Nation’s largest tax reformation GST is a reality now. The month after the rollout has seen a plethora of confusion along with the conversation. There had been assumptions and rumors as well. Despite the initial unrest among the people, it cannot be denied that a unified tax system would beneficial for the economy of the country. It will assist streamlining different types of taxes.
The decision which the government has taken is no doubt a progressive one. This would surely bring transformation in the dynamics of the business world of the nation. The transit inventory would be reduced. The unified tax would also improve the prospect of FDI. Such a tax system has been required for the operational efficiency enhancement as well.
The retail sector is one of the largest employers in the nation. Thus one of the most discussed topics of the country has been whether the implementation of the unified tax system would prove to be beneficial for this sector. Since retail sector falls under the GST system, it is small wonder that the tax system would bring some changes in this industry as it has already brought a lot of transformation in other sectors.
It seems that fashion world would see a way forward due to the tax system. The brands are likely to introduce more products in frequent intervals. This would be possible because GST has done an enormous benefit to the retail sector. It has simplified the taxation. Earlier there have been multiple taxes which confused the people. Now, with the reduced tax layers, the operational cost would reduce, and this will help the brands to focus on producing more in the future.
For the clothing brands, the GST rate would be 5% on any product below ₹ 999. For the brands costing over ₹ 999, the GST rate would be 12%. All the luxury brands are continuing with the discount to liquidate the old inventories. All the air conditioned restaurants are now charging 18% GST regardless of alcohol license. This is also good news for the people who love to eat as the previous tax rate has been 20%.
Faster procurement along with seamless integration would lead to huge befits for the retail sector. With the way, it is going forward, in the future, more discounts on brands would be available.