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Subbu's Solution

Please tell me about the impact of GST on markets, earnings and on economy in general.
GST is a key indirect tax reform and, if implemented well, will change the face of indirect tax structure of India thereby boosting revenue of the Central government. However, in a hurry to meet the July deadline, we see too many gray areas that need to be addressed and full clarity on the impact of the same is yet to emerge. We need to wait to understand the exact impact of GST on government revenue as well as the prices of the goods and services. The industry is supposedly happy as they have to pay only one tax rather than multiple taxes. Some companies may be hit by a higher tax rate while others could benefit from lower tax rates. It is also difficult to predict if the company will retain the tax benefits or if it will pass it on to consumers.

Above that, we need to wait for few more quarters to see the exact impact of GST on industry earnings. The only thing we can say is that the unorganised sector will find it difficult to compete and the organised players may stand to benefit from this.

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