More than the "waste order" is fierce, India pushes heavy new deal, Land Rover cuts prices, home appliances are snapped up

India is the world's second-largest emerging economy after China, and in February this year, a report by PricewaterhouseCoopers said that if it is based on purchasing power parity, China is expected to become the world's largest economy by 2050, India will Beyond the United States, it has become the second largest economy in the world.

Although India has cultivated many of the world's top IT and technology talents, in fact, because of its unique national conditions, India does not feel strong in global economic activities. For example, the popularity of smartphones is not high, infrastructure is backward, and illiteracy rates are high.

In addition, economically, India's 29 state states are relatively independent individuals, and each state can customize its own tax rate for various goods, goods and services. As a result, this has caused obstacles and delays to the circulation of goods in India. For example, when a truck carrying fruits passes through various states, it must fill out various forms and pay various taxes on the borders of the state. As a result, it not only increases the burden on the merchants, but also when the fruit is shipped to the destination. Not new. Moreover, the complicated tax system has also led to serious tax evasion.

However, just yesterday (July 1), India ushered in the largest tax reform since the independence of the country in 1947. For the first time in history, this scale reached 2 trillion US dollars and the population is close to 1.3 billion. The country that dances is unified into an overall commodity market.

India officially became a unified economy

On July 1, the Indian Goods and Services Tax (GST), which aims to unify the tax system, was officially implemented. As a type of consumption tax, the Goods and Services Tax Act (hereinafter referred to as the “New Tax Law”) will tax the value added portion of each part of the circulation of goods. The “New Tax Law” aims to simplify the complicated and chaotic tax system in India, and establish a unified and simple tax exemption system at the central and local levels.

On the evening of June 30, local time to the early morning of July 1, Indian Prime Minister Modi and President Pranab Mukherjee attended the launching ceremony of the “New Tax Law” held in the Central Hall of the Indian Parliament. At the launching ceremony, Modi said in a speech: "The new tax law marks India as a unified economy. Previously, there were 500 kinds of taxes in India, and we have been working hard to get rid of this (chaotic situation), and now, the country There is only one tax system, and India has become a (unified) country."

According to the nature of the goods, the “new tax law” divides the tax rate into five levels of 0%, 5%, 12%, 18% and 28%. The basic commodity tax rate is the lowest and the luxury tax rate is the highest.

In the early morning of July 1, the “New Tax Law” was just enacted, and Kishore Biyani, owner of Big Bazaar, India's largest supermarket chain, had a shopping list on his social media. According to the documents, under the “new tax law”, the consumption tax for a soy sauce is 5%, the tax rate for a yogurt is 0%, and the tax rate for Oreo is 28%. The state government and the central government each take half of the tax. Therefore, S GST (state tax) and C GST (national tax) are shown on this receipt.

Because India's tax system was very complicated before, it is difficult to accurately calculate whether the taxes on various types of goods have increased or decreased. The Times of India outlines some changes in the tax rate of goods.

Goods with reduced tax rates include: dairy products, seasonings, food, cooking oil, fruits and vegetables; daily necessities such as toilet paper, tableware, etc.; and stationery such as notebooks and school bags; clothing, etc.

Goods with higher tax rates include: coffee, alcoholic beverages, chocolate, ice cream, gold, high-end restaurants, concert tickets, air conditioners, washing machines, TV shows, insurance, broadband, cars, smartphones, laptops, cigarettes, etc.

It can be seen from this list that the most basic daily necessities are reduced in taxes and fees, not on necessities.

According to the statistics, according to the "new tax law", 7% of the goods and services tax rate is 0%, 14% of the tax rate is 5%, 17% of the tax rate is 12%, and the 18% tax rate covers the widest range, reaching 43. % of goods and services, in addition, 19% of the merchandise tax rate reached 28%.

New tax law eve sale

In fact, the "new tax law" is not only the means of reform of the Modi government, but the result of more than 30 years of tax reform in India.

Back in the history of the “new tax law”, as early as 2000, the then Indian Prime Minister Vajpayee government agreed to discuss the Goods and Services Tax Act and formed a committee. In 1986, Manmohan Singh, then Minister of Finance and later known as "the father of economic reform in India," announced the implementation of the "VAT amendment", which is also considered the predecessor of the "new tax law."

Although many people are optimistic about the impact of India's “new tax reform,” in the short term, it may lead to some confusion.

Just one day before the implementation of the “New Tax Law” on June 30, some of India’s largest automakers and sellers announced big sales promotions.

Maruti Suzuki, the largest automaker in India, cut the price of some cars by 3%. Maruti said that under the "new tax law", the taxes on the two hybrid vehicles will increase. The prices of all Jaguar and Land Rover vehicles owned by high-end automaker Tata Motors have been lowered, with a maximum of 7%.

In addition, Big Bazaar also announced that the prices of household goods sold in stores in 26 state-owned provinces in India ranged from 2% to 22%. Flipkart, India's largest e-commerce platform, also released a "new tax law" discount.

On some items, customers get a discount of over 80%. Kumar Rajagopalan, chief executive of the Indian Retailers Association, said, “Retailers now offer more than 50% discounts, because they are eager to remove as much as possible before July 1st. In this case, consumers have flocked to the mall to buy goods, especially household appliances that are expected to increase taxes, refrigerators, TV shows, air conditioners, and other non-living necessities.

On the first day of the implementation of the “New Tax Law”, many shops closed down because of the re-establishment of commodity prices from the manufacturers to the stores, and a large number of customers were blocked outside the store. Auto marketers say they haven't got a factory-adjusted price list and are therefore unable to sell. Some car marketers told customers that prices are being adjusted. Maruti Suzuki said the company has communicated with marketers about price adjustments.

According to Bloomberg, a computer marketer said that it is now like the scene after the government’s “waste order” last year. "People are in a daze; the tax on IT products has increased, and the sales have been hit hard. People want to collect taxes at the old tax rate." In addition, protests against the "new tax law" have occurred in some parts of India.

In fact, the short-term chaos caused by the “new tax law” is within expectations. According to the experience of other countries, the first implementation of the national unified consumption tax will lead to an increase in consumer prices in the short term, but in the long run, prices will fall.

On the macro level, the International Monetary Fund predicts that the “new tax law” will help India's GDP growth rate return to more than 8%, and received the “waste order”, India's GDP growth rate fell to 6.1 in the first quarter of this year. %. In addition, the Oxford Economics Institute predicts that in the next 15 years, the "new tax reform" will increase India's GDP growth rate by 0.6% per year.

Every edited by Wang Jiaqi