New goods tax slows Indian cosmetics trading

By Raghavendra Verma 19-Sep-2017

The new Indian GST system is depressing personal care products trade, as Raghavendra Verma reports

Cosmetics and personal care product trade in India has slowed dramatically following the adoption of a national Goods and Services Tax (GST) on 1 July. GST replaced a wide range of other central and state government sales taxes with a streamlined value added tax system, designed to rationalise the operation and location of warehouses, hastening the transport of goods.

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However, because it insists on the transparent online logging of GST returns, many Indian businesses despise GST as it has also minimised tax evasion, which is rampant in Indian retail. This reality, coupled with initial confusion over applicable tax rates and teething troubles associated with using a new system, is deterring wholesale traders from raising new invoices. “Everything is frozen,” Sanjay Sharma, owner of Herbal Cosmetics Consultants, in New Delhi, told Cosmetics Business. “[Traders] don’t wish to pay a single penny in tax.” According to him, trading of cosmetics and personal care product goods within India in July was ...

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