Economics Project

Indrojeet Datta 10 c
 What is gst
Goods and Services Tax is an indirect tax used in India on the
supply of goods and services. It is a comprehensive tax levy on
manufacturers, sale and consumption of goods and services at
the national level
Impact of gst on few of these products
• Maggi
• Beverages
• Dettol
• Mobile Phones
• Apperals
 maggi
The gst rate on maggi is 12%. Food giant Nestle will drop prices of
its Maggi ketchup, Cerelac infant foods and select dairy products
following the introduction of the goods and services tax (GST). With
the reduction in GST rate, prices are expected to be reduced by 4-
5%.The company said benefits of lower taxes wherever applicable
would be passed on to consumers.

Lowering the prices of maggi due to gst has affected the company's
sales and the company has suffered a heavy loss
 Beverages
The GST Council raised tax on caffeinated beverages from
12 per cent to 28 per cent and imposed a 12 per cent cess,
taking the total to 40 per cent.
Reduction of taxes on juices would give a boost to local
horticulture sector and improve the lives of farmers, from
which the industry sources fruits, Indian Beverage
Association (IBA) said in a statement.
the juice-based drinks from the current GST slab of 12 per
cent to 5 per cent to give a boost to the local horticulture
sector and improve the lives of farmers
But gst has injured the beverage industy a lot. The sales of
many beverage companies were down due to the increase in
gst
 dettol
It is stated that hand sanitizers attract GST at a rate of 18%. Sanitizers are
disinfectants like soaps, anti-bacterial liquids, Dettol, etc which all attract duty
standard rate of 18% under the GST regime.

Gst has pros and cons in hygiene products

Reducing the GST rate on sanitizers and other similar items would lead to an
inverted duty structure and put the domestic manufacturers at a disadvantage vis-a-
vis importers

Lower GST rates help importers by making them cheaper. This is against the nation’s
policy on Atmanirbhar Bharat. Consumers would also eventually not benefit from
lower GST rate if domestic manufacturing suffers on account of inverted duty
structure

The finance ministry says lowering the gst to 12% would go against domestic
manufacturares as it would lead to inverted rate structure as the inputs on these
product attract 18% of gst.
 mobile phones
Under the VAT regime, mobile phones were taxed at 5% along with 1% excise duty. In
some states like Gujarat, the tax rate was as high as 14%. Thus, anyone would purchase
from selected dealers where the price was low. But, under GST, 18% tax is charged all over
the country.
In today’s’ generation, mobile phones have become a necessity. The sales of mobile
phones are increasing day by day for the mobile phone dealers having GST registration.
Earlier, the mobile phones were exempted from 10% social welfare surcharge. But the
Union Budget 2020 has re-imposed social welfare surcharge on imported mobile handsets
over and above existing 20% basic customs duty, making them costlier than the locally
made ones.
Before GST, excise and VAT were charged on mobile phones. The VAT rates varied from
state to state, so it was difficult to set a uniform price for the mobile phone. Under GST, the
tax rate is the same across the country, and thus a uniform price can be set for a mobile
phone.
Overall the mobile phones have become cheaper due to gst everyone including consumers,
government and the mobile phone manufacturers have beniffited
 Apparels
Under both categories, any piece of apparel or clothing would be taxed
at 5% GST if the taxable value of the goods does not exceed Rs. 1000
per piece. As per schedule II of Chapter 62, all types of apparel and
clothing of sale value exceeding Rs. 1000 shall attract 12% of GST.

Due to high tax rate the apparel industry has suffered some loss in the
beginning but its giving good results so far as now there are more
registered tax payers and less costing on products.
 Benifits of gst on the government

• GST will add to government revenues by extending the tax base. Fostering
production: GST will provide credit for the taxes paid by producers in the goods
or services chain.
• Goods and Services Tax (GST) was launched with the motto of ‘One Tax One
Nation’. Common and accountable markets help attract foreign investment and
promotes Indian products at an international platform.
• Attracting foreign investment will not only help Indian products and services
reach a global platform, but also give a boost to the Import and export industry.
The more trade takes place the better job opportunities are created.
 Benifits of gst on consumers

• Since GST is charged at all levels of the supply chain, a considerable difference can
be found in the prices of the products. While consumers would have to pay separate
taxes before, they now have to pay just one tax. A customer will be able to avail the
advantages of GST cost that will be lesser than VAT or service taxes.
• One of the major advantages of GST is the fact that a consumer will be able to avail
the product at the same price anywhere in the country. However, the products that
fall under the GST tax-slab come under this advantage.
• The entry of GST into the Economy has made the tracking of taxes easier than ever
before. Since GST works on a computerized system, consumers can be fully aware
of the amount they are paying in taxes for the goods and services.
 Benifits of gst on producers

• Producers could be wholesalers, retailers, importers and exporters, etc. One of the
major advantages is the transparency that comes with GST. It makes the business
transaction easy for traders as they have to pay GST for everything they purchase
along the supply chain.
• This is another major advantage for any business under the GST tax regime. With
the clarity in market processes, a better flow of action between the various traders
can be maintained.
• Digitalisation has brought about immense ease in transactions to society and has
made life much easier for both consumers and traders. GST brought the recording
of every financial transaction on its system which makes it easier for small and
large businesses to maintain their transactions’ record.
 some negative impacts of gst

• Some goods and services are now

selling at a much higher rate

• A lot of industries and sectors have

suffered huge losses
Thank You