GST will test investors' patience

Markets will not be happy if GST implementation remains an issue

The textile industry in Surat went on strike as the goods and services tax (GST) was implemented. So did the fireworks and match industry in Sivakasi. Both have strong connects to the informal economy and both will lack offsets for the unorganised elements in their respective value chains.  The tax incidence for these will rise with GST.

Any business which has a large number of unorganised inputs will see a rise in tax incidence. The business must pay out for GST, without corresponding offsets for the informal parts of the chain. The service sector will be affected by this issue, as