|
Companies in India will ramp up manufacturing of consumer goods following the Government's GST (Goods and Services Tax) 2.0 reforms, a move executives say will drive both manufacturing and sales-led employment across the country.
"Organisations will increase manufacturing of these products, and this will directly lead to both manufacturing- as well as sales-led employment in the country," said Lohit Bhatia, President - Workforce Management, Quess Corp. Explaining the potential impact of the indirect tax rate rationalisation, Quess Corp's Bhatia said the government has effectively targeted the food and consumption basket of Indian consumers--at a time when domestic demand had been subdued due to high interest rates in recent years, an unusually mild summer, and severe flooding. The sweeping changes have been made under the next-generation GST (Goods and Services Tax) rationalisation just days after Prime Minister Narendra Modi announced it from the ramparts of the Red Fort on Independence Day. This is aimed at reducing the tax burden on citizens while stimulating economic growth. On the essential items front, items of daily household use will now cost less. Products such as hair oil, shampoo, toothpaste, toilet soap bars, toothbrushes, and shaving cream, which earlier attracted 18 per cent GST, will now fall under the 5 per cent bracket. Similarly, butter, ghee, cheese, dairy spreads, pre-packaged namkeens, bhujiya, and mixtures have all seen their GST rate reduced from 12 per cent to 5 per cent. Utensils, feeding bottles, baby napkins, and clinical diapers have also become cheaper with the rate cut to 5 per cent. Sparsh Sachar, FMCG and Business Head, Nutrica, BN Group, said, "Over time, such measures will not only stimulate domestic manufacturing but also reduce India's dependence on imports, paving the way for greater self-sufficiency." "The new dual-rate structure of 5 per cent and 18 per cent with a 40 per cent rate on sin and luxury goods aims to resolve these issues by simplifying classifications, correcting duty inversions, and reducing litigation risks," said Rishi Agrawal Ceo and Co founder of Teamlease Regtech. He added that India's previous GST framework, characterised by multiple slabs, frequent rate changes, inverted duty structures and overlapping cesses, created challenges for businesses. Companies faced complex classifications, blocked input tax credits, frequent regulatory requirements and recurring disputes with tax authorities, Agrawal added. Analysing the announcement, Swapnil Aggarwal, Director, VSRK Capital said The removal of GST on insurance premiums is a landmark decision and a true boon for Indian households. "Coupled with slab consolidation and lower rates on mass consumption categories, GST 2.0 strengthens household balance sheets while unlocking discretionary spending," he added. (ANI)
|
