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Introduction to Goods & Service Tax (GST) The ‘Goods and Services Tax’ has been rolled out from the 1st July 2017 in India, making the dream of ‘One Tax, One Nation’ a reality. As expected, a lot of hue and cries are being seen all across the country, mostly related to the MRP and supply of goods and commodities. The government is making all it’s effort to enlighten people about GST and is actively addressing all the doubts and rumors circulating in the air. Goods and Services Tax (GST) is an indirect tax (or consumption tax) imposed in India on the supply of goods and services. GST is imposed at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer. Goods and services are divided into five tax slabs for collection of tax - 0%, 5%, 12%, 18% and 28%. 32% However, Petroleum products, alcoholic drinks, electricity, are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax regime. Citation There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold. In addition a cess of 22% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products. Pre-GST, the statutory tax rate for most goods was about 26.5%, PostGST, most goods are expected to be in the 18% tax range.The tax came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Indian government. The tax replaced existing multiple flowing taxes levied by the central and state governments. The tax rates, rules and regulations are governed by the GST Council which consists of the finance ministers of centre and all the states. GST is meant to replace a slew of indirect taxes with a federated tax and is therefore expected to reshape the country's 2.4 trillion dollar economy, but not without criticism. Trucks' travel time in interstate movement dropped by 20%, because of no interstate check posts. GST is one of the biggest tax reforms since independence. GST will subsume almost all the indirect taxes levied by state and central government and will make a significant impact across industries. The impact of GST on retail sector is going to be positive as it will bring down total indirect taxes, increase supply chain efficiency and facilitate seamless input tax credit. After implementation of GST, state boundaries will be irrelevant from taxation and

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documentation point of view. Vanishing state boundaries will reduce the complexity for retailers and increase the distribution reach as well as efficiency.

GST is charged at the national and state level at similar rates for the same products and it also replaces almost all the current indirect taxes that are imposed separately by the Centre and the States. Goods & Services Tax is a destination based tax which means that the tax is paid at the place of supply. Some of the State taxes that will be subsumed under GST are –

Some of the Central taxes that would be subsumed under GST are –

 Central excise duty  Duties of excise  Additional duties of excise I. Goods of special importance II. Textile & textiles product Page-3

 Additional duties of custom or CVV  Special additional duties of customs

Benefits of GST 1. Eliminating the cascading effects of taxes 2. Tax rates would be comparatively lower 3. Reduce tax evasion and increase the revenue and GDP by widening the tax base 4. There would be seamless flow of the input tax credit 5. Price of the goods and the services would fall 6. There would efficient supply chain management 7. It would promote the shift from unorganized sector to organized sector. 8. It would eliminate 17 indirect taxes and therefore the compliance cost would fall

Eligibility Its eligibility would primarily be decided on the basis of turnover. Small taxpayers may thus either be exempt (turnover (Rs. 20 lakhs) or they may opt for the Composition Scheme (turnover (Rs. 75 lakhs). The medium and large taxpayers will have to file all GST Returns. The diagram below would help us to get the concept of working of GST in a better way.

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All the taxpayers that are eligible for exemption will have the option of paying tax with Input Tax Credit benefits through Voluntary Registration. Page-4

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The list of the exempted goods and services would be common for the Centre and the States/U.T.s.

Working The tax cycles for the Mid-Size & Large Taxpayers are different – 1. Firstly, the seller files GSTR 1 (before the 10th of the following month) by recording all the sales 2. Then the buyer reviews the sales in GSTR 2A 3. The buyer would then approve whether the sales are legitimate or not and file in GSTR 2 (before the 15th of the following month) 4. If the buyer modifies the sales that were earlier filed, then the seller can see such kind of modifications in GSTR 1A and can approve or disapprove And thus finally when, both the buyer as well as the seller approve, GSTR 3 (before the 20th of the following month) is generated with the payment of tax

Types of Taxes The various types of taxes that are under GST are – 1. If the supply of the goods and the services are made within the state, then the two types of taxes which are applicable are, the Central Goods and Services Tax (CGST) and the State Goods and Services Tax (SGST). Page-5

2. If the supply is made across the state, then Integrated Goods and Services Tax (IGST) is applicable.

Cess Cess will be chargeable on the Value of Supply for 5 years on the taxes on certain specified goods and services. But in the case of import of goods into India, cess would be levied but then collected on customs duties under the Customs Tariff Act, 1975. The only exception is that no cess would be levied by a taxpayer who opts for the composition scheme.

