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CHAPTER 1
INTRODUCTION
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1. INTRODUCTION
1.1 CONCEPT OF GOODS AND SERVICE TAX (GST) & FAST
MOVING CONSUMER GOODS (FMCG) SECTORS

GST: The Goods and Service Tax (GST) are considered to be one of the greatest tax
reformations implemented in India. It was 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 Government and State Governments. It will
consolidate all state economies under one roof.
Under GST various indirect taxes was be subsumed and hence it is going to result in a simpler
tax regime especially for Industries like FAST MOVING CONSUMER GOODS (FMCG).

FMCG SECTOR: The Fast Moving Consumer Goods (FMCG) sectors ordinarily offers with
the production, distribution and marketing of client packaged items, i.e, the ones classes of
merchandise which might be fed on at ordinary intervals. Examples are foods & beverage,
private care, pharmaceuticals, plastic items, paper & stationery and family merchandise etc.
This sectors are significant and gives a huge variety of task possibilities in capabilities along
with the sales, deliver chain, finance, marketing, purchasing, human resource, product
improvement and widespread management.

1.2 BENIFITS OF GOOD AND SERVICE TAX (GST) ON INDIAN

ECONOMY

(i) Removal of bundled indirect taxes such as VAT, CST, Service tax, CAD, SAD, and
Excise.

(ii) Less tax compliance and a simplified tax policy compared to old tax structure.

(iii) Removal of cascading effect of taxes i.e. removes tax on tax.

(iv) 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.
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(v) Lower the burden on the common man i.e. public will have to shed less money to buy
the same products that were costly earlier.

(vi) Increased demand and consumption of goods.

(vii) Control of black money circulation as the system normally followed by traders and
shopkeepers will be put to a mandatory check.

(viii) Boost to the Indian economy in the long run.

1.3 BACKGROUND OF 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 the different wholesalers and retailers is an
important matter to be analysed. FMCG goods have faced an increased rate of tax after GST
certain big players like Nestle, ITC etc. have been impacted by GST.

1.4 LITERATURE REVIEW

Many researchers have studied GST from different views and in different environment.
The followings was very interesting and useful for our research.
1. Saravanan Venkadasalam, (2014) has analysed the post effect of the Goods and Service
Tax (GST) on the national growth on ASIAN states using Least Squares Dummy Variable
Model (LSDVM) in his research paper. He stated that seven of the ten ASEAN nations are
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already implementing the GST. He also suggested that the household final consumption
expenditure and general government consumption expenditure are positively significantly
related to the gross domestic product as required and support the economic theories. But the
effect of the post GST differs in countries. Philippines and Thailand show significant negative
relationship with their nation’s development. Meanwhile, Singapore shows a significant
positive relationship.
2. Dr.Mohan Kumar, (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%.
3. In the study of Monika Sehrawat (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 Gross Domestic Product (GDP) by 1-15 %.
4. R.Hiremani Naik (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 are the 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.
5. Jaiprakash ( 2014) in his research study mentioned that the GST at the Central and the
State level are expected to give more relief to industry, trade, agriculture and consumers
through a more comprehensive and wider coverage of input tax set-off and service tax setoff,
subsuming of several taxes in the GST and phasing out of CST. Responses of industry and
also of trade have been indeed encouraging. Thus GST offers us the best option to broaden
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our tax base and we should not miss this opportunities to introduce it when the circumstances
are quite favourable and economy is enjoying steady growth with only mild inflation.
6. Aurobinda Panda (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.
7. Sanket Dhanorkar, Economic Times Bureau, (May 29, 2017) stated that the Impact of
GST on FMCG firs will depend on their product mix, given that the tax rules have gone up
for some products and have fallen for others. The FMCG companies, whose tax incidence has
come down under the GST regime, are likely to pass it on to the consumers in the form of
lower prices. Manufactures will have to pass on the higher tax incidence of some products
placed under highest tax slab of 28%, to consumer in the form of higher prices of these goods.

1.5 RELEVANCE OF STUDY

In an ocean of volatile industries, the Fast Moving Consumer Goods (FMCG) industry
represents an island of stability during times of economic uncertainty. Among the various
industries that characterize the modern global economy, the Fast-Moving Consumer Goods
Industry is amongst the most resilient to economic shocks. Unlike other industries, the Fast
Moving Consumer Goods (FMCG) sector is not prone to mass layoffs or substantial dips in
profit when the economy slows down. This is due to the nature of the goods themselves.
For a developing country like India a sector like “FAST MOVING CONSUMER GOODS
(FMCG)” which does not get affected by economic instability. So, it is important to analyze
the impact of a big tax reform in the country with respect to the 4th largest sector of the
Indian economy with a total market size of US $110 billion (according to 2020). Fast Moving
Consumer Goods (FMCG) are popularly known as consumer packaged goods.
Items in this category include all consumable (other than groceries/pulses) people buy at
regular interval.
As per the old regime, FMCG sector has to pay many indirect taxes like VAT, Service Tax,
Excise Duty, Central Sale Tax etc. Once GST law was implemented it will cover all the
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above taxes under one single point of tax in form of GST. The current tax rate FMCG
industry including all the taxes is around 22% to 28%.

