Discounts of commodity and services tax rate: The industry sees the demand for demand and consumption enhancement

Companies are looking for the price -proposed discounts under the goods and services tax (GST), which is expected to give a boost to both estimated spending as well as from non -fatal spending. In addition to the low rates of 100-basis in prices by the Indian Reserve Bank, dual consumer companies and cars also expect sales to raise.

But despite the consumption batch that is seen as revenue as well, there are still concerns about potential revenue losses and in particular the influence of state financing.

The countries have taken a cautious position on the proposal that was presented by the center and awaiting details and hidden. The group of ministers is scheduled to meet about the rationalization of prices in Delhi on August 20 and 21 to discuss proposals and is likely to end its reports. GOMS is also expected to meet in the Commodity and Services Tax Council, including GOM on Cess Cess and GOM for health and life insurance, on August 20.

It is expected to make a final decision regarding the rationalization of the proposed prices as well as other reforms under the commodity and services tax by the Commodity and Services Tax Council when it meets in late September.

“The reduction in the commodity tax rates and services proposed by the center will definitely enhance consumer morale. FMCG sales and estimated materials will witness an immediate impact because when the discounts are approved by the Commodity and Services Tax Council and their implementation. An expert in the industry said.”

According to the proposal put forward by the center, the consumption of mass and daily use such as ghee to a plate is transferred by 5 % of the current 12 % plate. Meanwhile, consumer negatives, small cars and wheels on which taxes are currently imposed at higher rates than 28 % can be transferred to the commodity and services tax panel by 18 %.

A report issued by Kotak Corporate shares indicated that this can be translated into an estimated economic batch of about 1.3 rupees of Cham Ruphra to sectors of selection and the quantity may be higher if the full tile is 12 % in 5 %. “The consumption of mass and ambitious commodities is likely to move to lower rates, which leads to a decrease in specific car rates, cement, consumer goods system, and reception,” adding that the cement sector may witness limited benefit given the low prices.

HSBC Global Investment Research said that immediate tax cuts can stimulate the demand via products – food, beverages, consumer paintings, cars, hotels, cement and building materials. Moreover, over time, efficiency gains in moving to a more simple and more predictive tax system at lower rates can raise the growth of the potential gross domestic product in India over time.

But the main questions about the loss of revenue from this step and the actual transportation to reduce prices to consumers by companies still should be seen.

The report issued by HSBC Global Investment Rese said.

“We appreciate that with the transfer of some products to low tax buckets (from 12 % to 5 % basket, from 28 % to Ben by 18 %, although the minority may be paid from 12 % to 18 % or from 28 % to 40 % as well) central governments and state governments.

The report said that the center has other revenue sources to rely on, but the states do not have many options, adding that countries may not agree to achieve revenues.

Nomura also indicated in a report that the decrease in taxes with low inflation and favorable monetary policy provides the back wind to recover in the demand for consumption in the second half of the fiscal year.

It expects that this step can reduce taxes for the locked treasury by more than 1.5 trillion rupee, or 0.45 % of GDP. “The decrease in oil prices leads to a high collection of fees, the high profits of RBI and the high demand for consumption, factors are somewhat reduced, in our opinion.”