Import & Export In the case of exports, the exports would be treated as zero-rated supply. So, no tax is payable on the exports but Input Tax Credit benefits would be allowed. And In the case of imports, the imports would be treated as inter-state supplies. Hence, IGST would be applicable in addition to the customs duties.

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How will GST impact the Retail Sector Retail sector is an integral part of India’s economic system. It is one of the booming sectors, which works across all kind of industries. Retail sector is responsible for providing goods and services in an effective way to consumers. Therefore, its positioning in the present system needs to be understood in the light of GST, which will not only open up a gateway for potential markets to grow but also for existing retailers to grab benefit from it.

Enlistment of benefits in Retail sector after GST: Hitherto known tax structure imposed various kinds of excise duties/taxes on almost all kind of goods and services. The new tax regime is effectively calculated to prove beneficial in a seemingly long run of business. The very fact that a long list of taxes will be replaced by a single tax to promote the idea of ‘One Tax, One Market, One Nation’, demonstrates that a call for change in the taxation policy will incur benefits for all. This proclamation seems to set the taxation rightly, in case the effective takeaway from Goods and Services Tax (GST) turns out to be positive. The four major ways in which Retail sector would be impacted are(a) Increase in Circulation and outreach of all the goods and services. This is primarily because taxes levied on crossing of the state boundaries would be non-effective post-GST. (b) Cascading of taxes would turn irrelevant in such a taxation scenario. All the indirect forms of taxes would be reduced to zero value. One tax call for the whole country would surely prove to be a transformation in the economic view.

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(c) There would be an increment in the supply chain management. The effectiveness of the retail activity would work on a smooth and effective path after the introduction of GST. (d) Above everything else, GST will facilitate unified input tax credit. The design of the supply chains will be reworked so that maximum benefit is to be taken from the taxation process by availing tax credits. The supply chain network will also witness a reformation given the fact that there will be a lot more opportunities for cost saving in tune of 1%-1.15% of sales.

Retail business- Pre-GST and Post-GST: Retail business is the backbone of the Indian economy and accounts for about 10 percent of its GDP. The Indian retail market is estimated to be US$ 600 billon and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people. Given such a growth rate in international business, it is of utmost importance to bring new changes in the sector for propagating its growth and outreach. Analysis of both the sides will help us weigh the benefits of GST implementation. The drafted GST model law, GST rules and its documentation reflects measures taken by Government to make people GST ready. In the Pre-GST phase, retailers were entitled to 30% indirect taxes such as Value-Added Tax(VAT), Central State Tax(CST), excise duty, service tax on warehousing, intra-state, inter-state, and more. But now in the post-GST phase, everything getting replaced by a single tax marks a radical move. On the face of it, it might take retailers a little time to understand the technicality which goes into making of such a set-up. But ultimately, the retail business will reach a new height. From storage to supply chain to distribution to promotions to everything else which combines in the process of retail business will be affected by GST. The flow from supplier’s end to consumer’s end will work in transparency. Remodeling of each and every strategy is the effective need of the hour. The complexity in the retail Page-8

business will not be visible anymore if the business is carried on under registration act of GST. The proper tax filing is of high importance in all of it. Free-flow of goods across the nation is set to come into effect. The tax burden on retailers will lessen as we would see how a simplified tax structure will be brought into effect. The cost saved on maintenance of warehouses in different states will initially reduce the input value, which used in making of it available. Thus, all in all, post-GST regime seeks to assert an effective and efficient channel for retail business. It propagates better opportunities for growth not just for surviving segments and industries but also for new retail business aspirants.

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5 RULES OF ‘GST’ FOR RETAILERS The GST taxation has brought a lot of changes in the pricing strategy of the commodities and product. This new tax amendment has made business very simple as a range of indirect taxes has been submerged to form a single provision. Almost every segment of the business has been affected by this amendment. The retail sector has been profoundly impacted by the GST taxation amendment. In the previous year, the retailers had to face a lot of confusions regarding this new concept. Moreover, the implementation of the norms of the new tax regime took too much time to get introduced. The confusion also raged among the consumers. Now, the confusion has been eradicated to a huge extent and the effect is becoming clarified. The new tax regime took a huge turn and witnessed a 2-crore registration. At this point, every retailer needs to incorporate a record keeping and profound accounting system. This cost around INR 5000-10,000 per month extra. The organized retail segment is still less than 20% of the entire retail industry. On the other hand, the e-commerce part of the retail industry is just 7% of the total volume. Here are the top 5 GST rules a retailer should know.

