Nifty slides with second biggest loss of the year as geo political tensions turns sentiments bearish for traders across globe. A week that started with a smaller consolidations and a tight range of trading finally paved the way for bears as it breached below 10K mark. A bearish engulfing pattern clearly indicates the strength as it engulfed the previous week gains as well and mandates the short term trend to be weaker.
GST is the abbreviation of Goods and Service Tax which will be applicable from 1st of July,2017 all over in India.It will replace all other taxes levied by central and state government.
Taxes which will bound together under GST are:-
With the GST, one state has to deal with the central government only to settle their tax amount and not with every other state. Under GST, taxes is divided in few slabs at following rates.
Slabs of the tax rate in GST:-
0%: – Open Grains and pulses, fresh vegetables, Open dairy products, egg, notebooks
5%: -Sugar, tea, coffee, cooking oil, skimmed milk powder, cashew & raisin, LPG
12%: – Ghee, butter, almonds, preservative fruit juice, pickles, mobile phones, medicines
18%: – Hair oil, toothpaste, soap, ice cream, computers, pasta, printer, corn flakes, cinema
28%: -Aerated drinks, Large appliances(AC, Fridge), Automobiles, entry into IPL matches and race courses
Things which get cheaper after implementation of GST
- Travelling in general/sleeper coach
- Air travel(economy class only)
- Luxury car & bikes(exempt with 2%)
- Cab services
- Eating in restaurants (turnover under 75laks)
- Apparels, few confectionaries & food items (Dairy products, biscuits, tea, coffee, sugar, soap, meat, honey, fresh vegetables, cashew, ketchup, salt & Ice cream)
- Hair oil
- Light fittings
- cotton, pillow, leather bag, paper napkin
- buying home & large appliances(fridge, washing machine, printer)
- Movie tickets
Things which get costlier after GST
- Living in 5 star hotel
- buying small cars
- AC coaches
- Insurance premium
- Bank transaction
- Mobile and credit card bills & payment(Raised with 3%)
- Tour packages
- branded clothes
- Cosmetics, shampoo, perfumes
Adhar Card will be the King:
Adhar Card linking is must w.e.f 01 July 2017.No PAN card without Aadhaar;
No PAN card without Aadhaar; No passport without Aadhaar Card.Linking of Aadhaar with PAN becomes mandatory.Linking PF account with Aadhaar.
Linking of Aadhaar with PAN becomes mandatory; Linking PF account with Aadhaar.
Benefits from GST:
Tax revenue for govt. will be increased while the burden of taxes will be reduced for the industry.
Things will go digital resulting reduction in paper work.
Prices will get low for many manufactured products.
GST is simple and clear. It will remove the barrier or stress of all heavy other taxes with the single tax i.e. With GST one nation one tax. Although if we talk about market, they are not yet prepared for GST disruption.Investrs need to be beware as govt will track all your records while implementing.GST bill has a potential to change the variations in stock market frequently as it is one of the biggest tax reforms to be rolled out.You should and is advisable to take share market tips or stock tips while investing in market.
Any changes in government policy create an effect on the Indian economy as well. It affects global market and business sector also.Our government initiated a bill called GST, taxes such as VAT, excise duty, octroi tax, service tax and other indirect tax will be replaced by a single tax which is GST.
Let’s take a short overview what is GST –
GST- full form is Goods and Service Tax which is scheduled to launch in July 2017.It is an indirect tax levied by central and state government. GST will be levied on every transaction such as sale, purchase, transfer, and import of any goods and services.It will replace all other indirect tax such as VAT, service tax, and excise duty etc.It is a value added tax, It will be levied on the taxable amount of transaction.
To know more about how it will effect on the stock market, traders can get suggestions from stock tips experts, they have better knowledge about market conditions and they can provide the best guidance to people interested in share market.
What is the benefit of GST
1.GST will improve the way of doing business in India because various entry barriers will eliminate after GST bill.This new system will also improve the revenue of central and state government of India.
2.It will remove corruption from the country as everyone has to pay a specific taxable amount while doing a transaction of any goods and service.
3.It will remove paper burden because all system will go to convert digital.It will also improve work efficiency and performance of people.
4.It will bring uniformity as tax rate will be same in everywhere.It will provide a single identity to Indian country.
5.It will simplify the process of levying tax because the previous tax will be replaced by GST.
1.It will increase prices because of higher interest rates.Expected interest rate is 5%, 12%, 18% and 28%.
2.The Higher tax burden on small manufacture unit, under GST manufacturer having turnover more than 20 Lakh will have to pay tax.
3.Change in tax calculation structure – Initially, we will have to face the struggle in calculating GST as all process will change after implementation.
4.It will increase operating cost for business as new Gst system requires professional assistance.It will affect to small traders.
Effect on the Stock market?
Implementations of GST is expected to reduce the cost of logistics as govt will not take octroi tax separately it will reduce the cost of transportation as well. GST will improve the way of trading in stock market, it will simplify tax structure and make the supply chain more efficient and convenient.GST will boost earning of companies logistic, manufacturing and transportation sectors.It will boost transportation process as GST eliminate various checkpoints.It is best of companies facing multiple levies on transactions.
If GST bill passed in India successfully, it will be beneficial for the stock market as it will send a positive message to the foreign investor. Our country will represent as a better policy maker in front of the foreign market, and then it will lead foreign investor to make an investment in the Indian stock market.It will boost our economy as well as the reputation of the Indian country.