As India is moving forward along with the GST, there are several post-GST effects that are observed in the case of different sectors. After the introduction of GST, there are several sectors that are being benefited while others are in loss. If we talk about larger businesses and industries, they have to bear an additional burden in which invoices need to be generated every month. Small businesses, on the other hand, are benefited as they need not register under the GST if their annual turnover is less than 20 lakhs. In case, businesses whose annual turnover is up to seventy-five lakhs can get themselves registered in the composition scheme in which tax has to be paid at a very nominal rate. Let’s discuss the post-GST impact on the key sectors of the Indian Economy.
After the implementation of GST, the travel sectors in the starting month were facing issues, however, now they have been settled. Any change needs clarity, familiarity, and all the stakeholders need to adapt, adjust and adhere to time. In the case of travel and tourism industry, the GST rate for the tour packages has increased 0.5% – 1% due to which the players are not much affected.
Export is one sector that is benefited, after the introduction of GST in India. According to the Federation of Indian Export Organisations (FIEO), the Government of India has reduced the restrictions that were used to impose on the usage of the duty credit scrips. Now, the duty credit scrip is being given to the exporters by the Government as an incentive in order to promote export business. A duty credit scrip is a pass that allows import and export business to supply the goods without paying any amount on the duties. However, these can only be used to pay the basic customs duty and not for the IGST (Integrated GST).
The durable sector, as usual, is going to pass the burden of higher tax to the consumers and the buyers. It is because the industry is expecting only marginal price revisions. For instance, home appliances have become a necessity for consumer lifestyle which previously was sold at a tax rate of 27%, however, with the increase in this value up to 28%, the prices of such appliances are more likely to go up by 1-2%. This could impact the businesses as well as the consumers.
The textile industry is giving a positive response after the implementation of GST. It is because the textile value of cotton has been kept at a lower tax rate of 5% GST. The chairman of the Southern India Mills Association (SIMA) said that the industry was indirectly bearing numerous taxes and different types of cess which added in the cost in one way or the other which has now stopped after the GST.
Steel industry doesn’t seem to be happy after the introduction of GST in India. It is because the people running steel businesses in an unorganized way will be moving to organized form which might affect business due to lack of knowledge and provisions. GST is giving the unorganized players a choice to become tech-compliant for which they need to train them according to the industry standards.
After the GST roll-out, the ready to move in apartments are going to get costlier as the builders with large unsold properties and inventories are planning to pass the higher tax burdens to the buyers. The tax-rate of under-construction projects will go up to eighteen percent which makes an increase of six percent as compared to the previous prices which were twelve percent. However, the developers will be benefited for the properties that are still under construction or in the naïve stages.
The Way Forward
GST roll-out is expected to contribute to the ease of doing businesses and accelerate their ventures. Input tax credit is one of the biggest benefits of GST bill that the businesses can avail. The removal of cascading effect of taxes has proved to be a benefit for some industries. It is expected that the businesses benefited by the input tax credit will pass on the benefit to the consumers too which will not only accelerate the business but will also help to build the customer relationships. To clear the doubts related to the GST, one can visit the authentic website such as cbec where all the GST bill details can be fetched instantly.