1. E-commerce as per GST As per Section 43B(d) of the Model GST Law, e-commerce retail platform is an electronic network via which receipt of a supply of goods and services and fund and/or data transmission takes place. The consumers find the products or services using the internet to make a buying decision without physically visiting the brick and mortar store. A person, who is supplying services or goods with his account, is not considered as an e-commerce operator. On the contrary, a person, who is providing knowledge and infrastructure for the supply of goods and service for other businesses, is an operator. For an instance, Flipkart is an operator when it is allowing the use of its platform for the other businessmen to cater products. In the same way, Flipkart is not an operator when it is selling its own products.

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2. Tax Collection at Source (TCS) As per the GST rules, Section 43C(1) depicts that the operator of ecommerce can collect or deduct a particular amount from the payable amount to the supplier in accordance to the supplies done through the ecommerce platform. This is called TCS.

3. Registration and threshold exemption As per Section 19R/W, Schedule-III of Model GST Law, irrespective of the evaluation of the supply chain, an e-commerce operator or a retailer needs to register the business. All the retail business is liable to GST registration. There will be no relaxation regarding threshold exemption. As mentioned earlier, irrespective of the supply chain valuation, the supplier needs to register his business based on the same section of the law.

4. Tax replaced by GST The implementation of GST has witnessed the replacement of various tax regimes. The list of such taxes is mentioned below. Central Excise Duty Value Added Tax Service Tax Countervailing and Special Countervailing Duty Entertainment Entry Luxury Purchase Lottery Advertisement Octroi

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The short-term effect of the GST tax regime will be inflation. The tax rate under the new regime varies between 5% and 18%. The restaurants, movie theaters, and other entertainment centers will increase the price of their services. On the contrary, Liquor and petrol got exempted from the tax regime. Many experts feel that this is a part of a capitalist conspiracy as these two commodities are one of the major sources of revenue for the government. The exemption of petrol will also make supply logistics cheaper. This will help the retail industry to grow further.

5. Uniformity will prevail Both the organized and unorganized retail players will be well benefitted due to the one-stop tax solution. The uniformity of the tax regime will make it more clarified and the tax credit will become more available for the government. The smaller retailers with a turnover within INR 50 Lakh can enjoy a relaxation in account maintenance and tax payment. The threshold for registration is INR 20 Lakh. E-commerce, on the other hand, will be very much benefitted by the uniformity. The different state tax schemes will be singled. The benefits of GST regime will be visible soon enough. The consolidated tax regime will reduce confusion and downtime to do business, practically boosting all types of retail ventures.

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THE IMPACT OF ‘GST’ IN RETAIL MARKET While GST has been implemented, let’s see what will be the impact of GST on Indian Retail Industry and which changes will this industry need to imbibe to become GST ready.

1. Less Taxes In the pre-GST tax scenario, retailers are entitled to about 30% indirect taxes such as VAT, CST, excise duty, service tax on warehousing, Octroi and many more. GST will lessen the retailers’ tax burden as it will streamline everything into single tax. The cascading of taxes will be done away with and a simplified tax structure will be come into effect.

2. Free flow of goods across the nation After GST implementation, state borders will be unconnected from taxation and documentation point of view. This will result into free flow of goods across the nation without any kind of barriers. GST will reduce the complexity for retailers and make the distribution channel efficient.

3. Streamlined supply chain GST will affect the warehouse networks of retail businesses. Retail businesses will no longer require warehouses in every state they operate due to abolition of CST under GST law. Logistics will become efficient too as state border check posts will go irrelevant. Due to decrease in long queues and wait time and free-flowing of goods across the nation, overall lead time of retail businesses will also improve.

4. Gifts, free samples also taxable GST law is based on supply of goods rather than manufacturing or sales. Under GST, any supply without consideration will attract tax. Retail sector comes up with many offers like buy one get one free or some freebies on larger goods, every now and then. Once GST comes into action, tax will be levied on such gifts too. This clause will affect promotional activities of retail sector as under current taxation structure, such goods are tax-free.

