Malli Srikanth 2

A STUDY ON IMPACT OF GOODS AND SERVICE TAX ON RETAIL SECTOR
CHAPTER – 1
INTRODUCTION
Introduction:
The term „Tax‟ is derived from Latin word „Taxare‟ that means to
estimate. In India, a direct tax practice was prevailed across various industries.
From July 1st, 2017, GST came into being which is a comprehensive tax regime
levied on manufacturing, sales and consumption of products and services.
Introduction of GST has merged both centre and state tax into a unified tax system
across nation. This new tax regime which has cascading effects on the economy
which seems to be testing time for India for ease of business in the supply chain
systems. GST has become buzzword across the nation, which has created a sense
of transformation of businesses yet to get clarity in various sectors. In retail
industry, business has undergone dramatic changes both in organized and
unorganized retailing in Tier-I cities and Tier-II cities of India. As it is highly
fragmented in nature, the country is going to experiment with Goods and Services
Tax with new tax regime which has cascading effects on the economy. In this
context, Retailers are facing challenges in terms of handling merchandise across
categories which in turn has effect on their bottom line of business. According to
various sources of market research agencies, the definition holds as follows GST
is defined as a new tax regime that is currently levied on products and services
across India. Further, it is a uniform indirect tax which has replaced many of taxes
such as Excise duty, service tax, additional duties of excise and custom duty taxes
and surcharges on products and services.
Tax is not a temporary contribution; it is a mandatory financial burden that

is imposed by the government on the income and business profit of the people.
Every country impose tax on goods and services to generate revenue to meet their
expenditure. Undoubtedly, the Indian government also imposes taxes to meet up
its public expenditure that contribute to the welfare of the society. The power to
levy the tax goes together with central and state which is derived from the
constitution of India. The system of taxation can be traced in India from ancient
times and year after it has undergone certain changes and new reforms to make it
more standardized. Among them one of the milestone reforms that have taken
Government first Grade College Page

place in the Indian tax system is the introduction of VAT and its transformation
into GST. In order to reduce the existing complexity in tax, a new tax reform was
made in 1st July 2017 to ensure uniformity in tax rates which is known as goods
and service tax .GST is a modified form of VAT where tax is levied on value
added at each stages of supply chain .It is a proposed system of tax that subsumes
all the existing indirect taxes .Under GST there would be only one law as GST
and would be one CGST rates and one SGST rates across states that ensures fiscal
autonomy, harmonization and transparency at each level(GST reforms and
intergovernmental consideration in India 2009). The government implemented
new tax system with a view to eliminate complexity, reduce tax burden, and
ensure compliance of tax payment. GST have a great impact on the various sectors
especially retailers, wholesalers, logistics and FMCG. Its implementation has
made serious difficulties among the business activities of traders especially of
retail traders. Of all the sectors GST will have far reaching impact on traders and
would result in reducing the prices of the goods supplied by such traders. About
1/10th of India's economic development is contributed by the retail sectors. They
play a major role in the economy as they act as an intermediary between business
and customers. Introduction of GST regime has benefited the growth of retail
sector. Under GST regime traders can claim input tax credit for tax paid on inter-
states purchase of goods, against tax liability incurred on sale of goods which were
not allowed under VAT system (goods sold in his own state). Although the retail
industry is benefitted with the introduction of GST, it would depend upon the rate
of tax applicable to each category of goods. Lack of clarity on tax rates, its
provisions, valuation of stock and fixation of price are the major challenges
retailers face.
1.1 Background of Goods and Services Tax (GST) In India

The implementation of the Goods and Services Tax (GST) in India was a
historical move, as it marked a significant indirect tax reform in the country. The
amalgamation of a large number of taxes (levied at a central and state level) into a
single tax is expected to have big advantages. One of the most important benefit of
the move is the mitigation of double taxation or the elimination of the cascading
effect of taxation. The initiative is now paving the way for a common national
market. Indian goods are also expected to be more competitive in international and
domestic markets post GST implementation. From the viewpoint of the consumer,

there would be a marked reduction in the overall tax burden that is currently in the
range of 25% to 30%. The GST, due to its self-policing and transparent nature, is
also easier to administer on an overall scale.
When did GST start?
Several countries have already established the Goods and Services Tax. In
Australia, the system was introduced in 2000 to replace the Federal Wholesale
Tax.
GST was implemented in New Zealand in 1986. A hidden Manufacturer „s Sales
Tax was replaced by GST in Canada, in the year 1991. In Singapore, GST was
implemented in 1994. GST is a value-added tax in Malaysia that came into effect
in 2015. Let us discuss the events occurred in implementation of GST
chronologically 2000: In India, the idea of adopting GST was first suggested by
the Atal Bihari Vajpayee Government in 2000. The state finance ministers formed
an Empowered Committee (EC) to create a structure for GST, based on their
experience in designing State VAT. Representatives from the Centre and states
were requested to examine various aspects of the GST proposal and create reports
on the thresholds, exemptions, taxation of inter-state supplies, and taxation of
services. The committee was headed by Asim Dasgupta, the finance minister of
West Bengal. Dasgupta chaired the committee till 2011.
2004: A task force that was headed by Vijay L. Kelkar the advisor to the finance
ministry, indicated that the existing tax structure had many issues that would be
mitigated by the GST system.
February 2005: The finance minister, P. Chidambaram, said that the medium-
tolong term goal of the government was to implement a uniform GST structure
across the country, covering the whole production distribution chain. This was
discussed in the budget session for the financial year 2005-06.
February 2006: The finance minister set 1 April 2010 as the GST introduction
date.
November 2006: Parthasarthy Shome, the advisor to P. Chidambaram, mentioned

that states will have to prepare and make reforms for the upcoming GST regime.

February 2007: The 1 April 2010 deadline for GST implementation was retained
in the union budget for 2007-08.
February 2008: At the union budget session for 2008-09, the finance minister
confirmed that considerable progress was being made in the preparation of the
roadmap for GST. The targeted timeline for the implementation was confirmed to
be 1 April 2010.
July 2009: Pranab Mukherjee, the new finance minister of India, announced the
basic skeleton of the GST system. The 1 April 2010 deadline was being followed
then as well.
November 2009: The EC that was headed by Asim Dasgupta put forth the First
Discussion Paper (FDP) , describing the proposed GST regime. The paper was
expected to start a debate that would generate further inputs from stakeholders.
February 2010: The government introduced the mission-mode project that laid the
foundation for GST. This project, with a budgetary outlay of Rs.1,133 crore,
computerised commercial taxes in states. Following this, the implementation of
GST was pushed by one year.
March 2011: The government led by the Congress party puts forth the
Constitution (115th Amendment) Bill for the introduction of GST. Following
protest by the opposition party, the Bill was sent to a standing committee for a
detailed examination.
June 2012: The standing committee starts discussion on the Bill. Opposition
parties raise concerns over the 279B clause that offers additional powers to the
Centre over the GST dispute authority.
November 2012: P. Chidambaram and the finance ministers of states hold

meetings and set the deadline for resolution of issues as 31 December 2012.
February 2013: The finance minister, during the budget session, announces that
the government will provide Rs.9,000 crore as compensation to states. He also
appeals to the state finance ministers to work in association with the government
for the implementation of the indirect tax reform.

August 2013: The report created by the standing committee is submitted to the
parliament. The panel approves the regulation with few amendments to the
provisions for the tax structure and the mechanism of resolution.
October 2013: The state of Gujarat opposes the Bill, as it would have to bear a loss
of Rs.14,000 crore per annum, owing to the destination-based taxation rule.
May 2014: The Constitution Amendment Bill lapses. This is the same year that
Narendra Modi was voted into power at the Centre.
December 2014: India„s new finance minister, Arun Jaitley, submits the
Constitution (122nd Amendment) Bill, 2014 in the parliament. The opposition
demanded that the Bill be sent for discussion to the standing committee.
February 2015: Jaitley, in his budget speech, indicated that the government is
looking to implement the GST system by 1 April 2016.
May 2015: The Lok Sabha passes the Constitution Amendment Bill. Jaitley also
announced that petroleum would be kept out of the ambit of GST for the time
being.
August 2015: The Bill is not passed in the Rajya Sabha. Jaitley mentions that the
disruption had no specific cause.
March 2016: Jaitley says that he is in agreement with the Congress„s demand for
the GST rate not to be set above 18%. But he is not inclined to fix the rate at 18%.
In the future if the Government, in an unforeseen emergency, is required to raise
the tax rate, it would have to take the permission of the parliament. So, a fixed rate
of tax is ruled out.
June 2016: The Ministry of Finance releases the draft model law on GST to the
public, expecting suggestions and views.
August 2016: The Congress-led opposition finally agrees to the Government„s

proposal on the four broad amendments to the Bill. The Bill was passed in the
Rajya Sabha.
September 2016: The Honorable President of India gives his consent for the
Constitution Amendment Bill to become an Act.

2017: Four Bills related to GST become Act, following approval in the parliament
and the President„s assent: • Central GST Bill
• Integrated GST Bill
• Union Territory GST Bill
• GST (Compensation to States) Bill
The GST Council also finalised on the GST rates and GST rules. The
Government declares that the GST Bill will be applicable from 1 July 2017,
following a short delay that is attributed to legal issues.
1.2Meaning and definition:

G- GOODS
S-
SERVICES
T-TAX
GST Meaning – GST is Goods and Service Tax is an indirect tax which the
Government of India is planning to levy on all goods and services apart from
those exempted by the GST law. The sole purpose of GST is to put an end to
multiple taxes like excise, CST, VAT, service tax which are levied on different
products, starting from the source of manufacturing, till reaching the end
consumer.
1.3 GST Definitions
Section 2. Definitions In this Act, unless the context otherwise requires,-

(1) ―actionable claim‖ shall have the meaning assigned to it in section 3 of
the Transfer of Property Act, 1882 (4 of 1882);
(2) ―address of delivery‖ means the address of the recipient of goods and/or services
indicated on the tax invoice issued by a taxable person for delivery of such goods
and/or services;
(3) ―address on record‖ means the address of the recipient as available in the records
of the supplier;
(4) ―adjudicating authority‖ means any authority competent to pass any order
or decision under this Act, but does not include the Board, the Revisional
Authority, Authority for Advance Ruling, Appellate Authority for Advance
Ruling, the First Appellate Authority and the Appellate Tribunal;

(5) ―agent‖ means a person, including a factor, broker, commission agent,

arhatia, del creditor agent, an auctioneer or any other mercantile agent, by
whatever name called, who carries on the business of supply or receipt of goods or
services on behalf of another, whether disclosed or not;
(6) ―aggregate turnover‖ means the aggregate value of all taxable supplies, exempt
supplies, exports of goods and/or services and inter-State supplies of a person
having the same PAN, to be computed on all India basis and excludes taxes, if
any, charged under the CGST Act, SGST Act and the IGST Act, as the case may
be;
This part of the section therefore explains that aggregate turnover does not include
the value of inward supplies on which tax is payable by a person on reverse charge
basis under sub-section (3) of Section 8 and the value of inward supplies.
1.4 Features of GST

GST belongs to the VAT family as tax revenues are collected on the basis
of value added. Unlike in the case of a pure commodity-based VAT system, GST
includes services tax also. Similarly, input credit is given while calculating the tax
burden. Following are the main features of the GST as per the final agreement.
1. Taxes covered:
Most of the important indirect taxes of the centre and states are integrated under
the GST. The most important tax of the central government (in terms of tax
revenue collection) -the Central Value Added Tax (or Union Excise Duty),
Additional Customs Duty (CVD), Special Additional Duty of Customs (SAD),
Central Sales Tax (levied by the Centre and collected by the States, the fastest
growing tax revenue of the centre – Service Tax, the most important tax revenue
of the states – the state VAT (Sales tax) are now merged into a single tax under
the Goods and Service Tax. There are three important indirect taxes for the centre
the union excise duties, service tax and customs duties. Of these, the central
excise duties and service taxes are brought under the GST.

