SHRI RAMSWAROOP MEMORIAL COLLEGE OF

ENGENIEERING AND MANAGEMENT

Submitted

SYNOPSIS PRESENTATION
(KMBN-308)

on
IMPACT OF GOOD AND SERVICE TAX(GST)
ON FAST MOVING CONSUMER GOODS
(FMCG)

Submitted To : Submitted By
Ms .Shilpi Bajpai VISHAL SRIVASTAVA
Department of Management Roll No. 210122070060
SRMCEM, Lucknow MBA 2nd Year IVth Sem.
 INTRODUCTION
Goods and Services Tax (GST) is a successor to VAT used in India on the supply of goods
and services. GST is a digitalized form of VAT where you can also track the goods &
services. Both VAT and GST have the same taxation slabs. It is a comprehensive, multistage,
destination-based tax: comprehensive because it has subsumed almost all the indirect taxes
except a few state taxes. Multi-staged as it is, the 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 and as a destination-based tax, it is collected from
point of consumption and not point of origin like previous taxes.

The Goods and Service Tax (GST) is considered to be one of the great reformations
implemented in India. It is a comprehensive, multi-stage, destination-based tax that will be
levied on every value addition. Introduction of GST is an important restructuring in indirect
taxation in India. It is an indirect tax, throughout India, to replace several other taxes levied
by the central and state Governments. It will consolidate all state economies under one roof.
The basic idea is to create a single, cooperative and undivided Indian market to make the
country stronger and powerful. In the light of above development, it is very important to
analyze the provisions of the draft law in detail and assess its impact on various sectors. GST
will have a far – reaching impact on business avenues and compelling organizations to
realign their bottlenecks. India is one of the largest producers for a number Fast Moving
Consumer Goods which offers a large and growing market. The impact of GST on the Indian
fast-moving consumer goods is going to be manifold.

Benefits of GST on the Indian economy

• Removal of bundled indirect taxes such as VAT, CST, Service tax, CAD, SAD, and
Excise.
• Less tax compliance and a simplified tax policy compared to current tax structure. •
Removal of cascading effect of taxes i.e. removes tax on tax. 9
• Reduction of manufacturing costs due to lower burden of taxes on the manufacturing
sector. Hence prices of consumer goods will be likely to come down.
• Lower the burden on the common man i.e. public will have to shed less money to buy.
Effects of GST on Indian economy
• Reduces tax burden on producers and fosters growth through more production. The earlier tax
structure pumped with myriad tax clauses, prevented manufacturers from producing to their optimum
capacity and retards growth. GST took care of this problem by providing tax credit to the
manufacturers.
• Different tax barriers, such as check posts and toll plazas, lead to wastage of unpreserved items
being transported. This penalty transforms into major costs due to higher needs of buffer stock and
warehousing costs. A single taxation system will eliminate this roadblock.
• There is more transparency in the system as the customers will know exactly how much taxes they
are being charged and on what base.

• GST added to the government revenues by extending the tax base.

• GST provides credit for the taxes paid by producers in the goods or services chain. This is expected
to encourage producers to buy raw material from different registered dealers and is hoped to bring in
more vendors and suppliers under the purview of taxation.

Need for the study

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer-packaged goods.
Items in this category include all consumables (other than groceries/pulses) people buy at regular
intervals. FMCG is also one of the fastest growing sectors among all the sectors in the Indian
economy. FMCG segment is the fourth largest in the Indian economy. For most segments within the
FMCG spare, GST brings good tidings on the back of lower tax incidence when compared to the total
tax paid pre – GST. In this sector GST would have an impact on the pricing, working capital,
contracts with vendors and customers etc. The sale of retailers, wholesalers and the monthly budget of
common people regarding fast moving consumer goods (FMCG) should have an impact of GST.
Moreover, the concept of GST awareness among common man is an important matter to be analyzed.
FMCG goods have faced an increased rate of tax after GST certain big players like Nestle ,HUL and
P&G have been impacted by GST
 SCOPE OF THE STUDY
• The project covers possible impact of GST on FMCG sector. It also explains the
perspective positives and negatives of GST implementation to FMCG sector.

• The project highlights various problems faced by retailers and wholesalers. While
filing GST.
• They are also asked about the effect of GST on the prices of raw materials and
products.
 PROBLEM OF THE STUDY
1. GST is a fixture diversion reform for Indian economy by developing a common
Indian market and reducing the cascading effect of tax on the cost of goods and
service.

2. Under GST various indirect taxes would be subsumed and hence it is going to result
in a simpler tax regime especially for Industries like FMCG.