5. 4Changes in decision making From supply chain to distribution to promotions, every strategy of retail industry will be affected by GST. Retailers will have to re-think these Page-13

strategies and re-model their network. Retailers may need to revamp the pricing policy of their suppliers in view of enhanced credits that may be available to suppliers in GST regime. Making necessary changes will make it easy for them to comply with GST.

6. Growth of Retail Market GST will unify the markets as there won’t be state boundaries to hinder their business. GST will streamline their intra-state as well as interstate transactions. Retailers can expand their business beyond one state with ease due to one-time registration of their business. This will also contribute towards the growth of the retail market and help boost the economy of the country.

7. Overall impact of GST on retail sector Conclusively, the impact of GST on retail sector is going to be positive from both taxation and operations point of view. Retail businesses will flourish more, thus contributing to overall growth of Indian economy. GST will depose total indirect taxes, upsurge supply chain efficiency and facilitate seamless input tax credit. The end price for consumers will also reduce because of GST. Except some clauses, GST will benefit retail sector in a big way.

Reductions in Taxes: The primary impact of GST will be a significant reduction of the tax burden on the retailing sector. Under the previous tax structure, most of the retail products are subject to various taxes like Excise Duty, CST, VAT, Service Tax, Octroi and Entry Tax. The Input Tax Credit is available on VAT but not on the Service Tax and Import Duty. But during the GST regime, taxation will be applicable from the manufacturer point to the consumer point and Input Tax Credit will be available on every level. GST will make a tremendous impact on Retail, and every business for that matter, by eliminating the cascading effect of taxes. This will help the Retailers in exploring the boundaries of the dynamic market, leading to a better growth. More Opportunities and Increase in Competition: In the previous tax scenario, different states imposed different VAT rates on the same type of Goods and Services. Online commercial dealers list sellers who are charged lower taxes, thus making the product cheaper than the local retail prices. The e-tailers negotiate exclusive tie-ups and re-structure their transactions to extract maximum benefits from tax arbitrage. But with the implementation of GST, there is going to be a standard tax rate for every item and tax arbitrage will no longer be practicable. This will deflate the gap between the online and offline sellers to the same level when pricing and costing are concerned, thus creating healthy competition. Tax on Promotional Schemes and Gifts: Page-14

Retailers, offline or online, currently offer various marketing promotions, gifts and schemes like ‘One plus one offer’, to boost their sales. Previously, the free products and free samples are not accountable to Sales Tax. But as per the model GST law, any kind of supply without any consideration will attract a certain amount of tax. When such features will be included for taxation, it will cause an increase in the promotional costs and also pose a challenge for the Retailers as they will have to adapt to the new conditions and come up with better and more creative strategies to market their product attractively. Minimisation of Check-Post Related Compliances: The Intra-state and Inter-state movement of goods is a very tiresome task and consumes a lot of time and money, as there are a number of check-post compliances that have to be carried out. But with GST, things will change. The primary objective of GST is to transform India into a unified common market. This will provide a smoother and hasslefree movement of goods within the State and across the State borders. However, the model GST law does empower the Government to prescribe proper documents in the case of movement of goods having a value above Rs50,000. Uprooting of the Unregistered Traders: In the case of offline sales, GST registration is only mandatory for the traders having a turnover of Rs. 20 lakhs. But, if a trader wishes to sell through the online channels, he is required to register himself on the GST portal, irrespective of the turnover. Thus, the unregistered traders will be forced to move out of the online system. Consequently, all the major sellers will register for GST and charge taxes at a common standard rate, creating a level playing ground for all the sellers, in terms of pricing of a product. The changing dynamics will prove to be a surmountable challenge for the Retailers and will help them in outstretching the market boundaries, leading to a better growth.

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Benefits of GST on Retail Sector The benefit of GST on retail sector will be huge. Indian Retail sector is one the fastest growing industry in the world. It is expected to grow to1.3 trillion USD by 2020, registering a CAGR (Compound Annual Growth Rate) of 16.7% over the 5 years ranging from 2015-2020. India is 5th largest retail destination in the world. The retail sector is booming everywhere be it metro cities or the Tier-II and tier-III cities. The Government of India has introduced major reforms to attract FDI in the retail industry. The government has approved up to 100 % FDI in single brand retail and 51% in the multi brand- retail. All of these stats signify that the retail sector is as dominant as ever and any reform in the country which anyhow affects the working of the sector shall have a huge impact on it. And GST is no ordinary tax reform. It is one of a kind reform which is poised to change the scenario of taxation in the country and legitimately its effects on the retail industry must be considered.