2. Unified tax regime:

The GST integrates Goods and Service Taxes into one unified tax regime.
Previously, the goods and services were imposed and administered
differently.
3. The four-tier rate structure:

The GST proposes a four-tier rate structure. The tax slabs are fixed at 5%, 12%,
18% and 28% besides the 0% tax on essentials. Gold is taxed at 3%. The centre
has strictly demanded and got an additional cess on demerit luxury goods that
comes under the high 28% tax. Essential commodities like food items are
exempted from taxes under GST. Other consumer goods which are common items
will be taxed at 5%. 4. The new GST seems to have two standard rates – 12% and
18%. GST rate structure for the goods and services are fixed by considering
different factors including luxury/necessity nature.
4. Service tax rate under GST:

Under the GST, there is a differential tax structure. A low tax rate of 5% is
imposed on essential services. Common services are charged at 12% and some
commercial services at 18%. A tax rate of 28% on luxury services is also made.
Several services like education provided by an educational institution, Post
Offices, RBI etc. are exempted from service taxation. The standard GST rate on
services seems to be 18%. Services are taxed at a common rate of 15% previously.
5. Turnover limit:
Under GST and tax right over low turnover entities: GST is applied when turnover
of the business exceeds Rs 20lakhs per year (Limit is Rs 10lakhs for the North
eastern States). Traders who would like to get input tax credit should make a
voluntary registration even if their sales are below Rs 20 lakh per year. Traders
supplying goods to other states have to register under GST, even if their sales is
less than Rs 20 lakh. There is a composition scheme for selected group of tax
payers whose turnover is up to Rs 75 lakhs a year.

6. Tax revenue appropriation between the centre and states:

The centre and states will share GST tax revenues at 50:50 ratio (except the
IGST). This means that if a service is taxed at 18%, 9% will go to the centre and
9% will go to the concerned state.
7. Components of GST:
CGST, SGST and IGST When the centre and states are merging their prominent
indirect taxes under GST, both should get their own share in the GST. For this, the
GST Council has adopted a dual GST with two components – the Central GST
(CGST) and the State GST (SGST).
8. Composition scheme under GST
The composition levy is an alternative method of levy of tax designed for small
taxpayers with turnover is up to Rs. 75 lakhs. The scheme can be availed by
manufacturers and restaurants. Other service providers can„t opt for the scheme. It
enables taxpayers to make payments at a flat rate under GST, without input
credits. An alternate upper limit of Rs. 50 lakhs is applicable in a few states –
Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura,
Sikkim and Himachal Pradesh. The objective of the optional Composition Scheme
is to bring simplicity and to reduce the compliance cost for the small taxpayers.
9. Right to tax on territorial waters:

Right to impose tax on economic activities that are done on territorial waters:
Here, the both centre and states have decided that states can impose and collect
tax on those falls within 12 nautical miles
1.6 Need for Study:

 To study about Goods and Service Tax and its impact on the economy.
 To examine benifits and opportunities of Goods and Service Tax.
 To Understand the concept behind GST.
 To learn the highlights of GST.
 To measure the pros and challenges of GST.
 To present further information of research work on GST.

1,7 Objectives of the Study:

• To analyse the concept of GST
• To know various benefits of implementation of GST in India
• To study the impact of GST on retail shops
• To analyze pre and post GST Tax structure
• To understand the impact of GST on retail sector
1.8 Scope of Study:
This project concept suggests the introduction of GST in India and identifies
the impact it has on the retailers, if a comprehensive GST is implemented in India.
And what are the factors affect the retailers regarding GST particularly in
Davangere city.
1.9 Meaning and Definition:

To better understand the role of retail format in an economy and its
significance, let us first try to understand what actually retail is? And how it is
different from wholesale business? Retailing consists of selling merchandise from
a permanent location (a retail store) in small quantities directly to the consumers.
These consumers may be individual buyers or corporate. In the world of Trade and
Commerce, a retailer purchases goods or merchandise in bulk from manufacturers
directly and then sells in small quantities are known as Retail stores or shops.
Shops may be located in residential areas, colony streets, community Canter „s or

in modern shopping arcades/ malls. In fact, any organization selling merchandise
to final consumers -whether a producer, wholesaler or a retailer -is doing retail
business.
It does not take into account how the merchandise is being sold. While on the
other hand, retail format is a blend of product range, pricing, marketing and the
way the items are displayed. A retail-format will be suitable for a retailer does not
depend upon market practice but upon retailer „s budget, merchandise and the
need of the locality. A good format draws more footfalls and helps retailer a
platform to succeed and earn name and fame.

Definition
David Gilbert defines Retailing in india following words ,”Any business
that directs its marketing efforts towards satisfying the final consumers , based
upon the organization of selling goods services as a means of distribution.”
1.10 Functions of Retailing
Retail trade performs many valuable functions for the trade and commerce as a
whole. Some of them are as follows:
1) Delivery of the goods to the end consumer

This makes shopping for all requirements quite hassle-free for the consumers. This
also facilitates consumption and maximizes consumer satisfaction. Because the
company cannot take responsibility of delivery to every single customer, it
appoints retailers. One of the functions of retailing is immediate delivery.
2) Is an essential part of the distribution chain

Because the retailer takes over the cumbersome task of distribution of goods
manufactured to the target market, the manufacturer is relieved of this
responsibility and can divert his resources to manufacturing activities.
3) Finances the wholesaler
While booking his order of goods with the wholesaler, the retailer pays some
percentage or the whole of the order price in advance. This helps the wholesaler to
carry on with his operations seamlessly. In some industries, it is the retailer who
pays cash to maintain stock and in others the wholesaler has to carry the stock as
paid capital. Nonetheless, financing is one of the major functions of retailing. A
retailer who does not contribute to financing will bring down the effectiveness of
the supply chain.
4) Stores the goods according to market requirement
The retailer invests his working capital in building a gamut of inventory reflecting
market requirements. He also sells the requisite quantity, however small or big, to
the final consumers satisfying their needs. The retailers know the complete
demand and supply potential due to their years of experience. Hence it is one of
the functions of retailing to balance the demand and supply as per external market
conditions.

5) Lends a hand in manufacturer’s marketing initiative
Retailer plans and executes many advertising and promotion activities at the point
of purchase i.e. right in his store. This leads to gain in popularity of and
favourable market conditions for the product of the manufacturer.
6) Assumes storage and credit risks
When the retailer orders and stores a large quantity of goods from the
manufacturer, he makes sufficient provisions to store it safely for some days. This
involves costs. Also, there is also a risk of loss of these goods on account of
destruction, theft, spoilage etc. The retailer assumes these risks while storing
goods.
7) Extends credit facilities to the consumers and assumes credit risk
The retailer does so to encourage shopping. This adds to the vigour of commercial
activities in the economy. But there is also a risk that the customers won„t pay for
the goods bought or may return damaged goods to the retailer. This inherent risk
in trade is assumed by the retailer.
8) Offers wide variety of customers and enticing price range in a product line
In order to attract more customers, a retailer offers a wide range of merchandise at
attractive prices. This results in higher consumer satisfaction and higher standards
of living in any economy.
9) Provides convenience in shopping
Retailers try to set up their shops nearby housing areas or near parks, schools – the
areas where the customer finds it very convenient to shop. This enhances the
consumer welfare.
1.11 Methodology
The methodology is the plan. Structure and strategy of the research work
that sets out to obtain answer to study. Methodology can be considered as a
primary element in any type of study. It means the methods used to gather the
information related to study. The success of research is purely based on data
collection. The following methods are used to gather the data are as follows.

• Primary data
The first-hand data has been collected through a structure questionnaire.
The selection of respondents is based on simple random sampling. The survey was
conducted through questionnaire for 30 respondents which consist of equal
number of retailers in Davangere city.
• Secondary Data
There are the source containing Data which has been collected and
complicated for another purpose. The secondary source consisting of the readily
available resources and already complied statistical statement and report whose
data may be used by researchers for their study. The major sources of secondary
data are Standard reference books
• Journals
• Research Paper
• Web sites.
Limitations of the Study:

• The study focusses on goods and services tax in India but survey covered
only Davangere City.
• The study is based on the responses of the respondents.
• The study concentrated only on the implication of GST as based on
perception of the respondents but ignored aspects

Chapter Scheme:
Chapter: 1: Introduction
This chapter contains introduction, Review of Literature, need for the study,
scope of the study, objectives of the study, limitations of the study, methodology
used for data collection and also chapter scheme.
Chapter: 2: An Overview of GST in India
This chapter contains background of Goods and Services Tax in India, meaning
and definitions of GST, features of GST, scope of GST, objectives of GST, GST
advantages and disadvantages, need for GST in India.
Chapter: 3: Overview of Retailing Sector in India
This chapter contains introduction, meaning and definition, functions of retailers,
classifications of retailers, GST impact on retail sector and retailers in India.
Chapter: 4: Data Analysis and Interpretation
This chapter contains data analysis and interpretation.
Chapter: 5: Summary of Findings, Conclusion and Suggestions
This chapter contains Summary of findings of the study, conclusion to the study
and suggestions.

