Page 20 - SPARK Q1 '18

Assessing the impact of GST

The Goods and Services Tax (GST) will be a comprehensive
tax on manufacture, sale and consumption of goods and ser-
vices throughout India. It will replace the plethora of different
taxes that the Central and State governments levy separately.
Even a tiny change in the tax chain leads to a domino effect;
we can very well imagine the radical changes that would be
brought in by the GST. The new tax law will bring far-reaching
reforms, affecting every member of the society: from the
common man on the street to an entrepreneur to a bureaucrat
to an industrialist.

Effect of GST on common man: Products which may get costlier
 Mobile bills along with Internet packs
 Hotel and restaurant bills
 Transportation, including air travel, railways, and cab services
 Luxury cars
 Jewelry
 Cigarettes/other tobacco products
 Courier/DTH services
 Aerated drinks, for example, Coca Cola, Pepsi, etc.

Products that may get cheaper after GST implementation
 Online Shopping (Amazon, Flipkart, etc.)
 Movie tickets
 Fast moving consumer goods (FMCG) goods like shampoo, processed foods, etc.
 Branded apparel
 Pharma products
 Paint, cement, and other construction material
 Fan, water heater, air cooler, TV, and other electronic goods

The Bottom Line

Goods and Services Tax, hailed as one of the most powerful tax reforms which India has ever seen,
purports to do away with the multiple tax regulations on most of the goods and services. GST would
change the current tax regime of production-based taxation to a consumption-based system. There is
no doubt that the corporates would benefit once the GST has been rolled out; however, the advantages
to the common man are still speculative. I hope that the end consumer would also reap the benefits of
the new tax regime, once the business houses have transitioned completely to the new tax structure