The followings are the benefits of GST on retail sector 

Reduced Taxes

GST will reduce the tax burden on retailers as they pay many different forms of tax in the current scenario such as CAT, CST, Octroi, service tax, and much more. GST will streamline everything into one single tax so that it will be easier for the retailer to understand the taxation and to pay it in one shot. 

Seamless Input Tax Credit

GST will reduce the burden of tax on the retail sector as it will set off tax starting from the producer’s point to the customer point. GST will make an impact on the flowing effect of taxes and help to streamline into one category. 

Increased efficiency in supply chain

Since the retail business can be carried out in every state upon single registration, the retailers will not have to maintain warehouses in every state, and this will be very beneficial regarding cost to the retailer. The transportation industry will flourish as they would carry more goods from one state to the other as it will become easy to transfer goods under GST. The lead time will also reduce in transporting the goods as the inter-state Page-16

boundaries would be more free-flowing. GST will help the retail sector become more efficient in their operations. 

Tax on promotional items and gifts

In the new GST model, any supply without consideration will attract tax and therefore, everything will have to be accounted for. The retailers would give out gifts and promotional items with products as a part of their marketing strategy which used to be tax-free in the current taxation system. When the GST gets implement, no such rule will be applicable and the retails will have to pay tax on the gifts and promotional items as well, therefore, re-think their promotional strategies 

Growth of Retail Market

GST will lead to the unification of markets as it will streamline the state and the central tax and eliminate all the confusion of taxation in different markets. The retailers can easily expand their business beyond boundaries as they have to register their business only once and then can carry operations in all the states. This will also contribute towards the growth of the retail market and help boost the economy of the country. 

Better strategies

GST will force the retailers to re-think their supply chain strategies and re-model their network as it will open a lot of doors and opportunities for retailers to expand their business. It will give them the freedom to draft better business strategies and implement it for further growth of the retail sector. 

Reduce complications

The retailers would be able to carry out the business with more ease as the taxation, and other policies would be streamlined under the new GST rules, and they would not have to waste their time in paying various taxes and waiting to fulfill all other policy requirements of the current taxation system. 

Beneficial for start-ups

The retail sector would start attracting a lot of start-ups as they would have to register their business only once and also claim the benefits of taxation for start-ups under the new GST laws. They would also be able to

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carry out business operations more freely with the new policies in place and would get more attracted to join the retail sector.

Conclusion of GST on retail sector There are many more advantages of GST on retail sector under the new GST laws and it would be a great boost for the retail sector as the policies and taxation would be streamlines under one head. The businesses would flourish more contributing to the growth of the retail industry and in turn of the economy as they would be able to carry out the activities without any hindrances, more freely, and be able to expand the business into different states without worrying about the additional costs. The supply chain will benefit tremendously as the cost of transport and warehousing will reduce under the new GST laws and help the retailers scale their profits, which could also lead to reduced prices for the final consumer over a period of time. The retailer can directly pay the taxes online and will not have to go through a middleman.

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Valuation of MRP Goods in GST Regime The Revenue Secretary Dr. Hasmukh Adhia said that a Central Monitoring Committee has been constituted to assess the situation of pricing and supply of commodities, after the rollout of the Goods and Services Tax (GST). Addressing a press conference in Delhi, Adhia said meetings are being chaired every week with the aforementioned committee, headed by the Cabinet Secretary. He said, “A committee has been constituted comprising 15 secretaries from departments that are in direct contact with consumers, to monitor commodity pricing and client groups. Although no field work is involved, officials will have to monitor four to five districts along with the assigned Link officer”. When queried about the initial feedback received after the implementation of GST, Mr. Adhia revealed that the new taxation framework has been well received. He further also adds that situation is being closely monitored by the all the competent departments. “The GST has been well accepted. All state governments other than Jammu and Kashmir have complied with all norms. I would urge that if there is any difficulty, please give us feedback, since it is important for us to know. So far, no problems have been detected,” told Hasmukh Adhia.