Chapter-2
Conceptual framework of the topic
Introduction
The word 'Retail' has been derived from the French word 'retailer' which
means 'to cut a piece off' or 'to break bulk'. Retailing can be defined as
procurement of varied products in large quantities from various
sources/manufacturers and their sale in small lots, for direct consumption to the
purchaser. Retailing is one of the biggest sectors in India and has witnessed multi
fold growth post liberalization of the Indian Economy. The evolution of retail
trade in India can be traced to the times when majority of trade was routed through
formats such as Haats, Mandis and Melas. Mostly organized on a periodical basis
and limited to a particular locality/village, such formats gained prominence.
Almost everything from vegetables, household necessities to cattle „s were bought
and sold, either through monetary means or the barter system. The Indian retail
industry has emerged as one of the most dynamic and fast-growing industries due
to the entry of several new players in the recent times along with rising income
levels, growing aspirations, favorable demographics and easy credit availability. It
constitutes over 10% of the country’s Gross Domestic Product (GDP) and around
8% of the employment and is valued at USD 672 billion. Globally, India is fifth-
largest global destination in the retail space and is growing at a rate of 12% per
annum. Over the last two decades, the size, scope and complexity of retailing has
undergone considerable change.
Organized Retail is characterized by high investment requirements, large

premises, trained staff where retailers are licensed and are registered to pay taxes
to the government. Unorganized Retail refers to the traditional form of retail often
situated near residential areas. It is generally characterized by low rentals, low tax
pay-outs with a majority of it being owner managed and employing personal
capital. It includes formidable mix of conventional Kirana shops, general stores,
mom-&pop stores, paan-beedi shops and other small retail outlets. Currently,
organized retail market is valued at about USD 60 billion, only about 9% of the
sector, where as unorganized retail market holds the rest. India's organized retail
penetration is much lower compared with other countries, such as the United
States which has organized retail sector penetration of 85%.

2.1 Classification of retailers
Retailers can be classified according to their selling processes as store-based

Retailers or non-store retailers.
l. Store Based Retailers:

Store based retailers operate at fixed point of sales locations. Their stores are
Located and designed to attract a high volume of walk in customers. In general,
store based retailers offer wide variety of merchandise and Use mass-media
advertising to attract customers. They typically sell merchandise for personal or
household consumption. But sometime they also serve business and institutional
Clients. Store based retailers can be further classified on the basis of various
parameters like:
I .By Ownership:
Depending on the ownership pattern stores can be divided into six categories
Independent Stores, Chain Stores Franchise Stores Leased Department Stores,
Vertical Marketing System and Consumer Cooperatives.
1. Independent store: An independent store can be defined as a store, which

is owned by a single retailer. This retailer does not own any other store. The entry
barriers for setting up an independent store are low: licensing procedures are
simple and the initial investment is low. As a result, there are many new entrants.
This leads to an increase in competition in the retail market. In such an
environment, to retain customers, independent retailers should become customer
focused or customer oriented.
2. Chain store: Chain stores have two or more retail outlets that are
commonly owned and controlled. These stores have a centralized buying and
merchandising system and sell similar lines of merchandise. Best Buy and Circuit
City in the US and Music world in India are examples of chain stores.
3. Franchise store: A franchise store can be defined as a store based on a

contractual arrangement between a Franchiser(manufacturer)and a franchisee,
which allows the franchisee to conduct a given form of business under an established
name and according to a given pattern of business. In other words, through franchising,
small business firm scan become a pan of a multi-unit chain type retail institution.
McDonald „s has become a successful franchise in India. Franchising can be of two
types: Product / trademark franchising and business

4. Leased department: A department in a retail store that is rented to an

outside party is called a leased department. Another words, floor space within a
store is leased and run as a separate business A department store can allot floor
space for a shoe department, which is actually run by a different company. The
volume of sale of the leased department depends on the existing store's customer
base and store„s reliability. The lessee is accountable for all the activities of the
leased department. These activities include furnishing the department, planning
the merchandise assortment etc. The lessee pays a part of the sales turnover to the
store as rent.
5. Vertical marketing system: A vertical marketing system is a distribution

system in which the producers, wholesalers, and retailers act in a unified manner
to facilitate the smooth flow of goods and services from producer to end-user .One
channel member owns the others or has contracts with them, or has the power to
control them. There are three types of vertical marketing systems.
 Independent vertical marketing system: An independent vertical

marketing system consists of independent businesses like manufacturers,
wholesalers and retailers. This type of marketing system is required when
customers are scattered. Manufacturers and retailers are small, product
sales are high, and when the products require extensive distribution An
independent vertical marketing system is generally used by stationery
stores, gift shops, hardware stores, food stores, drug stores etc.
 Partially integrated vertical marketing system: In a partially integrated

vertical marketing system, only two independent business units in a
distribution channel work together. These units take care of all the
production and distribution functions, without any interference from a
third party. In other words, a manufacturer and a retailer alone manage the
shipping, warehousing and distribution functions without the help of a
wholesaler. Partially integrated vertical marketing systems are generally used
in furniture stores, appliance stores, restaurants, computer retailers etc.
 Fully integrated vertical marketing system: In a fully integrated vertical

marketing system, only one player manages all the activities (production
and distribution), without any help from other channel members. In this
system, several channel members at different levels in the channel are
owned by the...Same company. The company/store using a fully

integrated vertical marketing system exercises full control over channel

operations like production, wholesaling and retailing. Full control over the
channel operations allows the store to lower prices without affecting its
profit margins. The initial cost of setting up a fully integrated marketing
system is very high moreover. the Company owning the entire marketing
system may have difficulty handling some specialized channel activities
6. Consumer cooperative: Consumer cooperatives are retail operations owned

and managed by its customer members in a consumer cooperative a group of
customers invest in the retail operations in return for stock certificates. Which
entitle them to a share in the profit of the retail store the members note on the
stores policies and select a group to manage its operations. Consumer cooperatives
are common in food retailing. In many cases, consumer cooperatives are started
by the residents of an area These residents believe that the existing retailers in that
area are not serving them well (either charging too much or providing poor-quality
goods/services).
II. By Strategic mix:

Depending on the strategic mix retailers adopt, they can be classified into two
groups:
1. Food oriented retailers: Approximately, 40percent of Indian consumer

expenditure goes into food and groceries, which amounts to about Rs
2,00,000crore per year. NABARD (National Bank for Agricultural and Rural
Development) estimates that organized food-oriented retailing would account for
20 per cent of the total organized retailing in India. The turnover is protected at Rs
8.300 Crore (USS 1.8billion) by the year200). Some of the store formats used by
the food oriented retailers around the world are:
1. Convenience store: Convenience stores are relatively small stores that are
located near residential Areas. They are open long hours, seven days a week and
carry a variety of products with limited assortment of merchandise. They
generally carry high turnover convenience products these stores charge relatively
high prices and operate in a 3000 to 8000 square foot area Convenience stores
cater to customers who prefer 'convenience of buying or shopping ‗to the price of
the product. Considering the convenience of customers, these stores stay open for
longer time than other stores. They also work on all the days of the week
Convenience stores may not carry all the items that are available in supermarkets,

but they are very conveniently located for customers. In such stores, the traffic
flow is less than in other stores and the customers can get their products billed
faster than in a super market
2. Conventional super markets: Conventional supermarkets are similar to
department stores, but unlike department stores, these stores focus on food and
household maintenance products. These stores earn very limited revenues from
the sale of non-food or general merchandise goods. The main characteristic of this
store format is the self-service operation. In this type of store, the customer
himself picks up whatever he wants. This self-service arrangement allows the
supermarket to reduce costs and provide a large volume of Goods and services. A
part from reducing the cost to the supermarket, self-service enhances impulse
buying Supermarkets provide a variety of merchandize with deep assortments.
Some conventional supermarket follows everyday low price (EDLP) policy. In
such stores, goods are priced lower than in other stores. Recently conventional
supermarket has started facing competition from food-based supermarkets and
convenience supermarkets that provide a variety of goods and services at better
prices
3. Food based supermarket: A food-based supermarket is larger and more
diversified than a conventional Supermarket, but is usually smaller and less
diversified than a combination store. The size of the store ranges from 25,000 to
30,000 square feet and the store earns 20to 25per cent of its revenue from general
merchandise goods like garden supplies, flowers and small household
Appliances..it provides the full range of grocery items, thus allowing the customer
to do all his grocery shopping under one roof.

4. Combination store: A combination store is a blend of a supermarket and a

general merchandise store, where the general merchandise contributes more than
40 per cent of the sales. It maintains the identity of both a food store and dmg
store, thus allowing customers to do their food and drug shopping in one trip. The
size of a combination store ranges from 30,000 to1000,000square feet. These
stores are designed to allow customers to have a one-stop shopping experience. As
economies of scale are higher in a combination store, the prices are less than those
in a general merchandise store.
5. Box (Limited-line) store: A box store is a food-based discount store that

concentrates on a small selection of goods such a store has limited shopping
hours, limited services, and limited stocks. The retailer offers a limited number of
national brands. Refrigerated perishable goods are not available and prices are
displayed on the shelf or on overhead signs. The products are kept in cut cases,
and customers have to serve themselves. Customers are not allowed to examine
products in this type of store. The products sold in these limited line stores are
private label brands, which are priced 20 to30per cent below market prices.
6. Warehouse stores: Warehouse stores are discount food retailers with an

average size of 100,000 square feet .They cater to customers who look for low
price deals. Merchandise is often displayed in cut boxes or shipping pallets and
services are limited. Customers cannot be sure about the availability of the goods
consistently as the warehouse retailer „s buy these goods only when a
manufacturer or a wholesaler offers a deep price or quantity discount. Depending
on their functioning style.
7. General merchandise retailers: In general merchandise retailing, the strategic

merchandise mix ranges from a shallow assortment to a deep assortment of goods
and services. On the basis of location, merchandise, price, store atmosphere,service
and promotional mix retailers are classified into:
1. Specialty store: A specialty store is a type of general merchandise store

that sells limited lines of closely related products or services to a select group of
customers. Specialty stores offer a particular product line with a deep assortment
to its customers. These stores also assist customers by employing salespeople who
have thorough knowledge of that product line. Specialty states can be timber
classified in to single line specialty stores and limited line specialty stores Single line
specialty stores concentrate on one or a few related product lines, whereas limited line

