What will be the impact of GST on the stock market

Posted by Ayesha Jaiswal on June 28th, 2017

Any changes in government policy create an effect on the Indian economy as well. It affects global market and business sector also. Our government initiated a bill called GST, taxes such as VAT, excise duty, octroi tax, service tax and other indirect tax will be replaced by a single tax which is GST.


Let's take a short overview what is GST -

GST- full form is Goods and Service Tax which is scheduled to launch in July 2017. It is an indirect tax levied by central and state government. GST will be levied on every transaction such as sale, purchase, transfer and import of any goods and services. It will replace all other indirect tax such as VAT, service tax and excise duty etc.It is a value addition tax, It will be levied on the taxable amount of transaction.


To know more about how it will effect on the stock market, traders can get suggestions from stock tips experts, they have better knowledge about market conditions and they can provide the best guidance to people interested in share market.



What is the benefit of GST

1.GST will improve the way of doing business in India because various entry barriers will eliminate after GST bill. This new system will also improve the revenue of central and state government of India.


2.It will remove corruption from the country as everyone has to pay a specific taxable amount while doing a transaction of any goods and service.


3.It will remove paper burden because all system will go to convert digital. It will also improve work efficiency and performance of people.


4.It will bring uniformity as tax rate will be same in everywhere. It will provide a single identity to Indian country.


5.It will simplify the process of levying tax because the previous tax will be replaced by GST.


Disadvantages -

1. It will increase prices because of higher interest rates.Expected interest rate is 5%, 12%, 18% and 28%.


2.The Higher tax burden on small manufacture unit, under GST manufacturer having turnover more than 20 Lakh will have to pay tax.


3.Change in tax calculation structure - Initially, we will have to face the struggle in calculating GST as all process will change after implementation.


4. It will increase operating cost for business as new Gst system requires professional assistance.It will affect to small traders.



Effect on the stock market

Implementations of GST is expected to reduce the cost of logistics as govt will not take octroi tax separately it will reduce the cost of transportation as well. GST will improve the way of trading in stock market, it will simplify tax structure and make the supply chain more efficient and convenient.GST will boost earning of companies logistic, manufacturing and transportation sectors. It will boost transportation process as GST eliminate various checkpoints. It is best of companies facing multiple levies on transactions.


If GST bill passed in India successfully, it will be beneficial for the stock market as it will send a positive message to the foreign investor. Our country will represent as a better policy maker in front of the foreign market, and then it will lead foreign investor to make an investment in the Indian stock market. It will boost our economy as well as the reputation of the Indian country.

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Ayesha Jaiswal

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Ayesha Jaiswal
Joined: May 20th, 2017
Articles Posted: 39

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