Goods and Services Tax (GST): Benefit for Small Retailers
Goods and Services Tax (GST) has replaced the complex multiple indirect tax structure from 1 July 2017. GST is levied as a tax on supply of goods or services. Indian retail sector is comprised of organized retail and unorganized retail. The share of organized retail in India is still less than 20 per cent and majority contribution is of unorganized sector. The E-commerce sale is still less than 7% of overall retail sector sales in India. The total registered tax payers under Excise, Service tax and VAT are only 83.5 lakhs and likely to increase to 2 crore in goods and services tax (GST). GST might have negative impact for some sectors in India for short-term due to tax rate impact on existing stock during transition or increase in the tax rate post-GST regime as compared to existing rates. As far as organized retail is considered it would have a positive impact but for the entire retail sector. Transaction in the retail sector is carried out mainly through cash.