specialty stores concentrate on more than one product line at a tune. Specialty
merchandise line retailers can specialize on the basis of price, unit size, quality, style,
fashion etc. Viveksin Chennai and Tirumala Music Canter (TMC) in Hyderabad are
specialty stores for electronic goods Colour Plus is a specialty store dealing in men's
casual wear. The major variable in a specialty store's strategy is the merchandise
assortment In such stores a deep assortment is provided to customers i.e. a variety of
brands, models, styles, sizes and colours with in the product line. These specialty stores
provide limited product lines, consisting of quality brands, designer labels and private
labels, along with adequate customer support. Both high margin and low margin
operators can be found in the specialty store category. The size of the specialty store
varies basedon the nature of merchandise and mode of operation. Specialty stores are
locatedin high traffic areas like Shopping Canter „s, downtown mails etc.
2. Variety store: Variety stores offer a deep assortment of inexpensive and

popular goods like stationery, gift items, women „s accessories, house wares etc.
They are also called 5 and 10-cent stores because the merchandise in such stores
used to cost that much. This retailing institution is dying. In fact, Woolworth „s,
which used to be the largest variety store, has been changing the format of its
stores and making them into specialty stores.
3. Department store: Department stores are large retail units that offer wide
variety and a deep assortment of goods and services. These goods and services are
organized into separate departments for the purpose of gaming control over
various store activities like selling, promotion, and customer service these stores
strive to provide a one-stop shopping experience to customers A typical
department store offers clothing, shoes, cosmetics, gills, luggage, and other
household goods. Unlike specialty stores, department stores offer many different
product lines. Shoppers ‗Stop, Westside, Globus, Lifestyle and Pantaloons are
national level 6department stores. Akbarally Benzer, KBN, Naganis, Bombay
Store and A to Z are located in Mumbai. They are. Examples of department stores
managed by regional players
4. Off price retailer: Off-price retailers offer an inconsistent assortment of

branded Fashion oriented soft goods at low prices. These retailers can sell branded
and designer-label merchandise at low prices as they purchase goods from
manufacturers who have excess inventory (because of cancellation of Orders,
irregular merchandise and overruns). Off price retailers have a long-term
relationship with their suppliers As these stores always buy merchandise in bulk at

reduced prices and sell at off prices they have a high stock turnover.
Consequently, they require a regular Supply of goods. In some cases, off-price
retailers get special prices from manufactures by agreeing to order goods in the off
season At times manufacturers also approach off-price retailers to sell their
unsuccessful samples and products This Will give manufactures quick access to
cash and provide a market for goods that are not doing well. Off price chains do
not carry out many promotional activities. Off price retailers can be classified into
a. Outlet stores: They are widely known as factory outlets. These are owned by
manufacturers. A factory outlet can be defined as a manufacturer's Outlet
offering discontinued merchandise, irregular merchandise, cancelled orders and,
sometimes, in season first quality merchandise. Manufacturers use these outlets
to store and sell production over runs, irregular merchandise and returned
merchandise By liquidating inventory at low prices, manufacturers can earn
some money quickly
b. Close outlet stores: They are operated by off price retailers who sell a broad
but in consistent assortment of general merchandise as well as apparels and soft
home goods.
c. Single price retailers sell all merchandise at a single price.
5. Membership club: Membership clubs are set up to cater to price conscious
customers. Customers have to pay an annual fee to become members of the club.
Membership in the club allows them to purchase goods at a low price. Such stores
are very large and are located in isolated areas These stores carry a fraction of the
item stocked by full line discount stores They are characterized by little or no
advertising, plain fixtures, wife aisles. Concrete floors, limited or no delivery
service, little or no credit, and very low prices. They get merchandise directly
from manufacturers. Membership clubs are also known as wholesale clubs,
warehouse clubs and wholesale centres.
6. Flea market: The term "flea market" is a literal translation of the French
Marché aux prices, an outdoor bazaar in Paris, France. A flea market is an outdoor
or indoor facility that rents out space to vendors who offer merchandise, services
and other goods that satisfy the legitimate needs of customers. Flea markets
provide an opportunity for entrepreneurs to start a business with low investment.
A flea market consists of many retail vendors offering a variety of products at
discount prices at places where there is a high concentration of people. On specific
market days they assemble for the exchange of goods and services.

III. Service v/s. goods retail mix: Service organizations like entertainment firms,
hospitals and banks initially had no intention of becoming retail institutions As
competition increased, these organizations started operating like retailers to attract
customers They began providing services at a convenient time and location
Service retailing consists of the sale or rental of an intangible activity, which
usually cannot be stored or transported, but satisfies the need of the user customer.
Service retailing can be of two types „services along with goods, and services
without any goods (pure service). Services along with goods can be of three types:
rental goods service, owned goods service and non-goods service Rental goods
service involves the rental of all types of consumer durable goods Owned goods
service refers to a service provided by a good owned by a person. Non goods
service refers to services provided by retailers to customers who purchase goods at
their store. Providing these services is not the major function of the store. Services
that ar provided without any physical product or good are called pure services.
These include services provided by hospitals, hair stylists, banks, etc.
II. Non store Retailer: Although non store retailers serve the general public like
store based retailers, they differ in their retailing methods. These retailers reach
customers and market merchandise using various methods like broadcasting
―infomercials, "broadcasting and publishing direct-response advertising,
publishing paper and electronic catalogs, going door to door soliciting customers,
conducting income demonstrations, selling from portable stalls (street vendors),
and distributing through vending machines. Non store retailing takes place in two
ways. Traditional non store retailers Traditional non store retailing involves a
variety of retailing methods. These are discussed below:
1. Direct marketing: The Direct Marketing Association (DMA) defines

direct marketing as ―interactive marketing system that uses one or more
advertising media to yield a measurable response and for transaction at any
location" .In direct marketing, a customer is informed about the product through
non personal media like TV, "radio, magazine, newspaper, Internet etc. The
customer places an order through the mailer phone, In direct marketing, responses
can be measured. This system allows retailers to keep track of
consumers„ responses, and maintain a data base of customers and prospective
customers. In other words, through direct marketing, a company can concentrate

its promotional

activities on potential customers. And by targeting potential customers, retailers

can provide efficient and prompt service.
2. Direct selling: As defined by the Direct Selling Association, direct selling

is a method of "marketing and retailing consumer goods directly to the consumer
that relies neither on direct mail, product advertising nor fixed retail outlets"
Direct Selling encourages convenience shopping as well as personal touch or feel
of a product. This type of selling can also be called door-to-door selling because
the salesperson approaches customers directly to sell a product or a service.
3. Vending machines: A vending machine involves coin or card-operated

dispensing of goods and services. It eliminates the use of sales personnel and
facilitates round the clock sales. Machines can be placed wherever they are most
convenient for consumers. Vending machines generally are installed in busy areas
where they can benefit many customers. Though installation costs are high
vending machines help customers avoid the in convenience of shopping in a store.
Retailing through vending machines is also called automatic merchandising.
Customers use cash, prepaid cash cards, coins or credit cards to purchase goods
from vending machines. In India, vending machines are becoming a part of daily
life. Goods sold through vending machine include soft drinks, coffee, photo
copies etc. Banks use an automatic vending machine called the Automatic Teller
Machine (ATM) to make banking more convenient for customers.
4. Catalogue marketing: catalogue marketing refers to sales made through

catalogues mailed to a select list of customer„s or made available in a store. In
catalogues basic product and pricing information is given along with instructions
for placing an order The kind of delivery (mail, express service parcel post) that
the customer wants can be mentioned in the order
5. Tele marketing: To provide more convenience and service satisfaction to

customers, goods and service are sold through telephone contact this method is
useful for customers who want to avoid traffic congestion and parking problems.
Telemarketing allows retailers to provide customers information on new
merchandise and upcoming sales events. Retailers who use telemarketing deliver
merchandise to the customer„s residence or hold it till it is picked up by the
customer at a later date.
6. TV home shopping: It is a medium of marketing through which Shop-by

TV retailers demonstrate a product and describe its benefits and uses lf a customer
wants to purchase the product he can order it through email using Internet or
telephone.TV home shopping works in the following manner: The merchandise
items are displayed described and demonstrated on television. Using the toll-free
number provided, customers can place orders. Payments are done through credit
cards The goods are delivered by courier service along with a guarantee. B. Non-
traditional non store retailers:
1. World Wide Web: The use of the World Wide Web allows people to
access in formation about products (using the web address of the retailers home
pages) .Retailers websites allow customers to order with a click of the mouse. To
attract potential customers, retailers also send details of new products through
email to customers. Retailers can use the Internet as a medium for promoting their
goods and service all over the globe at minimum cost They can even conduct
research on customers with the help of the Internet. Moreover, the Internet
reduces the costs of retailers as it allows them to use low cost electronic mail to
communicate with customers.
2. Video kiosks: The term kiosk is derived from a Turkish word which
means open summer house or pavilion Kiosks are often placed near the entrances
of shopping malls. A video kiosk is a freestanding inter active computer terminal
that displays product and related information on a video screen; it often uses a
touch screen to allow consumers to select items
3. Video catalog: A video catalog is a retail catalog on a CDROM disk. It

has to be viewed on a computer monitor after viewing the catalog the consumer
can call up the retailer to order the goods. The disk allows the customer to quickly
gather information about the retailer's products.
2.2 GST Impact on Retail Sector and Retailers in India