1.6 OBJECTIVE OF STUDY

(i) To understand the concept of Goods & Service Tax (GST).

(ii) To obtain a comprehensive overview of wholesalers and retailers awareness and

perceptions of GST.

(iii) To study about Fast Moving Consumer Goods (FMCG) sector.

(iv) To analyze the impact of GST on sales and profits of some selected Fast Moving
Consumer Goods companies. Wheather it is positive or negative.

(v) To analysis of impact of GST in FMCG sectors in National scenario.

1.7 DATA SOURCE AND METHODLOGY

1.7.1 DATA SOURCES

Basically this study report is based on both Primary Data and Secondary Data.
 Primary data was collected with the help of framed questionnaire through direct
communication. About 30 samples were collected from different retailers and wholesalers
of FMCG shops.
 Secondary Data is collected through various websites, Government portal, different
Universities portals, Journals etc.

1.7.2 METHODLOGY OF STUDY

Project methodology has many dimensions. It includes not only the project methods but also
considers the logic behind the methods used in the context of the study and complains why
only a particular method of technique has been used. The methodology which was used was
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sample survey method. The data of this study report were analysied with the help of various
Statistical tools like pie chart, Bar Diagram, Tables etc.

1.8 LIMITATIONS OF STUDY

1. Geographical limitation: This data was collected only from the Serampore and Seoraphuli
FMCG shops. If the data were collected from the outside region of Serampore and Seoraphuli
then the analysis and conclusion could be different.

2. Time Constrains: The time for the Project Paper was very limited. Sample size could have
increased with increased duration of time.

3. Lack of factual data: There is no factual data available regarding the study, analysis or
conclusion. This data completely relies on the sample.

4. Expert Review: This research paper has no expert review and recommendation.

1.9 CHAPTER PLANNING

CHAPTER 1
Introduction --- This chapter includes concept of GST and FMCG sectors, Benefits of
GST on Indian economy, Background of study, Relevance of study, Literature Review,
Data sources and Methodology, Limitations & chapter planning.

CHAPTER 2
Conceptual Framework ---- This chapter includes National Scenario of Impact of GST on
FMCG sectors & Clarification Yet to come.

CHAPTER 3
Data Analysis & Findings ---- This chapter includes analysis and interpretation of
financial data which has been collected.

CHAPTER 4
Conclusion of the study ---- This chapter includes the conclusion of the study
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CHAPTER 2
CONCEPTUAL
FRAMEWORK
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2. CONCEPTUAL FRAMEWORK

2.1 NATIONAL SCENARIO OF “IMPACT OF GST ON FMCG

SECTORS”

Goods and Services Tax (GST) is a successor to VAT and others indirect taxes used
in India on the supply of goods and services. GST is a digitalized form of indirect taxes where
we can also track the goods & services. 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.

Goods and services are divided into five different tax slabs for collection of tax: 0%, 5%,
12%, 18% and 28%. However, petroleum products, alcoholic drinks, and electricity are not
taxed under GST and instead are taxed separately by the individual state governments, as per
the previous tax system. 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
several 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 single GST subsumed several taxes and levies, which included central excise
duty, services tax, additional customs duty, surcharges, state-level value added tax and
Octroi. Other levies which were applicable on inter-state transportation of goods have also
been done away with in GST regime. GST is levied on all transactions such as sale, transfer,
purchase, barter, lease, or import of goods and/or services.

Rate of GST: The GST is imposed at variable rates on variable items. The rate of GST is
18% for soaps and 28% on washing detergents. GST on movie tickets is based on slabs, with
18% GST for tickets that cost less than ₹100 and 28% GST on tickets costing more than ₹100
and 28% on commercial vehicle and private and 5% on readymade clothes. The rate on
under-construction property booking is 12%. Some industries and products were exempted by
the government and remain untaxed under GST, such as dairy products, products of milling
industries, fresh vegetables & fruits, meat products, and other groceries and necessities.
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Fast-moving consumer goods (FMCG), also known as consumer packaged goods (CPG), are
products that are sold quickly and at a relatively low cost. Examples include non-
durable household goods such as packaged foods, beverages, toiletries, candies, cosmetics, over-
the-counter drugs, dry goods, and other consumables. Fast moving consumer goods have a
high inventory turnover and are contrasted with specialty items which have lower sales and
higher carrying charges. Many retailers carry only FMCGs, particularly hypermarkets, big box
stores and warehouse club stores. Small convenience stores also stock fast moving goods; the
limited shelf space is filled with higher turnover items.

The Indian FMCG sector is the fourth largest sector in the economy with a total market size
in excess of US$ 13.1 billion. 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.

As per the current tax regime, FMCG has to pay many taxes like VAT, Service Tax, Excise
Duty, Central Sales Tax. Once the GST law will be implemented it will cover all the above
taxes under one single point of tax in form of GST. The current tax rate for the FMCG
industry including all the taxes is around 22-24%. GST might be implemented with the
expected rate of 18-20 %.