Example of 1.MRP valuation under GST Let’s consider an example of ABC, a manufacturer, selling tools and valuation of supply under gst hardwares as polishers, drills, spades etc. It sells a polishers to XYZ a wholesaler. The MRP is Rs. 5,500 but XYZ sells it for Rs. 1000. The invoice looked like

Polishers Add: Excise @ 12.5% Subtotal Add: VAT @14.5% (on subtotal) Total

1000 125 1125 164 1289

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2.Value of supply under GST The value of goods or services supplied is the transaction value such that the price payable, which is Rs 1,000 in the example. Suppose that CGST=9% and SGST= 9%

Polishers

1000

Add: CGST @9%

90

Add: SGST @9%

90

Total

1180

GST on MRP or Discounted Price Responding to question raised on the Maximum Retail Price (MRP) of commodities under the GST, Avinash K. Srivastava, Secretary-Department of Consumer Affairs, clarified that all distributors and manufacturers must print the complete details of the original and revised MRP on the product. “The retailers must furbish all details of price and the revised rate. If there is an increase, an additional notification needs to be sent out, apart from printing both rates on the product packaging,” he said. Adding to above statement, Adhia said dealers registered under the GST Composition Scheme do not have to show tax, while other registered dealers will have to clearly show the tax split up. He also revealed that while commodities do not attract any cess, but, vehicles crossing state borders will continue to be charged, unless they have a national permit. “22 states have removed check posts so far, and we are expecting the others to comply as well. The tax on vehicles is on crossing borders, and not on the goods being transported. Therefore, that will have to be paid,” said Adhia

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Goods and Services Tax (GST) help consumer to save more.. The above line is true because in earlier law when we bought goods then we also bought tax tax i.e knows as cascading effect also known as tax on tax ; but after implementaion of GST we will buy goods not tax…whole tax whether it is of central or state it will be adjusted of net off. May be some goods go high rate due to hight tax rate but in totalty we will be benifited by GST. Retail business wil also be benifited by this because india is not a manufacturing country maximum goods consumed here are from other countries ..in earlier law we have no option to adjust the intersate tax (between two sate) so goods we bought from delhi and consumed in U.P we also consume tax because tax on Delhi goods is not adjustible in U.P vat. Now GST erases this cascading effect tax on Delhi goods can be adjusted in U.P thats why it is MAJOR TAX REFORM IN INDIA. By applying the above views you can understand how retail business will be benifited. Below five factors will significantly change the dynamics of the retail sector in India: a. Reduced taxes – In the current tax structure, most of the retail products are subject to 30 % indirect taxes on average. This includes excise duty, VAT, CST, service tax on warehousing, consulting and rent, Octroi and entry tax. The main impact of GST on retailers will be a significant reduction of the tax burden on the retailers. b. Seamless Input tax credit – In the current tax structure, input tax credit is available on VAT but not available on service tax and import duty. In the proposed GST regime, there will be set off on taxation starting from producer’s point to the consumer point. GST will make an impact by eliminating the cascading effect of taxes thereby reducing the total tax burden on the retail sector. c. Increased Supply chain efficiency –Major impact of GST will be on the warehouse networks of retail industries. As CST is abolished, Industries will have no motivation to operate warehouses in each state wherever they operate. This will lead to 20 % – 30 % consolidation of warehouses. Transportation will benefit due to state boundaries becoming insignificant. The long queues and wait time at check posts and state boundaries will be reduced further reducing the lead-time. The impact of GST will be evident on supply chains, as their designs would be efficiency-oriented and not in alignment with the taxation system. d. Tax on gifts and promotional items – As per the model GST law, any supply without any consideration will attract tax. It is a common practice in Indian retail sector to offer free products for promotion or one plus one free offers. In the current taxation system; these free products, samples and gifts were tax-free. Once GST is implemented, such gifts will also be considered for tax and the retailers would have to rethink their promotional strategy. Page-22

e. Better Opportunities & Growth of Retail Market – Upon implementation of GST, analysts predict unification of markets. Thus, biggest of the impacts of GST will be in the widening of potential markets for the retailers. Retailers would be ready to explore markets across diminished boundaries leading to better growth of the retail market. The impact of GST on retail sector will be very positive from both taxation and operations point of view. Retail industries will have to re-assess their current supply chain strategy and re-model their network. Supply chain network design will be a critical activity for the retail industries as it offers the opportunity of cost saving in tune of 1 % – 1.15 % of sales.

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