Impact of Gst on Fmcg Sector

regards to CC in sales/ use tax area. Here there might have been DP rationale, but no

Having a value-added tax has many different views, but many cons are shown through the system. With having a value-added tax means the tax on the amount of an item goes up based on its production or distribution. Value-added tax being implemented would clear out many peoples savings. It also would be a struggle on the lower classes, and has been called an “unfair regressive tax”.

Therefore the purchasing department will be able to reduce the cost to more efficient and effective process and it will be able to deliver better process.

First, receipients of goods already pay sales taxes on those goods, thus by raising income tax for the argument of goods received, the government would unfairly double tax consumers. Moreover, their product is merely one

1b. How does a tax on a good affect the price paid by buyers and the price of received by sellers?

excise taxes1. There has been recent interest in increasing the “sin tax” for products such as

Sales Tax: Not sure what this is. I did not find any reference on the functional summary document.

The advantages of a centralized warehouse is higher service levels and lower inventory holding costs due to aggregating customer demand and pooling risk. That is, if customer demand is high in one region and lower in another, there will be no need to hold excess inventory in a regional warehouse; the variation in demand will balance out and reduce the requirements for excess inventory. Additionally, the fixed costs of maintaining one central warehouse/distribution center will be lower than five regional warehouses.

deductions allowed by Chapter 1 of the Code which are directly connected with the production of gross income,

An Economic Reforms Priority research report issued by the Grattan Institute dissects the possible benefits of tinkering with GST. It calculates that the GST-exempt goods and services equate to about 40 per cent of consumer spending, which means the government gives up about $30 billion a year in revenue. The institute recommends the GST be applied to all of these exempt goods, thus the additional revenue could fund substantial income and corporate tax cuts that would increase economic growth. This would raise an extra $31 billion a year in revenue and add $20 billion a year to the economy or an extra $870 a year income for everyone. The tax system would be far simpler for the Australian people.

There are quite a few forms of tariffs that the government may apply based on the condition of the country’s economic welfare. The pros and cons of these forms of tariffs will be reviewed. Discussion on how these tariffs positively or negatively affects the economic stance of the country will be displayed. Tariffs such as the ad valorem, the taxing a percentage of the value of an item and the specific tariff or tax which is a set amount based on weight or sum of items. (McEachern, 2015)

The businesses among the process of production, collect the taxes from the products they sold and it is then given to the government. Therefore, it is a general consumption tax because the tax ultimately falls on the final consumer. VAT is also referred as an indirect tax because it is collected by the government from the seller (the businesses) and not the final consumer who pays the tax. This process of adding a tax in each stage of production differentiates itself from a sales tax (Anastakis, N.D.). Dimitry Anastakis, demonstrated this difference where he gives the following example, “if a sales tax of 10 percent is applied to a desk worth $1,000, then the end customer buying the desk from a desk retailer would pay $100 in sales tax and $1,000 to the desk retailer” (N.D.). Therefore, all others involved in each step of production of the desk would pay no tax only the consumer. Further, Anastakis states, “If a VAT of 10 percent is applied to the same desk, the end customer will pay $100 in VAT. If the desk builder has purchased wood and supplies for the desk totaling $400, he/she is thus assessing $600 of value that he/she has added in creating the desk. The desk builder would pay the 10 percent VAT of $40 on the supplies. When he/she remits payment of the VAT to the government, he/ she will remit the total VAT assessed on the end value of the desk ($100) minus what he/she has already paid ($40), to total $60 based on the added value” (N.D.).

Taxation policy.For example, because of taxation policy since last year’s Industry Report the full rate of duty has risen by 17.8%. Marginal benefits from the reduction to 15% have less than a year to run, when the possible return to 17.5% will leave the industry with the permanent “bonus” of the 8% duty hike imposed in November 2008.

One of the most evident and thought provoking aspects that we see as consumers on a daily basis is the effect of sales tax. The effect of sales tax vary from the examination of how much this tax can increase our purchases. To why there are higher and lower tax percentages based on different purchases. Knowing that this tax is in place determines the actions of both sellers and consumers. With sales tax continuing to evolve and change certain bills such as the Remote Transaction Parity Act of 2015 have been put into place and action.

meant that imported product were subject to import taxes (22%) and it also involved a