Goods -

FMCG &
Retails

By, Group 7
37_Shruti Yadav
66_Somashekhar Chougale
23_Soumya Ranjan
05_Sreelakshmi P
48_Srinath Suresh
01_Srinjana Saharaia
FMCG or Consumer Packaged Goods(CPG) are products that are sold quickly
and at relatively low cost.
Huge contribution to GDP
Fourth largest sector in the Indian economy.
Principal constituents are household care, personal care, food and beverages

Goods - FMCG & retail

 CONCEPTUAL ASPECTS OF GST

Supply- FMCG products fall under the category of goods under GST.
Value of supply- If there is an import of FMCG goods then the applicable taxes are
customs(10%)+ education cess (4%)+ IGST + compensation cess.
Place of supply- where the movement of goods terminates for delivery to the recipient.
Time of supply- Date of issue of invoice or the last date on which supplier is required to
issue the invoice.
Registration- Threshold limit of aggregate supply of goods is Rs 40 lakh.

Goods - FMCG & retail

 IMPACT O N THE SUPPLY CHAIN

Usually long supply chains with several value chain participants - physical as well as online
channels
1. Pre-GST-
a.Influenced by area-based exemptions, taxes on entry and CST
b.No credit for Service tax
2.Post-GST-
a.Incentives to consolidate warehouses
b.supply-chain design based on customer service and logistics cost
c.Outsourcing as ITC is available

Goods - FMCG & retail

PRE-GST & POST-GST TAX RATES

Pre GST most of the FMCG products were taxed at rates 22 to 24%. Example: tax on
detergents was 23% while skincare products including shampoo were taxable at 24-
25%.
The average tax rate on FMCG product before GST was not more than 24-25%.The
post GST tax rate for the FMCG industry is capped at 18-20%

Goods - FMCG & retail

 ISSUES AN D CONCERNS

Transitional Credits- Due to heavy taxes , FMCG had set up units in different states to
trade within them.
Frequently changing rates- Unstable tax rates has led to immense confusion.
Anti- profiteering issues- The transitional credits and frequent changes in tax has rising.

Goods - FMCG & retail

ISSUES WITH COMPLIANCE AND
SUGGESTIONS

Requirement to generate E-way bill

Exemptions are made available for end purpose of profucts
Recommended to review HSN masters
Non availability of input tax credits may increase
promotional expenses

Goods - FMCG & retail

 IMPACT O N TOP-LINE AND
BOTTOM-LINE

Top-line -
Post GST the sales of the goods dropped by 2.3% due to affect in the rural
demand
Sales increased approximately 7.5%-9%, after a year post GST.

Bottom-line -
Net income in the FMCG sector started rising by 2.4% in the second
quarter of FY17-18
Adjusted profit for the FMCG brands rose to 14-16% for different brands.

Goods - FMCG & retail

 CONCLUSION

1. GST introduced to smoothen tax process

2.Aims at reducing corruption
3.FMCG one of the sectors which benefited from GST
4.Reduction in overall tax-rate

Goods - FMCG & retail

THANKYOU
!