It would be welcomed by all the major players in the FMCG industry. No input credit was
available for certain taxes like CST, CVD, and SAD under the current tax regime. Whereas
under GST, there would be input credit available for all the GST payments made in the course
of business.

1. Impact on prices

In FMCG products, pricing is normally performed on foundation of Maximum Retail Price

when items are offered to the stop client. Anti-profiteering policies as in line with segment
171 of the CGST Act, 2017 additionally warrant the eye of the reader. Section 171 of CGST
Act, 2017 presents that any discounts in charge of tax on any deliver of products or offerings
or the gain of enter tax credit score will be exceeded directly to the recipient via way of
means of manner of commensurate discount in fees. It is likewise believed that being a client
dealing with industry, the FMCG zone is greater liable to dangers that may rise up because of
profiteering.
The whole cost chain consequently has the obligation of passing at the blessings of discount in
fees to their patron and make certain that they agree to the anti profiteering guidelines. One of
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the maximum thrilling questions that pops up is how providers need to make certain
compliance with anti-profiteering policies and the way anti-profiteering need to be enacted In
our view, following are the important thing steps that organizations must observe the hints
that might assist in setting up compliances with anti-profiteering:

 Maintenance of value information: It is crucial to keep value information and make

certain that all. Costs are factored in when figuring out the fees of the products. It can also
be really helpful to consult enterprise friends at the way wherein they account for and
document fees.
 Segregation of fees: It is likewise really helpful to reduced fees into product precise and
well known overheads. This will facilitate in deriving fees product in that case preferred
with the aid of using the anti profiteering authorities.
 Ascertaining the mechanism of transmitting profits because of GST implementation:
There are numerous mechanisms wherein the profits from GST may be transmitted to
downstream cost chain participants. These include amount discounts, promotional schemes,
hanging down of MRPs etc.

2. Impact on Supply Chain:

FMCG sector usually has lengthy deliver chains with several cost chain individuals and
normally comply with a multi-channel approach for distribution. Generally all FMCG
individuals are actually promoting items through bodily in addition to online channels. In the
past, the shape of deliver chain became surprisingly motivated with the aid of using region
primarily based totally exemptions, taxes on access of products and additionally on Central
State Tax, which became relevant on inter-state motion of items and normally have become a
fee as set off of Central Sales Tax which had became no longer to be had in opposition to
State VATs and additionally in opposition to Excise Duty. Uniform taxes and removal of
Central Sales Tax (CST) for inter-state motion of products under GST generation to maintain
importance from deliver chain perspective. Under GST, business devices have incentives to
consolidate their warehouses in place of maintaining one in every state to keep away from
CST. Efficient deliver chains could in flip lesser logistics fee and produce down the expenses
of distribution.
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3. Impact on Promotional Schemes:

The FMCG enterprise has a tendency to take part in diverse promotional schemes. Buy one-
get one free is not an unusual scheme with inside the FMCG enterprises. As in keeping with
segment of section 17(5) of the CGST Act, enter tax credit score shall now no longer be
available for items given as samples. Non availability of enter tax credit, score might also
additionally boom promotional fees of FMCG companies, which in results in boom in overall
expenses of FMCG products. There had been diverse circulars enacted with the GST remedy
of promotional fees and of products given free from value or disbursed as unfastened or free
samples.

4. Reduction in Logistics Cost:

The FMCG region shall additionally gain from GST with the aid of using saving against quantity
of charges on logistics. Distribution expenses for the FMCG manufacturers quantity to 2-7
percentage of the overall fee, however, those fees have additionally dropped to approximately 1-
5 percentage publish GST. Due to the deliver chain control with regard to paying taxes, declare
of enter tax credit and doing away with CST below the GST regime, there may be a fee discount
in phrases of transportation and garage of goods. The discount in taxes and distribution expenses
must be enable agencies to decrease charges on patron goods. FMCG region specifically relies
upon on distribution and transportation. The quantity of logistics charges or fee reduced after
GST implementation, the logistics expenses were decreased because the evaluate the
improvement of logistics and
transportation are anticipated to enhance efficiency. It has been helped to stand multi-layered tax
machine.

5. Impact on Warehouse costing:

The area of a warehouse is commonly selected with an idea of decreasing the price of
transport for each the business enterprise and the customer. Other elements taken into
consideration are get entry to important highways, ports for cargo and labour availability.
Local states taxes was one of the major constraints that why FMCG sectors used to don't
forget earlier than organising their warehouses. Due to the fluctuating tax fees of states, those
sectors were not desired a warehouse in each states, as away to keep away from the tax fees at
the same time as transporting the products from one location to another.
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After GST, the logistics had been revised with the aid of using maximum of the sectors that
now, opt for one vital warehouse or some warehouses in unique places or take delivery of the
Hub and Spoke model. The give up of neighbourhood states taxes has caused gain price
performance with inside the operations of many sectors, thereby moving this gain to the give
up purchaser with inside the deliver chain.
As per the latest report of CRISIL, provides that warehousing price of FMCG had been
decreased after the GST implementation. The FMCG sectors plans and builds the warehouses
in each states to keep away from or break out from tax. Hence genuinely the warehouse price
goes to have advantageous method for the FMCG sector. FMCG sectors calls for to have a
big warehouse in a diverse states due to the fact for the cause of the tax imposed with inside
the states. It had an impact on warehouse shape and improves the garage price.

