Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

GST implementation difficulties after Demonetisation
Mon, 5 Dec Pre-Open

Amit Mitra, finance minister of West Bengal and the chairman of the empowered committee of state finance ministers, says it's not the right time to implement goods and services tax (GST), claiming India's federal structure may not be prepared for the 'double whammy' of demonetisation and GST.

Similarly, forecasts about the adverse impact of demonetisation on the economy have weakened the resolve of the government to push the GST related Bills in the ongoing winter session of Parliament.

Though the government has the option of skirting the opposition by getting the GST laws passed as money Bills, but that will also not be of much help. This is because the states then will ensure, that they don't get the required support from the assemblies, which is a must for the take-off of the GST.

Similarly, there are voices within the government as well advising discretion on GST roll-out by 1 April 2017. They have argued the new tax regime could prove to be a double whammy for trade, which is already looking at a slump in the near term because of the currency purge.

Think about this for a moment.

Companies are already facing pressure, especially in rural areas owing to severe cash crunch. Even in cities, people are rationing their money and postponing their purchases. This will certainly impact companies' growth and profitability over the next quarter or two. And just when dust of demonetisation settles, we have another challenge - the implementation of GST. The disruption and discontinuity would continue till the time the companies, distributors, suppliers, and other players in the value chain adjust.

Besides the inherent logistical and procedural difficulties in the already tight race against time to implement GST before 1 April 2017, there are more valid political and economic reasons for the government to go slow with the bill.

The impact of both these issues would be cascading and lasting for some time. It is no rocket science to understand that year one and year two of GST implementation would bring its own upheavals before the system settles and popular goods begin to percolate.

'One nation, one tax' was hailed as the single biggest economic reform bill since long time. But then a demonetisation of this magnitude had not happened in India before either and was bound to take its toll. While the actual gains/losses from demonetisation will take time to manifest, the GST seems to be its first casualty.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "GST implementation difficulties after Demonetisation". Click here!

  

Views on News

ITI Mid-Cap Fund: Investing in Potential Midcap Companies for Growth (Outside View)

Feb 26, 2021

PersonalFN analyses the features of ITI Mid-Cap Fund and explains the potential this fund has to offer to its investors.

NSE Glitch: Why Did the Market Go Up? (Fast Profits Daily)

Feb 26, 2021

In today's video, I'll discuss why thew stock market went up on Wednesday, 24 February 2021, when the NSE had to shut trading due to a technical glitch.

My Personal Checklist for Your Trading Success (Profit Hunter)

Feb 26, 2021

You my personal trading checklist and you will be well on your way to making it big as a trader.

Make Rs 5,000 Per Day Trading the Market (Fast Profits Daily)

Feb 25, 2021

In this video, I'll show you how to get started on the path to daily trading profits.

Refresh Your Investment Portfolio in 2021 to Align with Your Financial Goals (Outside View)

Feb 25, 2021

Timely review of your investment portfolio is the key, to enable stable returns and work towards your envisioned financial goals during various market phases.

More Views on News

Most Popular

It's the Beginning of a New Bull Phase in Smallcaps (Profit Hunter)

Feb 24, 2021

Last time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.

Intraday Trading for a Living (Fast Profits Daily)

Feb 15, 2021

In this video, I'll cover your queries on intraday trading and also share my view on how to decide stop losses and target prices.

Top 5 Stocks Mutual Funds Bought and Sold in January 2021 (Sector Info)

Feb 16, 2021

A look at what India's top equity mutual funds bought and sold in January 2021.

I Would Recommend this Small-cap Stock Over Tesla (Profit Hunter)

Feb 16, 2021

Do you enjoy reading Tesla and Bitcoin stories? Here's a not so famous small-cap stock to profit from the rise of EVs.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Feb 26, 2021 (Close)

MARKET STATS