
in Indian market which would help to benefit the Indian economy.
 Some Respondents also think that GST would help India to become a developed
country from a developing country.

CONCLUSION:

This project report helped me to get deeply understanding about the topic “An Impact
of GST on Consumer Durable Goods”

58
 GST is a big leaf in the history of indirect tax structure in India. This will give a boost
to our economy by enhancing our GDP growth. The ‘one nation one tax’ concept will remove
the price disparity in different parts of our country. This will also attract foreign companies to
start their operation in India. In this way it will lead to employment generation and increase
in national income. Flow of foreign currency will improve our current account balance and
foreign exchange reserve.

GST will not only give impetus to major sector of economy, but it will also give a
boost to our equity market. It will improve our economic growth and make our economy
competitive in the globalized world. Through GST there is hope to slowdown in economic
growth in short run but will give a boost to our economy in long run.

To conclude, goods and services tax is considered as the important tax reform for the
nation. It seeks to make the country one common economic market. However, the concept of
goods and services tax followed in our country is different from the way it is followed in
abroad. The four tier goods and services tax rates is useful in taxing luxury products at higher
rates and frequent revisions of items included in various rates seems to have reduced the after
the new tax regime. Consumers also have a neutral opinion with regard to the impact of
goods and services tax on their disposable income and spending ability and time will take to
evaluate and arrive at a conclusion whether goods and services tax will benefit the country or
not.

Under GST various indirect taxes are subsumed and it would result in simple tax
regime especially for consumer durable goods. Apart from simplification of tax compliances,
the rate of tax will also have a significant impact on the consumer durable goods. The more-
over the prices of consumer durable goods depends not only on the tax rate implemented, but
also subject to other factor also such as seasonal factor, quality factor, safety factor.

Consumer durable maker today welcomed the government’s more to bring – ac,
washing machine and refrigerator- in lower GST slab. One of the biggest taxation reforms in
India- the Goods and Service Tax (GST). The overall structure of GST rate for the Consumer
Durable Goods sector has most likely seen mixed impacts. Consumer durable goods sector is
an important contributor to India’s GDP. GST has a significant impact on Consumer durable
goods.

So while implementing GST the government and official should ensure the execution
of the tax policy should be beneficial for both consumer as well as government.

59
SUGGESTIONS

 Government should take necessary action to create awareness about the pros and cons
of the GST among the people.
 The government must evaluate the way by which the GST rate is executed, so that
there is a provision for price reduction.
 Necessary steps should be taken by the government to stable the prices of goods or
services after GST implementation.
 A large amount of the respondents are in the opinion that the government should
made changes in the GST slab rate for consumer durable goods.
 Customers are more concerned about the quality than the cost of the product.
Therefore the manufacturers should produce only quality goods that in turn help them
to get success in the market.
 The consumers who are still not able to know about GST and its benefits the
government should take respective measures to inform them through various forms.
 The customers suggested that there should be a smooth, transparent and simple
transition provisions which is easily understandable.
 Lastly the government must ensure a good management of the income collected from
the GST.

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 CHAPTER 6

ANNEXURE
Q.1. Name:

Q.2. Have you purchased any type of Consumer Durable Goods after the implementation of
GST?
A) Yes B) No

Q.3. If No, what is the reason for not purchasing any Durable
Goods? Reason:

Q.4. Do you feel that the introduction of GST has affected the demand for Consumer Goods?
A) Yes B) No

Q.5. Kindly state whether you are aware about the GST (Goods and Service Tax)
A) Yes B) No

Q.6. What is your observation regarding “GST” is a very good tax reform?
A) Strongly Agree B) Agree C) Neutral
D) Disagree E) Strongly Disagree

Q.7. Whether you are satisfied with the principle of “One Nation One Tax”?
A) Yes B) No C) May be

Q.8. What is your opinion regarding the statement GST has increased tax burden on common
Man?
A) Strongly Agree B) Agree C) Neutral
D) Disagree E) Strongly Disagree

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 Q.9. Do you think the price of consumer durable goods has increased because of
implementation of GST?
A) Yes B) No C) May be

Q.10. What is your opinion regarding whether GST systems is better than old tax system?
A) Yes B) No C) May be

Q.11. Does implementation of GST help India to become A developed country from
developing country?
A) Yes B) No C) May be

Q.12. How do you get to know about GST? From?

A) Online sources B) Friend/Relatives C) Television D) Others

Q.13. Which system do you think is more benefit to both Government or People?
A) Goods & Service Tax B) Sales and Service Tax

Q.14. Do you think whether buying frequency of consumer durable goods has been increased
after implementation of GST?
A) Yes B) No C) May be

Q.15. Are you satisfied with the current prices of consumer durable goods?
A) Yes B) No C) May be

Q.16. Do you think GST is beneficial to entrepreneurs to get into consumer durable goods
industry?
A) Strongly Agree B) Agree C) Neutral
D) Disagree E) Strongly Disagree

Q.17. Do you think whether the current GST slab rate for the consumer durable goods is
high?
A) Yes B) No C) May be

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Q.18. Whether there should be any changes in the GST slab rate for Consumer
durable goods?
A) Yes B) No C) May be

Q.19. Do you think GST is beneficial for foreign consumer durable goods company to invest
in Indian market?
A) Yes B) No C) May be

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 CHAPTER 7

BIBLIOGRAPHY
For this Research Study the information is collected using various books, survey questionnaire
and various website

http:\\www.gstindia.com\basics-of-gstimplementation-in-india
http:\\www.bankbazar.com\tax\history-of-GST
http:\\revised-gst-rate-on-televsion-camera-transmission.aspx
http:\\cleartax.in/gst-laws-goods-and-services-tax
http://en.wikipedia.org/wiki/Goods_and_Services_tax_(India)
www.gstcouncil.gov.in
www.gstindia.com

A case study customer preference towards Consumer Durable goods.

For doing this project I have taken help from Friends and Surroundings.

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