6. Impact on Consumer Spending:

Due to FDI regulations and a huge kind of manufacturers being added with inside the market,
the customers have a huge kind of manufacturers to select from evaluating the costs and the
quantities. With growth with inside the quantity of advertising techniques and types spending
on advertisements, the customers have turn out to be greater emblem aware and as a result,
the spending of the customers have increased. The destocking of the products, proper earlier
than the GST has brought about a fair more growth with inside the customer spending
throughout all the cities. Due to the appearance of GST, aside from the FMCG industry, many
other industries just like the Advertisement industries are at a whole lot thriving profits.

7. Advancement of effective tax rates:

Goods like Sanitary Napkins, meals objects like milk, eggs etc were positioned beneath at
zero percentage tax slab, numerous ordinary items were positioned beneath at 18 percentage
tax slab. The tax on aerated beverages was positioned beneath at 28 percentage tax slab.
The maximum tax slab of 28% is levied on aerated beverages and it additionally entices a
further tax of 12%. As a primary powerful tax fee of 40% at the sweetened aerated water and
flavoured water beverages. Under GST, the tax fee of 40% is contrasting to coverage of hold
equality with the weighted common tax that's beneath at 40%.
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8. Input Tax Credit (ITC):

According to section 2(63) of the CGST Act, ‘input tax credit’ means the credit of input tax.
However, this definition is too short to understand the meaning of ITC. In simple terms, the
input tax credit is the credit of tax paid on inward supply of goods or services or both against
tax payable on outward supply of goods or services or both subject to certain restrictions as
provided in CGST Act/ Rules.
It calls for a hard and fast set off of tax at each level of manufacturing in the deliver chain that
in the end burdens the customer who bears the whole tax. In the FMCG sector, the overall
performance of deliver chain holds the key. The advent of e-manner invoice after GST
becomes made in order to maintain a good distribution network.
In order to conquer the task of tax on tax at that point enter tax credit score integrated into the
GST gadget which delivers of offerings or items is provided to a taxable person, and the GST
charged is also a enter tax. It can also additionally includes CGST, SGST, IGST and UTGST.
Reconciliation of ITC matching begins off evolved because of submitting GST and go back.
ITC matching process will be carried out via GST network. In this manner inward deliver and
outward deliver info are too matched through GSTR2 and GSTRI. If it mismatches then it
comprise GSTR3.

9. E-Way Bill:
E-manner invoice is obligatory for any transaction of transportation of products above
₹50,000 from one country to another. One e-manner invoice is to be generated through the
primary producer on the Hub, and the equal is issued to the middle guys and transport
retailers, which we could the hub to maintain a music of this which had delivered
transparency. Performance with inside the deliver chain of products throughout the states.
The organised sectors like FMCG, Pharmacy to the fast and smooth era of the E-manner
payments.
The processing of E-manner payments has end up smooth now. It may be generated at the
web, SMS, Android App, Bulk adds etc. Transporters ought to create numerous sub-
customers or retailers with sure roles to be carried out. The e-manner invoice may be
cancelled within 24 hours and the recipient also can reject an e-manner invoice within 72
hours from its consignor. Only cost of taxable deliver for producing e-manner invoice in
instances wherein the income bill incorporates of exempted in addition to the taxable deliver
of products. The invoice is legitimate till night time and the day right away following the era
of e-manner Bill. The e-manner invoice group presents with an API gadget which may the
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amount of the products which might be being transported and the quantity of taxes that are
being paid on each transport. be utilized by the transporters and tax payers for producing the
E-manner invoice online.

10. Stock Transfers:

Stock transfers outside the State will be subject to GST. It is unclear whether stock transfers
within the State will also be subject to GST. It is to be noted that the GST framework was
intended to tax only inter-State stock transfers and not intra-State stock transfers.
Additionally, with respect to the valuation of stock transfers, the GST Valuation Rules
provide that the value of goods shall be the transaction value.
Transaction value is the price paid or payable for the supply of goods. As stock transfers do
not have a consideration, this provision cannot be implemented. In addition, GST Valuation
Rules provide that if the transaction value is not available then the value for the goods or
service would be considered as the transaction value of goods or service of same kind and
quality.

