Whatever the impact of GST on retail prices, the cost of running a business will be much reduced. Business can shop around knowing that tax has little bearing on the final cost. Highly efficient logistics setups will emerge to serve the immense scope of India. Reduction of inventory levels could save $200 billion in the capital.
General benefits to business
Whatever the impact of GST on retail prices, it is expected to considerably reduce the cost of running a business. All intermediary goods or costs of service providers will be discounted by the input credit. Tax is only paid at final sales. Effective tax on many traded goods is in excess of 30%. With prices lowered, this should spur a dramatic increase in sales volumes. Business can shop around knowing that tax has little bearing on the final cost.
Logistics
Customers will have greater scope to exploit price arbitrage. New logistics setups will emerge which are geared to serve the immense possibilities offered by India's vast marketplace (see comment 2). Ease and cost of doing business in logistics sector will be immediately impacted from lesser checkpoints, reduced inventories, reduced stock-holding costs, aggregation of operations and technology-driven enhancements, not dealing regularly with tax officials and simplified admin tasks. New Infrastructure and technology will bear down on costs and further improve the ease of undertaking transactions.
Whatever the impact of GST on retail prices, it is expected to considerably reduce the cost of running a business. All intermediary goods or costs of service providers will be discounted by the input credit. Tax is only paid at final sales. Effective tax on many traded goods is in excess of 30%. With prices lowered, this should spur a dramatic increase in sales volumes. Business can shop around knowing that tax has little bearing on the final cost.
Logistics
Customers will have greater scope to exploit price arbitrage. New logistics setups will emerge which are geared to serve the immense possibilities offered by India's vast marketplace (see comment 2). Ease and cost of doing business in logistics sector will be immediately impacted from lesser checkpoints, reduced inventories, reduced stock-holding costs, aggregation of operations and technology-driven enhancements, not dealing regularly with tax officials and simplified admin tasks. New Infrastructure and technology will bear down on costs and further improve the ease of undertaking transactions.
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