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.


Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

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