Decoding GST For The Imaging Industry

In many ways 1st July 2017 will etch its way in India’s history as a monumental change and reform in India’s taxation regime. Many call it ‘THE’ biggest move after India’s independence while others haven’t welcomed it with open arms. Whatever you may call it, an opportunity or a challenge, it is clear that the introduction of the Goods and Services Tax (GST) by the Government is one of the biggest moves in India’s existence. In this article Bhavya Desai decodes GST, its opportunities, impact and the implications on the imaging industry.

- Bhavya Desai

So if you have been listening to this word GST, which seems to be dominating the business circles in every conversation and have been wondering, how is this going to affect you? Then this article will give you a quick 101 on the same.

What is GST?

GST stands for Goods and Services Tax (GST) which is a comprehensive indirect tax levied on manufactures, sales and consumption of goods as well as services at a national level. Ideally it replaces all indirect taxes levied on goods and services by the Indian Central and State Governments.

Basically it is a unified tax structure across India which eliminates differential duty structure and taxation system across different states in India.

How does this matter and affect the consumer?

So if you are wondering, how does this matter to me? Then you need to think again because the introduction of GST will have massive positive impact on the pricing structure of products, introducing a unified pricing policy to product categories across India.

For example, a camera purchased in Maharashtra earlier would be priced lesser or more (depending on the state) elsewhere. So if a camera before VAT was costing ₹100 (excluding tax) in Maharashtra, then it’s eventual MRP would be ₹113.50 to a consumer. The same camera in Tamil Nadu would cost the consumer ₹114.50 since it levied a VAT of 14.5%.

Another simple example is of the automotive industry. Have you ever wondered that a car of same make and year bought by your friend/family in a different state was far cheaper than what you paid for? In simple words this was due to the introduction of number of layered taxes levied by the Govt on the showroom price of the car. Hence a luxury car in Delhi would cost at least 7-8% cheaper than in Mumbai since there were number of additional taxes that were levied on products entering Mumbai in the past.