11. Foreign Investment:

The foreign investment had now increased in India. Our country is now a unified market.
The FMCG goods that are manufactured in India had now become more competitive in the
international markets, because of its low production cost. As the GST has reduced its export
cost and production cost both. The implementation of GST has lowered almost all taxes and
made it easier for manufacturers and business owners to sell in the global and international
market without any hassle.
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2.2 CLARIFICATIONS YET TO COME

A lot of FMCG companies set up their warehouses in states like Himachal Pradesh as they
enjoy a lot of holidays/benefits/exemptions under the ongoing tax regime. It is still not clear
as to whether all the tax holidays/benefits/exemptions would exist under the GST law once it
is implemented.

Major FMCG companies like Nestle, ITC, Hindustan Unilever, Dabur are anxious as the non-
migration of Tax holidays/exemptions provided in current law could hurt the costing of the
products of the company. GST transition is not just a transition of tax; it impacts every aspect
of the business operations and therefore it requires a ‘whole of business’ approach to ensure a
smooth transition.

It would be invited by every one of the key parts of the FMCG industries. No info credit was
accessible for specific expenses like CST, CVD and miserable under the current assessment
system. While under GST regime, there would be Input Tax Credit (ITC) accessible for all
the GST instalments made throughout the business.
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CHAPTER 3
DATA
ANALYSIS
&
FINDINGS
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3.DATA ANALYSIS

3.1 ANALYSIS OF DATA ON THE BASIS OF PRIMARY DATA

1. What is your Gender?

What is your Gender ?

30%
Male
Female
70%

1st question was asked about the Gender.

From the above pie chart, it was seen that out of 30 responses 21 were males (approx 70%)
and out of 30 responses 9 were females (approx 30%).

2. Age Group?

Age Group

10%
18-25
13.33% 26-33
50%
34-41
26.67%
Above 41

2nd question was asked about the age. The options are 18-25, 26-33, 34-41, Above 41
Above mentioned was the result of the age group of respondents.
Out of 30 responses, 15 responses were aged in Above 41
Out of 30 responses, 8 responses were aged in 34-41 group, 4 responses were Aged in 26-
33 group and lastly, only 3 responses were aged in 18-25 group.
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It is clear that aged group Above 41 is maximum and 18-25 groups were minimum.

3. Are you Wholesaler or Retailer of FMCG?

Are you Wholesaler or Retailer of FMCG?

30%
Wholesaler
Retailer
70%

3rd question was asked if he /she was a wholesaler or retailer.

Considering their responses, it was shown from the above pie chart 21 responses out of 30
(70% approx.) were retailer and 9 responses (30% approx) were wholesaler.

4. Do You Have GST Number?

Do You Have GST Number?

30%
Yes
No
70%

4th question was asked if they have GST number or not.

Considering the above responses, it was shown from the above pie chart that out of 30 responses
only 9 responses (approx 30%) have GST number and out of 30 responses 21 responses (approx
70%) have no GST number.
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5. Which type of FMCG products do you trade?

Which type of FMCG products do you trade?

16.67% Medicine
33.33% Packaged foods

20% Toiletries
Beverages
13.33% All of the above expect medince
16.67%

5th question was asked “Which type of FMCG products do you trade?”
The options were medicine, packaged foods, toiletries, beverages and both packaged foods
toiletries beverages.
Considering the above responses it was shown from the above pie chart that 5 responses
(16.67% approx) out of 30 responses trade only medicine (health care), 4 responses (20%
approx) out of 30 responses trade only packaged foods, 5 responses (approx 16.67%) out of
30 trade toiletries, 4 responses (approx 13.33%) out of 30 responses trade beverages and lastly
10 responses (approx 33.33%) trade all of the above expect medicine.
Its shows that most of the traders trade packaged foods.

6. What percentage of your goods gets expired?

What percentage of your goods gets expired?

13.33%

0%-5%
26.67% 6%-16%
60% Above 16%
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6th question was asked ‘What percentages of your goods get expired?’
Considering their responses, it was shown from the above pie chart that 18 responses (approx
60%) out of 30 responses choose 0%-5% of the goods get expired on the other hand, 8
responses (approx26.67%) out of 30 responses choose 6%-16% of the goods get expired and
only 4 responses (approx 13.33%) choose the percentage of goods expired is more than 16%.
From the above analysis, it was seen that most of the traders had efficiency to sell out the
entire stock of FMCG products.

7. Do you purchase your stock of goods by paying GST?

Do you purchase your stock of goods by paying GST?

16.67%

Yes
No

83.33%

7th question was asked “Do you purchase your stock of goods by paying GST?” Considering
the above responses it was seen from the above pie chart that 25 (approx 83.33%) responses out
of 30 responses said “Yes” and 5 (approx 16.67%) responses out of 30 responses said “No”. At
conclusion, it was seen that most of the traders purchases their stocks of goods by paying GST.
 P a g e | 22

8. What were the challenges faced by FMCG product traders during post GST?

What are the challenges faced by FMCG product traders during

post GST?

Not aware of how to pay GST

26.66%
Incurred Losses
50%
Slowdown in sales
16.67%
Others

6.67%
.