3. In this sector GST would have an impact on the pricing, working capital, contracts
with vendors and customers etc.

4. The sale of retailers and the monthly budget of common people regarding fast moving
consumer goods should have an impact of GST.
 OBJECTIVES OF STUDY

The current research will be aimed at determining the Effectiveness of Human Resources practices on
the employees of SBI Banks

1. To understand the concept of GST.

2. To obtain a comprehensive overview of consumer’s, wholesaler’s and retailer’s awareness
and perceptions of GST.
3. To find out the impact of GST on sales of retailers and wholesalers.
4. To analyse
 RESEARCH METHODOLOGY

Research Methodology of a research describes research methods, approaches and designs in

detail highlighting those used throughout the study, justifying my choice through describing
advantages and disadvantages of each approach and design taking into account their practical
applicability to our research. Research Methodology is a systematic approach in research to
achieve pre-defined objectives. It helps as a guide through the course of research work. Rules
and techniques stated in research methodology save time as it helps to know how to proceed
and conduct the study as per the objectives. Research methodology is the path through which
one need to conduct the research.
RESEARCH DESIGN –
Research design means a specified framework for controlling the data collection. The
research is of descriptive in nature, which could provide an accurate picture of induction
procedure conducted in the organization. Descriptive research includes surveys and fact-
finding inquiries of different kinds. The research is of Ex post facto nature in which
researcher no control over the variables has. Statistical method lay stress on objectivity rather
than rely on intuition and judgment and average & percentages can easily be calculated.

Source of Data
Sources of data includes secondary data collections focusing on qualitative and quantitative
data. The data collection mechanisms are devised and prepared with their proper procedure.
 SECONDARY DATA
The secondary data refers to data that was collected by someone other than the user.
This secondary data sources could be internal and external data sources of
information that may cover a wide range of areas. The data in this research is
collected through various articles, reports, websites, journal, books, newspaper, etc.
The data which have already been collected by someone else or taken from published
or unpublished sources and which have already been passed through the statistical
process.

 TOOLS AND TECHNIQUES

Tools and techniques mean use of some smart tools. These tools are simpler and
easier to understand as compared to the theoretical data. Various tools and techniques
used in this research is tables, graphs,
.
 LITERATURE REVIEW
Empowered committee of finance ministers (2009), introduced their first discussion paper
on GST in India which analyses the structure and loopholes if any in GST.
Vasanthagopal (2011) in the article GST in India, A big leap in the indirect taxation
system discussed the impact of GST on various sectors of the economy . The article
further stated that GST is a big leap and a new impetus to India’s economic change. The
constitution 115 amendment bill, 2011. Bird (2012) summarizes in the article the
GST/HST- creating an integrated as tax in federal country the impact of GST will be on
Canada. Garg (20GST in the article named basic concepts and features of goods and
services the In the analyse the impact and GST on Indian tax scenario and concluded
that it will strengthen out free market economy.

• Under the study, Kaur. M, et.al (2016), mainly focuses on what are the impacts of
GST after its implementation, the difference between the present indirect taxes and
GST and also benefits and challenges of GST after its implementation. Research
being a qualitative research analysis on how various goods and services are being
taxed under GST. Researches use the consumer price index which is a statistical
estimate constructed using the prices of items collected periodically. With the help of
CPI researcher analysis, the significant impact of GST on various items which comes
unto 20-25%. Researchers conclude stating that GST would reduce the tax burden and
also play inactive role in the growth and development of our country.

• Aurobinda sssssPanda (KNT school of Law), Atul Patel (KIIT school of law), “THE
IMPACT OF GST (goods and service tax) ON THE INDIAN TAX SCENE (2010)
AT SSRN”The research paper analyses how GST would impact on Indian tax
scenario. The authors have given a brief history of Indian taxation and its structure.
Background of GST outside India as well as in India is also discussed. Authors
concluded that GST would be beneficial for the industry and the consumers. It would
lead to an increase in revenue for the government

• In the study Monika Sehrawat, et.al (December 2015) focuses on GST IN INDIA, A
KEY TAX REFORM for international journal of research- This research presents an
overview of GST concept. It explains the features and its live line of implementation
in India. The paper also highlights the advantages and disadvantages of GST in India.
The author concludes that GST fulfils the requirement of the simplified, user-friendly
and transparent tax system. The author also states that with the coming of GST, it will
lead to higher more employment opportunities and flourish GDP by 1-15 .
• Dr Mohan Kumar, et.al (December 2017) talks about GST AND ITS PROBABLE IMPACT
ON THE FMCG INDUSTRY IN INDIA , for the international journal of research in finance
and marketing.This paper analyzes the impact of the FMCG industry. The fast-moving
consumer goods (FMCG) sector of India compromises more than 50% of the food and
beverage industry. And another 30% from personal and household care. Presently the peak
tax cost for industry players amount to approximately 27% i.e. (excise duty of 12.5% and
VAT ranging from 12-15%) under the GST regime, its proposed that the revenue neutral rate
would be in the range of 16- 19%.

• R Hiremani Naik et.al (December 2017) discuss ON PERSPECTIVE IMPACT OF GST ON

FMCG SECTOR IN INDIA” , for international journal of research in Business studies. The
fast-moving consumer goods (FMCG) segments arethe fourth largest sector in the Indian
economy. The sector is likely to see a significant impact once the goods and service tax(GST)
bill is passed as the companies set warehouses across the states in a bid to have a more tax
efficient system.FMCG is one such sector directly having its impact on the large public. It is
very important to study the possible positive and negative impact of GST implementation on
the FMCG sector.