Impact of GST on maufacturing sector?

Therefore, due to above reason, there will be a significant change in the accounting procedure and presentation. To be abreast with the changes read further.

The manufacturing sector is about transforming materials into goods using machinery or other Capital goods. Indian manufacturing sector covers a small portion of the world manufacturing Industry. It is evident that the Indian manufacturing sector is at a low growth at present. Various factors increase threats to a new entrant in manufacturing Industry with the fear of shallow margins. Indian legacy provides little space for the easy expansion of the firm. There is an inefficient methodology behind the production, planning, supply chain management, quality control. Indian local infrastructure lags behind global peers in terms of transformation, power and road facilities. There is a rising employment shift towards the manufacturing sector as the youth is joining labour empowerment in a huge number annually but unfortunately, there is a considerable constant failure to create job for such mass.

The growth of the manufacturing sector is also critical for ensuring a balanced Trade. It is widely visible that India has been importing large volumes of manufactured goods as its own very economy fails to meet the market demand.Among the manufacturing products, the top five products are food, basic metal, rubber and petrochemicals, chemicals and electrical machinery.

Excise Duty-

The government of India levy an indirect tax on manufactured goods in India, which is Excise Duty. Such goods have been specified in the Central Excise Tariff Act as subjected to tax. it can be categorised as:

• Central Excise
• Additional excise duty
• Special excise duty

Vat and Cst -

VAT is a multi-point tax on value addition which is collected at different stages of the sale. VAT is applicable to intrastate sales. CST is same as VAT and is applicable for Inter-state sales only.

As the new government has proposed the implementation of GST, Impact on manufacturing sector will be seen giving a push to the economy.

GST will reduce the cost of procurement/production of goods. It will break the cascade of tax at all the stages and there will be no retention/disallowance on the stock transfer of goods.

GST will bring Central/Union tax credit availability which may lead to the removal of an extra level of warehousing or supply chain.

GST will make India an even and seamless market, the current area based exemptions and hikes will become irrelevant.GST will make a hassle free transportation system. Supply of goods from one part to another will then occur in less transit time. Availability of right material at the right place in right time would be achieved.