GST brings the following advantages to retailers and retail shoppers in the
country.
Lower Taxes
GST effectively replaces all the various indirect taxes being applied to the supply
of retail products. Before GST, retailers had to pay multiple taxes, including VAT,
CST, service tax, excise duty, etc, amounting to around 30% of the product cost.
After GST, there is only a single tax, varying from 12 to 28% on different

products. GST also reduces the cascading of taxes as the credit for input taxes can
be now claimed by retailers.
Input Tax Credit
Unlike the previous tax regime, GST has the provision of input tax credit, in
which a retailer can claim credits for the tax previously paid by him on the
purchase of inputs. This not only saves tax but also it reduces the cascading effect
of taxes.
Reduced Complications
The less number of taxes means less complexity. Also, GST is a completely
digital tax system, that means retailers can plan and file the returns online without
having to manage a lot of physical documents, accounts, etc.
New Promotional Strategies
The new GST tax regime has forced retailers to replan and implement a
completely new promotional strategy in sharp contrast to the erstwhile strategy of
promotional gifts and items. This is primarily because under GST all supply
channels are accountable and accordingly attract some tax.
Ideal for Start-ups
The Government has already announced tax rebates for entrepreneurs and start-
ups. With GST getting rid of the complications associated with the retail sector, it
is inevitable that budding start-ups would tap into this opportunity. Here are some
disadvantages of GST for the retail sector in India:
Unable to understand
The main disadvantage of GST is, start-ups find it difficult to understand and
comply with its rules & regulations. Except for composite taxpayers, others have
to file monthly GST returns and need to update sales & purchase details on GST
portal. Its time consuming and a little bit complicated for those who have less
accounting knowledge. As GST is mandatory for all businesses even a business
with no transaction has to register under GST and can file nil returns. In case of
late filing or non-filing, a business has to pay late filing charges and penalties. It
means GST filing is mandatory for all. Small business & start-up owners who
have less knowledge on accounting they are finding it difficult t understand the
rules. To resolve this issue they are hiring chartered accounts by paying more so
for them it„ a loss and a complicated tax structure.
Online tax filing
GST return filing has to be done on its portal, which is web-based. Due to lack of

internet knowledge & poor internet connection in the rural sector, it became
difficult for business owners to file tax on time. It„s a major setback for GST.
Pay more tax Under GST a business with a turnover above Rs.20 Lakh has to pay
tax while in the VAT a business with turnover above Rs.1.5 Crore had to pay
excise duty. So, in GST small businesses has to pay more tax. GST indeed a
simple tax but creates more tax burden on small businesses & start-ups.
2.3 SCOPE OF GST
GST is to be charged on goods and services at all levels starting from production,
manufacture, wholesale and retail;
1. GST is to be charged on goods and services supplied within the country or
imported into the country;
2. Supplies made by the Federal and State Government departments are not
within the scope of GST except for some services prescribed by the Minister of
Finance;
3. Supplies made by the local authorities and statutory bodies in relation to
regulatory and enforcement functions are not within the scope of GST; and GST
charged on all business inputs such as capital assets and raw materials is known as
input tax whilst GST charged on all supplies made (sales) is known as output tax.
For eligible businesses, the input tax incurred is fully recoverable from the
Government through the input tax credit mechanism.
Taxable Supply
For a supply to attract GST, the supply must be taxable. Taxable supply
has been broadly defined and means any supply of goods or services or both
which, is leviable to tax under the Act. Exemptions may be provided to the
specified goods or services or to a specified category of persons/entities making
Inter/Intra State Supply

The location of the supplier and the place of supply determine whether a
supply is treated as an Intra State supply or an Inter State supply. Determination of
the nature of supply is essential to ascertain whether integrated tax is to be paid or
central plus State tax are to be paid. InterState supply of goods means a supply of
goods where the location of the supplier and place of supply are in different States
or Union territories. Intra State supply of goods means supply of goods where the
location of the supplier and the place of supply are in the same State or Union
territory. Imports, Supplies from and to SEZs are treated as deemed InterState
supplies
Composite/Mixed Supply
A composite supply means a supply made by a taxable person to a
recipient comprising two or more supplies of goods or services or any
combination thereof, which are naturally bundled and supplied in conjunction with
each other in the ordinary course of business, one of which is a principal supply.
For instance, a travel ticket from Mumbai to Delhi may include service of food
being served on board, free insurance, and the use of airport lounge. In this case,
The transport of passenger, constitutes the pre-dominant element of the composite
supply, and is treated as the principal supply and all other supplies are ancillary.
The GST Law lays down the tax liability on a composite or mixed supply in the
following manner.
1. Composite Supply comprising two or more supplies one of which, is a principal
supply, shall be treated as supply of such principal supply.
2. Mixed Supply comprising two or more supplies, shall be treated as supply of
that particular supply which attracts the highest rate of tax.
2.4 OBJECTIVES OF GOODS AND SERVICES TAX (GST)

1. Developing Common National Market:
GST is levied at same rate on similar goods and services in all the states and
Union Territories. For example Mobile phone sold across India are levied GST
@18%. It sets a ground for developing common national market.
2. Ease of Doing Business:
In the pre-GST period, there were many indirect taxes administered by different
authorities. As a result, a business had to register itself separately under each such
Act and also had to comply with each such indirect tax. For example, Excise Duty,
Sales Tax and Service Tax etc. were separately administered. The introduction of
GST has eased the going of business as it will be registered and administered only
under one indirect tax, i.e., GST. Hence, ease of doing business.
3. No Cascading Effect of GST:

GST Paid (Input GST) on purchases of goods and/or services is set off against
GST Collected on Sale of goods and/or services. As a result, GST is levied on the
difference between sale value and purchase value. In effect, GST does not have
cascading effect.
4. To Simplify Indirect Tax Regime by having one Tax and Fewer Rates of Taxes:

GST has replaced many indirect taxes (Excise Duty, Sales Tax, Service Tax etc.).
The earlier indirect tax regime had been complex both for the Government and
business. Since, GST has replaced almost all indirect taxes; it simplifies the
application and administration of indirect taxes.
5. Better Tax Management:
GST, being administered through computer system besides it being a single
indirect tax, has resulted in better tax management as tax evasion is controlled
besides timely collection of tax. For example, credit for Input GST is granted if
the tax payer collecting GST has paid the tax in Government Account.
6. Goods becoming cheaper:
Since GST Paid (Input GST) is set off against GST Collected (Output GST), GST
does not have cascading effect as against earlier years when there was no set off of
indirect taxes (e.g. Excise Duty) paid against indirect taxes collected. As a result,
goods and services shall become cheaper.
7. Attracting Foreign Investors:
Investments from outside India were not high because of multiple indirect taxes.
Introduction of GST and removal of multiple indirect taxes shall increase Foreign
Direct Investment (FDI) in India.
8.Uplifting GDP:
The structure of GST is such that it is levied at every stage of sale of goods and/or
services. It means businesses will be largely through recorded transactions
resulting in increase in tax collection by the Government due to recorded sales
resulting in uplifting GDP. Every state Union Territory has its own Central GST
Act and State GST Act. For Li. will have its own Central GST (CGST) Act and
Delhi GST (DGST) Act. mil Nadu will have Central GST (CGST) Act and Tamil
Nadu GST Central Government has Integrated GST Act (IGST) but for the
purpose dear understanding, GST is discussed as CGST, SGST and IGST instead
GST for each state separately.
2.5 GST Advantages and Disadvantages
2.5.1 GST Advantages
1. GST is a transparent tax and also reduces number of indirect taxes.
2. GST will not be a cost to registered retailers therefore there will be no hidden
taxes and the cost of doing business will be lower.
3. Benefit people as prices will come down which in turn will help companies as
consumption will increase.

4. There is no doubt that in production and distribution of goods, services are

increasingly used or consumed and vice versa.
5. Separate taxes for goods and services, which is the present taxation system,
requires division of transaction values into value of goods and services for
taxation, leading to greater complications, administration, including
compliances costs.
6. In the GST system, when all the taxes are integrated, it would make possible the
taxation burden to be split equitably between manufacturing and services.
7. GST will be levied only at the final destination of consumption based on VAT
principle and not at various points (from manufacturing to retail outlets). This
will help in removing economic distortions and bring about development of a
common national market.
8. GST will also help to build a transparent and corruption free tax administration.
9. Presently, a tax is levied on when a finished product moves out from a factory,
which is paid by the manufacturer, and it is again levied at the retail outlet when
sold.
10. GST is backed by the GSTN, which is a fully integrated tax platform to deal
with all aspects of GST.
2.5.2 GST Disadvantages

Some Economist says that GST in India would impact negatively on the real estate
market. It would add up to 8 per cent to the cost of new homes and reduce demand
by about 12 per cent.
1. Some Experts says that CGST (Central GST), SGST(State GST) are
nothing but new names for Central Excise/Service Tax, VAT and CST. Hence,
there is no major reduction in the number of tax layers.
2. Some retail products currently have only four per cent tax on them. After
GST, garments and clothes could become more expensive.
3. The aviation industry would be affected. Service taxes on airfares
currently range from six to nine per cent. With GST, this rate will surpass fifteen
per cent and effectively double the tax rate.
4. Adoption and migration to the new GST system would involve teething
troubles and learning for the entire ecosystem.

2.6 Need of GST in India

There are various taxes that have to pay at every stage and differently
collected by State and Central Government and rates differ from one state to
another. If we talk about GST, it will be unified whole nation and taxes will be
divided among Central and State Government, which will make easier to provide
services and goods across country, as no more additional state taxes will be
imposed.
Why in India, there is a need for GST?
Imposing several taxes on goods and services can lead to high cost and
inefficient tax structure which can subject to shirking and revenue disclosures. The
need for GST in Indian Taxation System will add value at each stage and will set
off the rates both at state and at central level. Introducing GST, will increase the
efficiency of taxation, improves the economic growth and it will bring whole
nation to one national market.
What happen in present scenario? Our present taxation system is very
complex and very confusing, corruption chance is there, which leads to distrust of
government, there are hidden tax for exports, whereas no charge applicable on
Importing of Goods/Services from one state to another.
Just to overcome these issues, Rajya Sabha introduced GST bill, which
will bring transparency to taxation and consumer will get to know how much tax
amount they are paying to government for sale/ purchase/ manufacturing.
Following are some of the points that can easily explain the need for GST: -
Tax Structure will be Simple: – At present, there are huge number of taxes that has
to pay by consumers, with GST it will single tax to pay, which is much easier to
understand. For businesses, accounting complexities will reduce and results less
paperwork, which will save both time and money. GST will increase economic
GDP by 2%-2.5%.
Tax revenue will increase: Simple tax structure will bring more tax payers and in
return it will be revenue for government. Competitive pricing: What GST will
do? Well, it will eliminate all other taxes of indirect taxes and this will effectively
mean that tax amount paid by end users (consumers) will reduce. As in
Economics, lower will the prices, more will be demand for that product, results in
more consumption of goods, which will be benefited to companies.
Boost to exports: If Indian market will be competitive in pricing, then more and

more foreign players will try to enter the market, which results in more numbers
of exporters and benefits to Indian Market. As far there is no tax rate is finalized,
but yes GST is much needed in the countries where, it lacks transparency and
complex taxation system. There is a question in everyone „s mind……” Do we
have to pay tax at different rates and at different levels? Is there no solution to
this? Yes, the solution to this is implementation of GST.