8th question was asked ‘what were the challenges faced by FMCG product responses post
GST?’
The options are not aware of how to pay GST, Incurred losses, Slowdown in sale and others.
Out of 30 responses 15 trades (50% approx) choose the option not aware to pay GST.
Out of 30 responses 2 (6.67% approx) responses choose the option incurred losses
Out of 30 responses 5 (16.67% approx) responses had selected the option slowdown in sales.
Lastly, Out of 30 responses 8 (26.66% approx) responses had selected the option others.
So, lastly it was seen that most of the FMCG traders faced the challenge not aware of how to
pay GST.

9. Whether prices of FMCG products increased after implementation of GST?

Whether prices of FMCG products increased after

implementation of GST?

30%
Yes
No
0% 70%
May Be
 P a g e | 23

9th questions was asked ‘Whether price of FMCG products increased after implementation of
GST?’

From the above pie chart the conclusion stands that out of 30 responses 21 responses (70%
approx) were agreed FMCG product price increased after implementation of GST.
Rest 11 responses (30% approx) not agreed to above mentioned question.
So, at last it was seen that most of the people were agreed that the prices of FMCG products
were increased in post GST era.

10. At the time of COVID 19, whether the sale of FMCG products declined?

At the time of COVID 19, whether the sale of FMCG products

declined?

23.33% Yes
No
6.67%
70 % May be

10th question was asked “at the time of COVID 19, whether the sale of FMCG products
declined?”
From the above Pie Chart it was seen that out of 30 responses 21 responses (approx 70 %)
choose the option “Yes”, 2 responses (approx 6.67%) out of 30 responses choose the option “
No”, Rest 7 responses (approx 23.33%) out of 30 responses choose the option “May be”.
At conclusion, it was seen that maximum number of people said that during pandemic
(covid19) the sales of FMCG were declined.
 P a g e | 24

11. Whether customers had shifted to different brands after GST was implemented on FMCG
products?

Whether customers had shifted to different brands after GST

was implemented onFMCG
products?

40% Agreed
50% Disagreed
May be

10%

11th question was asked “Whether customers had shifted to different brands after GST was
implemented on FMCG products?”
Options were Agreed, Disagreed and May be.
Considering the responses, it was shown from the above pie chart that 15 responses (50%
approx) out of 30 responses agreed the above mentioned question, 3 responses (10% approx)
out of 30 responses were disagreed and rest 12 responses (10% approx) said may be.
So, lastly the conclusion had come that most of the consumer of FMCG goods were shifted to
different brands after implementation of GST or Post GST era.
 P a g e | 25

3.2 ANALYSIS OF DATA ON THE BASIS OF SECONDARY DATA

3.2.1 IMPACT OF GST BY ANALYSIS OF REVENEUE FROM OPERATIONS

(NET - SALES) OF SOME SELECTIVE FMCG COMPANIES:

(All figures ₹ in crores)

Years Years
Companies 2022 (₹) 2021 (₹) 2020 (₹) 2019 (₹) 2018 (₹) 2017 (₹)

ITC 55,341.27 45,485.13 45,619.70 44,995.65 40,627.54 40,088.68

Nestle 17,423.38 15,186.92 13,350.03 12,368.90 11,292.27 10,009.60

India Ltd.

Britannia 13,371.62 12,378.83 10,986.68 10,482.45 9,304.06 8,414.37

Industries Ltd.

Marico Ltd 7500.00 6,337.00 5,853.00 5,971.00 5,170.00 4,850.75

Dabur India 8,179.50 7184.73 6,309.80 6,273.19 5,592.29 5,290.65

Ltd.

Varun 10,595.83 6,729.11 4,876.45 5,615.66 3,862.28 3,062.59

Beverages
Ltd.
Hindustan 51,193.00 45,996.00 38,785.00 38,224.00 34,525.00 31,890.00
Unilever Ltd.

Colgate- 5,099.78 4,841.22 4,525.08 4,462.63 4,187.97 3,591.47

Palmolive
(India) Ltd.
 P a g e | 26

Revenue from operations (Net sales)

₹ 60,000.00

₹ 50,000.00

₹ 40,000.00
In Crores

₹ 30,000.00

₹ 20,000.00

₹ 10,000.00

₹- Colgate-
Nestle India Britannia Varun Hindustan
ITC Marico Ltd. Dabur Ltd. Palmolive
Ltd. Industries Ltd. Beverages Ltd. Unilever Ltd.
(India) Ltd.
2022 ₹ 55,341.27 ₹ 17,423.38 ₹ 13,371.62 ₹ 7,500.00 ₹ 8,179.50 ₹ 10,595.83 ₹ 51,193.00 ₹ 5,099.78
2021 ₹ 45,485.13 ₹ 15,186.92 ₹ 12,378.83 ₹ 6,337.00 ₹ 7,184.73 ₹ 6,729.11 ₹ 45,996.00 ₹ 4,841.22
2020 ₹ 45,619.70 ₹ 13,350.03 ₹ 10,986.68 ₹ 5,853.00 ₹ 6,309.80 ₹ 4,876.45 ₹ 38,785.00 ₹ 4,525.08
2019 ₹ 44,995.65 ₹ 12,368.90 ₹ 10,482.45 ₹ 5,971.00 ₹ 6,273.19 ₹ 5,615.66 ₹ 38,224.00 ₹ 4,462.63
2018 ₹ 40,627.54 ₹ 11,292.27 ₹ 9,304.06 ₹ 5,170.00 ₹ 5,592.29 ₹ 3,862.28 ₹ 34,525.00 ₹ 4,187.97
2017 ₹ 40,088.68 ₹ 10,009.60 ₹ 8,414.37 ₹ 4,850.75 ₹ 5,290.65 ₹ 3,062.59 ₹ 31,890.00 ₹ 3,591.47

