Question

Discuss the impact of GST in indai on the goods and services offered by any cement company.

Answer 1

GST is an destination based tax levied on supply of goods or services in india. It subsumes various levies such as excise,Vat, CST etc which were levied in previous tax regime.Sale or purchase of Cement is supply under GST and attracts the tax rate of 28%.

Cements fall under high tax rate bracket under GST and will impact the industry as prices of cements will increase due to increase in incidence of tax and burden of tax on ultimate consumer will increase.Though GST is a value added tax ie. it will tax only the value addition at each stage as credit of tax paid at earlier stage will be available as credit for payment of tax at succeding stage, hence taxing only the value created. But still credit of some are not available such as: A) Tax levived by the state government for extraction of Lime stone. B) Cess paid as clean energy cess, Both the tax paid to state government and cess under clean energy cess are not allowed as credit.

This adds to the cost of production and GST is charged on such amount as well leads to cascading effect ie tax on tax and increases the cost of production.

Increase in cost of cements will ultimately effect the infrastructure projects and housing projects in india. As increase in prices of cements will increase the cost of these infrastructure process and housing projects and imapacts the growth in nagative way.

But because of motive oF GST of one nation one tax various levies are eliminated and credit of tax is available at each stage regulasied the cement industry, as GST will help in growth of whole india GST will impact the cement industy in positive way as growth leads to groeth of infra and GDP on india, which will increase the standard of living and the spending power for the people of india.Has growth and demand will have a positive impact on Cement sector.