Chapter-3
Review of Literature
1. Hemanth Y and Dr Arun B M in their study they said that the term
Tax is derived from latest word “Taxare” that means to estimate, GST has merged
both central and state tax into a unified tax system across nation. Retailers are
facing challenges use terms of handling merchandise across categories which in
turn has effect in their bottom line of business, keeping this backdrop in mind. The
paper addresses the broad prospective of GST in present scenario of retail business
and the implimentation of GST across product category as retail stores.
2. Asha Lakshmi R K and Jerin George in the study of goods and

service tax on the retailers, includes a detailed analysis of awareness of GST
policies and the implementation procedures among retailers. This research takes
certain variables that act as determining factor in retailer‟s acceptance of GST. The
scope of the study is to know the impact of GST on retailers. The result of this
study is to understand the various issues and dilemmas of retailers during
implementation of GST.
3. Smt Suvarna S Walikar in her study she depicted that, retail sector is
one of the key pillars for Indian economy and it accounts for around 10 % of GDP,
GST will usher in wide changes in various industry and sectors and retail industry
is not an exception India retail sector is comprised of organized retail and
unorganized retail i.e. sale through traditional family or small stores or shops. The
share of organized retail is India is still less than 20 percent and majority
contribution is of unorganized sector .The E-commerce sales is still less than 7%
of overall retail sector is India.
4. Sudip Banarjee and Priya Agrawal in this study was before

implementation of GST in India, Government of India collected Indirect taxes on
the various names. Direct tax is mostly define clearly to tax payer , but indirect tax
does not define clearly because it collected by government to each stage
manufacturer to customer ,for clearing of indirect tax government of India in
introduced biggest tax reform after independence seen 1947 is the name of GST,

after implementation in GST in India , there are several issues arias is trout of the
GDI. Professionals business man and even customers.
5. Robin Roy, Dr Autiny Jaseph K ,Elsa Sabu ,Alphy Maria Manual In

this study was tax is not a temporary contribution, it is a mandatory financial
border that is imposed by the government on the income and business profit of the
people, "one nation one tax" The GST has become the prominent topic discussed
since it‟s implementation inter India on 1st July 2017.The study seeks to evaluate
the awareness , perception , practical difficulties and extent of imput of awareness
an practical difficulty of retail traders after implementation of new tax system .
For the purpose of the study the samples were collected from the retail traders and
the collected data were analyzed using statistical techniques such as ANOVA.
6. Dr. R Sridevi the objective of this study is to analyze the significant

effect of GST system in retailer‟s business with reference to Coimbatore district,
presumably. GST system have areated uneasiness among various sectors in Indian
economy. The case of retail sector is predominant effect as it generate wide
employment opportunities in rural and urban sector and also enable volume of
transactions, as per global scenario. India is a considered to be highest in turns of
per capital retail space and the fifth largest preferred retail destination the rapid
growth of retail sectors has made a way for GST are to move forward and it is an
important discussion across several division .The real challenges faced by the
retailers is the present GST system will be sourced through this study and
suggested for better integration of stage economies and boost over all growth.
7. Swadesh Deepak and Meera Singh This study was primary attempt to
implement GST in India was made on November 10 .2009. To give boost to
indirect tax structure and create a common market several deadlines have already
been set to implement GST in india but all has been extended due to several
abstacle in it‟s way .GST is considered as a destination based consumption tax , in
which the consumption status are liable for revenues as the origin status is likely
to get 1% additional tax for at least 2 years .It is considered to be a major
improvement over the pre-existing central excise duty at the national level and the
sales tax system at the state level . The new tax will be a further significant
breakthrough and the next logical step towards a comprehensive indirect tax

reform in the country .The implementation of GST will increase the tax revenue
for the government and it would end the distortions of differential treatment of
manufacturing and service sector.
8. Mohammed Babagana Shettima the biggest tax reform that took place
in India. which was founded on the nation of ―one nation, one market, one tax
―, in this study focus to the GST are to eliminate the cascading impact of taxes on
production and distribution cost of goods and services. How to GST works in
India. And what are the benefits of GST, feature of GST and advantages and
disadvantages of GST. In this is research also focus to the which products values
are increasing decreasing after GST implementation. Under GST scheme taxation
burden will be divided equally between manufacturing and services. Through a
lower tax rate by increasing the tax base and minimizing exemption.
9. Ms. Sulakshna. Mr. Sachin Singh This article aims to explore impact
of GST on Indian market system. the Indian GST case is deliberated for one
country, one tax, one market‖ for effectual tax collection checking corruptions and
facilitating smooth interstate movement of goods. The major findings of this paper
are defining benefits of GST on our Indian market and impact on manufacturer „s
distributors and retailers. GST will play a vital role in our Indian marketing. It is
expected to bring down prices and hence the inflation since it will remove the
impact of‖ tax on tax‖ and allow flow – less credit. It is also explained how benefits
for industries, business, central government and state government and customer.
GST impact to manufacture decrease production tax flowing in India. In the retail
sector was developed. It is help to changes in decision making and less tax.
Liberated goods. It is also impacting the FMCG product, under the distributor.
10. Dr. C.J. Priya and Harshitha M.C GST is an indirect which is
common that is one tax should be implemented by the central government that is
one common tax inside the country GST led to a number of protests an increase in
overall taxes and hence the prices of goods. GST levied all the transaction, it‟s also
given the clear picture about the differentiation between the black money and GST
Central government had proposed to insulated the revenues of the states from the
impact of GST, with the expectation that in due course. GST will be levied on
petroleum and petroleum products. Some products are available in cheap rate after

GST and some product are rate also increase here those discuss the advantages and
disadvantages also, experts say that GST is likely to improve tax collections and
boost Indians economic development by disrupting all the tax barriers between
state and integrate country through a single tax rate.
11. Ms. N Ramya and Ms. D. Sivasakthi GST is a comprehensive tax

levy on manufacture. Sale and consumption of goods and service. GST termed as
biggest tax reform in Indian tax structure. The purpose of GST is to replace all
these taxes with single comprehensive tax. Bringing it all under single umbrella.
The purpose is to eliminate tax on tax. This paper will throw light on GST its
impact to the food from CENVAT and 4% VAT on food items. It is also impact to
the housing and construction industry and FMCG (FAST MOVING CONSUMER
GOODS) Retail sector changes are tax net so as to keep overall GST rate law. All
interstate transportation of goods can be tracked through the proposed IT network.
Financial service not charged GST it is also impact the information technology.
12. Ritu phogat Production and distribution cost of goods and service, the
exclusion of cascading effects, tax on tax will significantly improve the
competitiveness of original. Goods and services which leads to beneficial impact
to the GDP growth, Dual GST are followed in Indian economy CGST and SGST.
There are some positive and negative impact was facing in the Indian economy it
is also helpful to growth of revenue in states and union. And reduces transaction
costs and unnecessary wastages. GST leviable on all supply of goods and
provision of services as well combination thereof. All the sector of economy
where the industry, business including government department and service sector
shall have to bear impact of GST. All section of economy viz. big, medium, small
scale unit intermediaries, importers, exporter, traders, professionals and consumers
shall be directly affected by GST.
13. Dr. Arun Kumar Mishra the impact of GST on economic growth
India. Only a registered person can change and collect GST on the taxable
supplied of goods and service made by him. GST charge on the value or selling
price of the products the amount of GST incurred on input (input tax) can be
deducted from the amount of GST charged (output tax) by the registered person.
GST is a consumption-based tax levied on sales, manufacture and consumption on

goods and service at a national level. Benefit people below the poverty line, GST
also developing market situation in day by day. Corruption free taxation system
followed negative impact for real-estate market. older terms service tax, CST and
VAT in a new way charged single taxation system the central excise tax is levied
at the time of manufacturing but GST is levied at the selling stage.
14. Dr. Ansuman Sahoo and Ansuya Swain Goods and Services Tax
(GST) is a broad based and a single comprehensive tax proposed to be levied on
goods and services consumed in the country. It is necessary for the growth of the
country. It will help the country to improve the GDP. GST, in fact is the
association of all indirect taxes. GST is levied at every stage of the production-
distribution chain with applicable set offs in respect of the tax remitted at previous
stages. It is basically a tax on final consumption. In simple terms, GST may be
defined as a tax on goods and services, which is to be levied at each point of sale
or provision of service, in which at the time of sale of goods or providing the
services the seller or service provider may claim the input credit of tax which he
has paid while purchasing the goods or procuring the service.
15. Dr. Ashok Kumar Gupta, Drmenu Maheshwari and Mrs

Sudarshana Sharma, the main purpose of GST is to eliminate the compounding
effect taxation by fixing the single tax rate and to create a single unified Indian
market to boost Indians economic development by integrating state economies and
provide a common market for goods and services. GST has affected all the sectors
of Indian economy various product and services and changes in compliances
procedures have been taken in the 22nd and 23rd GST council meeting held in
October and November respectively here secondary source which include various
articles, journals, reports, different web sites etc. this tax is collected on value
addition on goods and services at each stage of sale or purchase in supply. Impact
of GST on major sectors of Indian economy those are Real-estate, FMCG sector
Banking sector, Manufacturing sector, Service sector, Agriculture Automobile.

CHAPTER – 4
DATA ANALYSIS AND INTERPRETATION

Table No: 4.1
The table showing classification according to their Gender

No of
Si No Gender respondent percentages
1 Male 22 73.33
2 Female 8 26.67
total 30 100
Source: Field Survey
Graph No: 4.1
The graph showing classification according to their Gender
100
90
80
70
60
50 2 Female
40 1 Male
30
20
10
0
No of respondentpercentages
From the above graph shows the classification of respondents on the basis
of gender out of 30 respondents, 50% are male remaining 30% are female. The
majority of the respondents 50% are male. Male and female are to be equal in the
field of retail sector.

A STUDY ON IMPACT OF GOODS AND SERVIES TAX ON RETAIL
Table No:4.2
The table showing classification according to their Age

No of
Si No Age respondent percentages
1 Below 20 3 10
2 20 - 30 26 86.67
3 30-40 0 0
4 Above 40 1 3.33
Total 30 100
Graph: 4.2
The graph showing classification according to their Age
Above 40 Age
3%Below 20
30-4010%
0%
20 - 30
87%
From the above graph shows the classification of respondents on the basis of
age out of 30 respondents, 10% are belongs to Below 20 aged, 86.6% are belongs
to 20-30 years aged, 0% are belongs to 30-40 years aged, remaining 3% belongs to
above 40 years of age group, the majority 86% of the respondents engaged in the
retail business so their age group ranges from 20-30 aged..
Government first grade college Page

Table No: 4.3
The table showing classification according to their marital Status
Marital No of
Si No Status respondent Percentages
1 Married 19 63.33
2 Unmarried 11 36.67
total 30 100
Graph No: 4.3
The graph showing classification according to their marital Status
90
80
70
60
50
40
30 Percentages
20 No of respondent
10
0
MarriedUnmarried
Si No 1 2
As per the above table shows that 6.33 % respondents are belong to married
peoples, 36.67% respondents are belongs to unmarried peoples.
Considering the above analysis we interpret that Retail business is more

attracting for unmarried people‟s rather than married peoples.