From the above mentioned table and bar diagram the conclusion can be drawn:

 In case of ITC, it was seen that the net sales of 2021 was less as compare to that of 2020
i.e. it indicates negative impact. Expect that all the net sales of ITC had positive impact

 In case of Varun Beverages Ltd., the net sales of 2019 are much greater than 2020. So the
net sale of 2019 of such company indicates a negative impact. Net sales of others years had
positive impact.

 In case of Marico Ltd., the net sale of 2020 is less than that of 2019 therefore the net sales
of 2019 had a negative impact. Expect that all others years had positive impact.

 At last the conclusion stands, that most of the companies had a positive impact on their net
sales in post GST. So it can conclude that the GST had a positive impact on FMCG
sectors.

(Note: Assume that net sales factor to value the impact on FMCG product sales)
 P a g e | 27

3.2.2 IMPACT OF GST BY ANALYSIS OF REPORTED NET PROFIT

OF SOME SELECTIVE FMCG COMPANIES:

(All figures ₹ in crores)

Years
Companies 2022 (₹) 2021 (₹) 2020 (₹) 2019 (₹) 2018 (₹) 2017 (₹)

ITC 15,057.83 13,031.68 15,136.05 12,464.32 11,223.25 10,200.90

Nestle 2,390.52 2,118.41 2,082.43 1,968.44 1,606.93 1,225.19

India Ltd.

Britannia 1,603.19 1,760.03 1,484.30 1,122.20 947.89 843.69

Industries Ltd.

Marico Ltd 1,163.00 1,106.00 1,007.00 1,129.00 718.00 842.70

Dabur India 1,432.93 1,381.89 1,170.35 1,264.29 1,072.05 998.33

Ltd.

Varun 1,270.20 489.49 226.43 448.55 332.36 235.60

Beverages
Ltd.
Hindustan 8,818.00 7,954.00 6,738.00 6,036.00 5,237.00 4,490.00
Unilever Ltd.

Colgate- 1,078.32 1,035.39 816.47 775.57 673.37 577.43

Palmolive
(India) Ltd.
 P a g e | 28

Reported Net Profit

₹ 16,000.00

₹ 14,000.00

₹ 12,000.00

₹ 10,000.00
In Crores

₹ 8,000.00

₹ 6,000.00

₹ 4,000.00

₹ 2,000.00

₹- Britannia Varun Colgate-

Nestle India Dabur India Hindustan
ITC Industries Marico Ltd. Beverages Palmolive
Ltd. Ltd. Unilever Ltd.
Ltd. Ltd. (India) Ltd.
2022 ₹ 15,057.83 ₹ 2,390.52 ₹ 1,603.19 ₹ 1,163.00 ₹ 1,432.93 ₹ 1,270.20 ₹ 8,818.00 ₹ 1,078.32
2021 ₹ 13,031.38 ₹ 2,118.41 ₹ 1,760.03 ₹ 1,106.00 ₹ 1,381.89 ₹ 489.49 ₹ 7,954.00 ₹ 1,035.39
2020 ₹ 15,136.05 ₹ 2,082.43 ₹ 1,484.30 ₹ 1,007.00 ₹ 1,170.35 ₹ 266.43 ₹ 6,738.00 ₹ 816.47
2019 ₹ 12,464.32 ₹ 1,968.44 ₹ 1,122.20 ₹ 1,129.00 ₹ 1,264.29 ₹ 448.55 ₹ 6,036.00 ₹ 775.57
2018 ₹ 11,223.25 ₹ 1,606.93 ₹ 947.89 ₹ 718.00 ₹ 1,072.05 ₹ 332.36 ₹ 5,237.00 ₹ 673.37
.

From the above mentioned table and bar diagram the conclusion can be drawn:

 In case of ITC, it was seen that the net profit of 2021 was less as compare to 2020 i.e.
negative impact. The reason should be pandemic sititution. Expect that all the net profits of
ITC shows positive impact.
 In case of Britannia Industries Ltd., the net profit of 2022 was less than 2021. So the net
profit for the F.Y. 2021-22 of such company had negative impact. Net profits of others
F.Ys had positive impact.

 In case of Marico Ltd., the net profit of 2020 is less than that of 2019 therefore in FY
2019-20 indicate the negative impact. The reason should be pandemic sititution.
Otherwise all others F.Ys. Profits show positive impact.
 P a g e | 29

 In case of Dabur India Ltd., the profit for the year 2019 is greater than that of 2020 hence
its shows a negative impact. In this case also the reason should be pandemic sititution.
Except that all others profit shows positive impact.

 In case of Varun Beverages Ltd., the profit of 2020 was less than 2019 resulting negative
impact.

 At last, overall impact of GST on profits of the FMCG companies was satisfactory. So it
can be conclude that the GST had a Positive impact on Profits of FMCG companies.
 P a g e | 30

CHAPTER 4
CONCLUSION
OF THE
STUDY
 P a g e | 31

CONCLUSION OF THE STUDY

GST is very important in Indian indirect tax system which allows our country to negotiate in
the international trade forums aimed at increasing the taxpayer base by bringing SMEs and
the unorganized sector under its compliance. This will make the Indian market more stable
than before and Indian companies can compete with foreign companies.

GST brings in transparent and corruption-free tax administration, removing the current
shortcomings in indirect tax structure. GST is business-friendly as well as consumer-friendly
also. GST in India is poised to drastically improve the positions of each of these stakeholders.
A change in the taxation system which is better than earlier taxation system. This need for
change leads us to ‘need for GST’. GST is useful for the FMCG area because the industries
are saving an honest quantity of the logistic costs however it certainly, going to have a
fantastic effect on the world with inside the lengthy term. This has additionally permit not
unusual place guy to buy more and shop cash on their buy. As more than one taxes on an
items or providers are removed an unmarried tax comes into place, the tax share is anticipated
to be easy and less difficult to recognize and administrative the GST diverse indirect taxes.
GST implementation affected the customer the real advantages may be skilled through the
customer most effective whilst the applied tax financial savings through corporations with
inside the shape of enter tax credit score is transferred the FMCG area through decreasing tax
bracket and doubtless decreasing distribution fees for diverse corporations over the lengthy
run. There are a few times in which the tax fee beneath GST is better than the existing tax
rates, and in such instances, numerous sellers ought to growth their inventory degrees with
inside the run as much as GST.

GST has impacted the Retail and FMCG quarter via way of means of readjusting tax brackets
and doubtlessly decreasing distribution prices for numerous groups over the lengthy run.
Some groups have "gain" with decrease taxes and distribution prices, and consequently have
spoke back via way of means of growing product extent and reducing prices, even as others
might also additionally have "lost" with better taxes, and consequently want to compensate
via way of means of growing prices. This is why there's an ongoing try on the part of the GST
government to rationalize the tax rates. GST influences the FMCG region through readjusting
tax brackets and lowering distribution fees for numerous organizations. Some organizations
will gain with decrease taxes and distribution fees, and therefore may also reply through
 P a g e | 32

growing product quantity and reducing costs, at the same time as others may also lose with
better taxes, and therefore want to compensate through growing costs.
After questioning 30 retailers and wholesalers about GST it can be conclude that their
businesses had been affected due to GST. According to analysis it was seen that most of the
traders were agreed that the product (FMCG) price were increased after implementation of
GST. On the other that they also agreed that current tax system is very easier than of
previous.
It was also seen that during the post GST, the sales as well as reported net profit of some
selective FMCG companies were increased but it was also seen a little fluctuation in some
years the reason should be the COVID 19.
In this context it was mentioned that most of the traders were agreed that their sales was
reduced in pandemic sititution.
 P a g e | 33

BIBLIOGRAPHY

AUTHOR NAME OF BOOK/ RESEARCH PAPER

DR. CH SENGUPTA TAXATION II
PROF. REKHA D.M. SWARHI IMPACT OF GST ON FMCG SECTOR
AND CONSUMER AS STUDY

Website References:
www.Google.com
www.Moneycontrol.com
www.wikipedia.com
https://www.researchgate.com
www.cleartax.in
 P a g e | 34

APPENDEX

QUESTIONNAIRE

1. What is your Gender?

A) Male, B) Female

2. What is your Age Group?

A) 18-25, B) 26-33, C) 34-41, D) Above 41

3. Are you wholesaler or Retailer?

A) Wholesaler, B) Retailer

4. Do You Have GST Number?

A) Yes, b) No

5. Which type of FMCG Products do you trade?

A) Medicine, B) packaged foods, C) toiletries, D) beverages, E) both packaged foods
toiletries beverages.

6. What percentage of your goods gets expired?

A) 0%-5%, B) 6%-16%, C) Above 16%

7. Do you purchase your stock of goods by paying GST?

A) Yes B) No

8. What were the challenges faced by FMCG product traders during post GST?
A) Not aware of how to pay GST, B) Incurred losses, C) Slowdown in sale, D) others.
 P a g e | 35

9. Whether prices of FMCG products increased after implementation of GST?

A) Yes, B) No, C) May be

10. At the time of COVID 19, whether the sale of FMCG products declined?
A) Yes, B) No, C) May be

11. Whether customers had shifted to different brands after GST was implemented on FMCG
products?
A) Agreed, B) Disagreed, C) May be