Table No: 4.4
The table showing classification according to their Qualification
No of
Si No Qualification respondent percentages
1 SSLC 1 3.33
2 PUC 5 16.67
3 Degree 4 13.33
4 Post Graduate 20 66.67
Total 30 100
Graph No: 4.4
The graph showing classification according to their Qualification
70
60
50
40
30
20
10
0
SSLC PUC Degree Post Graduate
Table and graph 04 showing the 3.33% respondents are SSLC qualifications,
16 % respondents are PUC qualifications, 13.33% respondents Degree
qualifications and 66.66% respondents are Post graduates on their educational
qualifications.
From the analysis shows that maximum respondents are post graduate
qualifications, it clearly shows more respondents are degree qualifiers.

Table No:4.5
The table showing classification according to their Types of business

Types of No of
Si No Business respondent percentage
1 Kirani Store 8 26.67
Departmental
2 Store 4 13.33
3 Chain Store 1 3.33
4 Others 17 56.67
Total 30 100
Graph No: 4.5
The graph showing classification according to their Types of business
Kirani Store
Departmental Store
Chain Store Others
From the above graph shows the classification of respondents on the basis of types
of business, 26.66% of respondents are maintain the kirani stores, 13.33% of
respondents are maintain the department stores, 3.33% of respondents are
maintain the chain stores, remaining 56.66% of respondents are maintain the other
stores, majority of the respondents are 56.66% maintain the other retail business.

Table No:4.6
The table showing classification according to their Annual income
No of
Si no Annual income respondent Percentage
1 Below ₹10000 9 30
2 ₹10000 - ₹50000 12 40
3 ₹50000 - ₹100000 3 10
4 ₹100000 Above 6 20
Total 30 100
Graph No: 4.6
The graph showing classification according to their Annual income
Annual Income
20% Below ₹10000

30%
₹10000 - ₹50000
10%
₹50000 - ₹100000
₹100000 Above
40%
of annual income, 30% are having the annual income of below-10,000, 40% are
having the annual income 10,000-50,000,10% are having the annual income
50000-100000, remaining 20% respondents are having the above-100000,
majority of the respondent 40% belongs to 10000-50000 annual income, has a
retail business consist of less turnover so there ranges 10000-50000, retail
business are the small business activity comparing to the other business that wise
annual earing also less.

Table No: 4.7
The table showing classification according to their Awareness about GST
No of
Sl no Awareness about GST respondent Percentage
1 Yes 29 96.67
2 No 1 3.33
total 30 100
Graph No: 4.7
The graph showing classification according to their Awareness about GST
Percentage
Yes
No
No of respondent
0 20 40 60 80 100120
of awareness about GST, out of the 30 respondents. 96.6% are awareness about
GST remaining 3.33% is not awareness about GST, majority 96.6% of the
respondent „s awareness about GST. As everyone need to obtain the registration so
all are aware about GST and also government try to providing the information
about GST in online, media, newspaper etc.

Table No:4.8
The table showing classification according to their Year in business
No of
Si no Year respondent Percentage
1 Below 1 Year 9 30
2 1 Year to 2 Year 13 43.33
3 2 Year to 5 Year 4 13.33
4 Above 5 Year 4 13.33
Total 30 100
Graph No: 4.8
The graph showing classification according to their Year in business
50 43.33333333
40 30
30
20
10 13.33333333 13.33333333
0
Below 1
Year 1 Year to 2
2 Year to 5
Year Above 5
Year
Year
of Year, 30% are having of below-1 year, 43.33% are respondents having of 1
year2 year,13.33% respondents are having of 2 year- 5 year remaining 13.33%
respondents are having above 5 year.

Study on impact goods and service tax on retail sector
Table No:4.9
The table showing classification according to their Locality
Si no Locality No of respondent Percentage
1 Rural 20 66.67
2 Urban 10 33.33
total 30 100
Graph No: 4.9
The graph showing classification according to their Locality
70
60
50
40
30
20
10
0
Rural
Urban
As per the above table shows that 6.66 % respondents are belong to rural, 33.33%
respondents are belongs to urban.
Considering the above analysis we interpret that Retail business is more attracting for
rural are rather than urban area.

Table No:4.10
The table showing classification according to the beneficial system of Tax
Si no Particular No of respondent Percentages

1 GST System 28 93.33
2 VAT 2 6.67
otal 30 100
Graph No: 4.10
The graph showing classification according to the beneficial system of Tax
GST SystemVAT
7%
93%
As per the above table shows that 93.33 % respondents are belong to GST system, 6.66%
respondents are belongs VAT. Considering the above analysis we interpret that Retail
business is more attracting for GST system rather than VAT system.

Table
The table showing classification according to their Opinion about implementation of GST
No of
Si no Opinion respondent Percentages
1 Very Good 3 10
2 Good 18 60
3 Poor 0 0
4 Very Poor 0 0
5 Neutral 9 30
Total 30 100
Graph No: 4.11
The graph showing classification according to their Opinion about implementation of GST
70
60
60
50
40
30
30
20
10
10
0 0
0
Very Good Good Poor Very Poor Neutral
From the above table and graph shows that opinion about retail business,10%
respondents are very good,60% respondents are good, 0% respondents are poor, 0%
respondents are very poor 30% respondents are neutral.

Table
The graph showing classification according to their Opinion about implementation of GST in
tax payment
Si No of
no Opinion respondent Percentages
1 Very Good 2 6.67
2 Good 21 70
3 Poor 1 0
4 Very Poor 0 0
5 Neutral 6 20
Total 30 100
Graph No: 4.12
The graph showing classification according to their Opinion about implementation of GST in
tax payment
70
60
50
40
30
20
10
0
Very Good Good Poor Very Poor Neutral
From the above table and graph shows that opinion about retail business, 6.6%
respondents are very good, 70% respondents are good, 0% respondents are poor, 0%
respondents are very poor, 20% respondents are neutral. The majority of respondents are
opinion is good rather than remaining opinions.

Table No:4.50
The table showing classification according to their level of satisfaction with present GST
system
Level of No of
Si no satisfaction respondent Percentages
1 Satisfied 20 66.67
2 Very satisfied 4 13.33
3 Dissatisfied 0 0
4 Very dissatisfied 0 0
5 Neutral 6 20
Total 30 100
Graph No: 4.13
The graph showing classification according to their level of satisfaction with present GST
system
Satisfied Very satisfied Dissatisfied

Ver dissatisfied Neutral
From the above table and graph shows that satisfaction of retailers 66.66%
respondents are satisfied, 13.335% respondents are very satisfied,0% respondents are
dissatisfied, 0% respondents are very dissatisfied, 20% respondents are neutral. The majority
of respondents are to be satisfied is neutral.

Table
The table showing classification according to their profits after GST implementation
No of
Si no Particular respondent Percentage
1 Increase 13 43.33
2 Decrease 8 26.67
3 Can't Say 9 30
Total 30 100
Graph No: 4.14
The graph showing classification according to their profits after GST implementation
50
40
30
20
10
0
Increase Decrease Can't Say
Table and graph show that profit by GST implementation 43.33% respondents are
Increase, 26.66% respondents are Decrease, 30% respondents are Can‟t say. The majority of
retailer‟s profit is high.

Table No: 4.15
The table showing classification according to their Problems

No of
Si no Problems respondent Percentages
1 Paper work 1 3.33
2 Registration 9 30
3 Bargaining 6 20
Customer
4 Satisfaction 9 30
Unaware of Clear
5 process 5 16.67
Total 30 100
Graph No: 4.15
The graph showing classification according to their Problems
Paper work Registration Bargaining

Customer Satisfaction Unaware of Clear process
From the above table and graph shows that Problems of the retailers 3.33%
respondent are paper work, 30% respondents are registration, 20% respondents are
bargaining,30% respondents are customer satisfaction, 16.66% respondents are unaware of
clear process. The majority of respondents Customer satisfaction is higher than others.

Table No:4.16
The table showing classification according to their increase or decrease in sales
No of
Si no Particular respondent Percentages
1 Increase 11 36.67
2 Decrease 10 33.33
3 Can't Say 9 30
total 30 100
Graph No: 4.16
The graph showing classification according to their increase or decrease in sales
40
35
30
25
20
15
10
5
0
Increase
Decrease
Can't Say
Frome the above table and graph shows that sales volume 36.66% respondents are
increase, 33.33% respondents are decrease, 30% respondents are Can‟t say. The majority of
retailers sales volume is increase.

Table
The table showing classification according to their Retailer Satisfaction
No of
Si no Retailer satisfaction respondent Percentages
1 Satisfied 16 53.33
2 Highly Satisfied 2 6.67
3 Dissatisfied 1 3.33
4 Highly Dissatisfied 0 0
5 Neutral 11 36.67
Total 30 100
Graph No: 4.17
The graph showing classification according to their Retailer Satisfaction
100%
80%
60%
40%
20%
0%
SatisfiedHighly DissatisfiedHighly Nuetral

Satisfied Distisfied
As per above table and graph shows that retailer satisfaction 53.33% respondents are
satisfied, 6.66% respondents are highly satisfied, 3.33% respondents are dissatisfied, 0%
respondents are highly dissatisfied, 36.66% respondents are Neutral. The majority of the
retailer‟s satisfactions is neutral other than others.

Table
The table showing classification according to their Sources of Information
Sources of No of
Si no information respondent Percentages
1 Friend 4 66.67
2 Media 9 15
3 Internet 11 18.33
4 Others 6 20
Total 30 100
Graph No: 4.18
The graph showing classification according to their Sources of Information
Friend Media Internet Others
Frome the above table and graph shows that Sources of informations is retailers
66.66% respondents are Friend, 15% respondents are Media, 18.33% respondents are
Internet, 20% respondents are other source of informations. The majority of the retailers
getting source from the friends.

Table
The table showing classification according to their Monthly Turnover
No of
Si no Monthly turnover respondent Percentage
1 ₹20000 - ₹50000 23 76.67
2 ₹50000 - ₹100000 4 13.33
3 ₹100000 - ₹500000 2 6.67
4 ₹500000 Above 1 3.33
Total 30 100
Graph No: 4.19
The graph showing classification according to their Monthly Turnover
80
70
60
50
40
30
20
10
0
₹20000 - ₹50000 - ₹100000 - ₹500000

₹50000 ₹100000 ₹500000 Above
Frome the above table and graph shows that Monthly turnover of retailers
76.665 respondents are Rs.20000-Rs.50000, 23.33% respondents are Rs.50000Rs.100000,

6.66% respondent are Rs.100000-Rs.500000, 3.335 respondents are Rs.500000-Above. The
majority of retailer monthly turnover is Rs.20000-Rs.50000 are small retailers.

Study on impact goods and service tax on retail
The table showing classification according to their facing problems

Facing No of
Si no problems respondent Percentages
1 Yes 23 76.67
2 No 7 23.33
total 30 100
Graph No: 4.20
The graph showing classification according to their facing problems
Yes No
Frome the above table and graph shows that Facing problems in retailers 76.665
respondents are yes, 23.33% respondents are no, the majority of retailers facing problems in
retail business.

CHAPTER – 5
SUMMARY OF FINDINGS, CONCLUSION AND

SUGGESTIONS
FINDINGS
1. Most of the respondents are having the less knowledge in the concept of GST.
2. After the implementation of GST, most of retailers are having more attractions for
GST.
3. Most of the retailers has been satisfied in the GST by compared to now with the
earlier stage of Implementation of GST.
4. After implementation, the profit may be varying in different retail sectors as
increased in profits at 43.33%, decreased at 26.66℅ and can‟t say at 30℅.according
to survey.
5. In the GST process, the retailers are facing the problem at Registration process of
the GST.
6. They felt that GST is difficult at the implementation stage to understand.
7. After implementation, the Auditor and Tax practitioners are overcharging to file
the GST.
8. According to the whole study, the cost of the FMCG products is been increased
after the goods fall under GST.
9. In the sales of goods in the Retail as Kirani, departmental store, and other has been
felt down than the before implementation of GST.
SUGGESTIONS:
• Create awareness to calculate tax liability by retailer pay checks reduce the cost
for audit fee and don „t needs to calculate tax liability to auditor.
• The penalty and fine will reduce is well and good.
• The problem in defining the place of origin created problems in taxation. It is

necessary to have clear statute to decide the place of destination. Integrated GST
[IGST] Act has to be passed to monitor inter-state transactions of goods and
services.

• Provide the awareness about the input tax credit because retailer depends on
auditor to calculate.
• Reduce the GST rates on all goods which are used in retailing day to day activity.
• Increased time limit for filling returns because it causes expenses and its effect on
regular work.
• Multi- taxing and tax evasion would be less while implementing GST system.
This is to be done by building information technology backbone- A GST portal
with a Special Purpose Vehicle [SPV] has to be launched entirely to carry out the
interrelated activities among all the tax departments.
CONCLUSION:
It is encouraging that when GST was introduced in New Zealand in 1987, it resulted
in 45% higher revenue than expected, mainly due to improved compliance. VAT has really
showed a progress in many states and the Centre has rightly compensated to many states. The
success story would continue by the implementation of GST in India. There were hurdles and
agitation for implementation of VAT in India. Puducherry was the last but before/state to
implement VAT. GST is an extension of VAT which includes services also. Initial losses of
revenue to states would be compensated by the Centre. When GST is implemented in good
spirit the revenue of both Central government and state government shall be increasing in the
long run.
The main leg behind the implementation of GST is due to differences amongst the
Centre and States on the RNR (Revenue Neutral Rate), compensation package and its
Constitutional amendment Which is required to be passed with twothird majority in both the
Houses of Parliament and ratification by a simple majority by at least half of state assemblies.
The Centre has decided to review the existing exemptions from Central Excise Duty so that
list of goods exempt from CGST and SGST list and 99 items exempted from VAT are taken
off from both the components of GST. VAT has to some extent reduced tax-evasion and
frauds. It is encouraging to note that most of the traders and general public are aware of VAT.
GST, the major reforms on indirect taxes, will reduce tax burden due to cascading effect. The
implementation of GST will be in favour of free flow of trade and commerce throughout the
country.

In the Beginning retailers think it is bad effect on sale and profit but day by day they
come to know that it is positive effect on business because of reduced price of products on
FMCG Goods and after some days sales become normal and Input tax credit can be available
for transaction carry among different states through GST and It leads to economic
development of country.

Learning experience:
I learned more something about this project, How GST works at retail sectors to
increase the efficiency of our country budget. It’s very useful.
Then GST is a unified tax system that replaced multiple indirect taxes leviedby both the
Central and State Governments. Under GST, both the Central and State Governments share
the authority to levy and collect taxes on goods and services.

QUESTIONNAIRE
Dear Respondents
I am MALLIKARJUNA M P Studying final year M.com at Govt First Grade College
Davanagere. As a part of my course I have undertook a project on A STUDY ON IMPACT
OF GOODS AND SERVICE TAX ON RETAIL SECTOR (with Special Reference to
Davangere city) Under the guidance of Mr.VENKATESH BABU S M.Com I request you to
spare few minutes to answer these questions as per your knowledge and opinion and I hope
the information given by you will be true and fair. The data which is collected by you will be
used only academic purpose and your identity will be kept confidential.
THANKING YOU
Yours faithfully:
MALLIKARJUNA M P
1. Name of the respondent
2. Adress
3. Gender
a. male ( ) b.female ( )
4. Age
a. below 20 ( ) b.20-30 ( )
c.30-40 ( ) d. above ( )

5. Marital Status
a. married ( ) b. unmarried ( )
6. Education Qualification
a. sslc ( ) b.puc ( )
c. degree ( ) d.post graduate ( )
7.Types of Business
a. kirani stores ( ) b. departmental stores ( )
8.Annual Income
a. below Rs.10000 ( ) b.Rs.10000-Rs.50000 ( )
c.Rs.50000- RS.100000 ( ) c.Rs.100000 above ( )
9. Awareness about GST
a. yes ( ) b. no ( )
10. Total experience in business
a. below 1 year ( ) b.1 year – 2 year ( )
c. 2 year – 5 year ( ) d. above 5 year ( )
11. Locality
a. rural ( ) b. urban ( )
12.Which tax system is beneficial
a.GST System ( ) b.VAT ( )
13. Openion about implementation of GST
a. very good ( ) b. good ()
c. poor ( ) d. very poor ( )
e. neutral ()

14. Opinion about Implementation of GST in tax payment
a. very good ( ) b. good ()
c. poor ( ) d. very poor ( )
e. neutral ()
15. Level of satisfaction with present GST system
a. satisfied ( ) b. Very satisfied ( )
b. dissatisfied ( ) d. very dissatisfied ( )
e. neutral ()
16. Profits after GST Implementation
a. Increase ( ) b. decrease ( )
c. can`t say ( )
17.Problems
a. paper work ( ) b. registration ( )
c. bargaining ( ) d. customer satisfaction ( )
e. Un aware of clear process ( )
18. Increase or decrease in sales after implementation of GST
a. Increase ( ) b. decrease ( )
c. can`t say ( )
19.Retailer satisfaction
a. satisfied ( ) b. Highly satisfied ( )
b. dissatisfied ( ) d. Highly dissatisfied ( )
e. neutral ()
20.Sources of information
a. friend ( ) b. media ( )
c. internet ( ) d. others ( )

21. Monthly turnover
a.Rs. 20000- RS.50000 ( ) b.Rs.50000-Rs.100000 ( )
c.Rs100000- RS.500000 ( ) c.Rs.500000 above ( )
22.Facing problems
a. yes ( ) b. no ()
23. If any suggestion
……………………………………………..
……………………………………………..

BIBLIOGRAPHY
1. https://taxguru.in/income-tax/impact-gst-retail- sector.html.
2. https://www.vccircle.com/how-gst-will-impact- indian-retail-biz/.
3. https://en.wikipedia.org/wiki/Goods_and_ Services_Tax_(India).
4. https://blog.allindiaitr.com/how-will-gst-impact- retail-sector.
5. https://en.wikipedia.org/wiki/Goods_and_ Services_Tax_(India).
6. www. gstindia.com
 Journals
 Research Paper
 Web sites.

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A STUDY ON IMPACT OF GOODS AND SERVICE TAX ON RETAIL SECTOR

Tax is not a temporary contribution; it is a mandatory financial burden that

Government first Grade College Page

1.1 Background of Goods and Services Tax (GST) In India

Government first Grade College Page

When did GST start?

November 2006: Parthasarthy Shome, the advisor to P. Chidambaram, mentioned

Government first Grade College Page

November 2012: P. Chidambaram and the finance ministers of states hold

Government first Grade College Page

August 2016: The Congress-led opposition finally agrees to the Government„s

Government first Grade College Page

1.2Meaning and definition:

1.3 GST Definitions

Section 2. Definitions In this Act, unless the context otherwise requires,-

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(5) ―agent‖ means a person, including a factor, broker, commission agent,

1.4 Features of GST

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2. Unified tax regime:

3. The four-tier rate structure:

4. Service tax rate under GST:

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6. Tax revenue appropriation between the centre and states:

8. Composition scheme under GST

9. Right to tax on territorial waters:

1.6 Need for Study:

 To examine benifits and opportunities of Goods and Service Tax.

 To Understand the concept behind GST.

 To learn the highlights of GST.

 To measure the pros and challenges of GST.

 To present further information of research work on GST.

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1,7 Objectives of the Study:

1.9 Meaning and Definition:

Shops may be located in residential areas, colony streets, community Canter „s or

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1.10 Functions of Retailing

1) Delivery of the goods to the end consumer

2) Is an essential part of the distribution chain

3) Finances the wholesaler

4) Stores the goods according to market requirement

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5) Lends a hand in manufacturer’s marketing initiative

6) Assumes storage and credit risks

7) Extends credit facilities to the consumers and assumes credit risk

9) Provides convenience in shopping

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Limitations of the Study:

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Conceptual framework of the topic

Organized Retail is characterized by high investment requirements, large

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2.1 Classification of retailers

Retailers can be classified according to their selling processes as store-based

l. Store Based Retailers:

1. Independent store: An independent store can be defined as a store, which

3. Franchise store: A franchise store can be defined as a store based on a

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4. Leased department: A department in a retail store that is rented to an

5. Vertical marketing system: A vertical marketing system is a distribution

 Independent vertical marketing system: An independent vertical