What actually is GST? How it is affecting Buyers & Sellers ?

As we all know it is Goods & Service Tax. Basically it a single tax which replaces various kinds of taxation that was there earlier like VAT (Though VAT is still there for Liquor Items ), CST, EXCISE, SERVICE TAX, etc. So ultimately it a very good thing to have theoretically but the practicality it is bit different.

It has impacted both buyer & seller but it has really impacted severely to the small traders & small eCommerce sellers in EBAY or Amazon. See my article below.

TAX SLAB

Product - 0%, 5%, 12%, 18%, 28%

Service - 18%


From Buyers Prospective,

Always no matter whatever the taxation system is the buyer has to carry the burden of it, so see below how it affect a buyer,
  • Leather Items like Bags, mobile cover, laptop bags & other leather items becomes costlier. (GST 28 % SLAB)
  • Service TAX changed from 15% to 18%, so directly or indirectly you will have to pay a lot money for that. eg, LIC Policy premium, Credit card EMI, Bank Loan Service charge etc.
  • Branded clothes, Branded items also becomes very costly, the list can go on but i guess you can understand from this example, in Amazon 3 Piece Nike Socks was available at 180 INR only but now it is 330 INR. It does not means it is directly impact of the GST but many people also want to take the advantage of it.
From Sellers Prospective,

For sellers it is a very complex mathematics & for may sellers they may have to shut their business because of it. To avoid Tax cascading Govt proposed Input Tax Credit, which seems to be the more complex then it sounds. Only an example can make you understand better.


if C is not registered with GST, Then, B becomes the first person in the chain & B has to pay 6 rupees not 1 rupees as he was paying earlier. So you might say he will hike the selling price so what is the issue, by hiking the selling price he will ultimately loose the market share, if not he will loose the business.

Now you also argue, why he will buy the items if the trader is not GST registered, well that is a valid argument, but Govt has also provided another scheme as if your turnover is less than 20 lakhs you are not required to register in GST & you are not required to pay any taxes. So C never required to register in GST.

It is a very complex thing specially for small traders & online businesses. So for sellers It arises more questions then answers.

I hope it sufficiently answers your questions, if not please post in comment or mail us at care@india-crafts.in


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Team Indiacrafts,


Location: New Delhi, Delhi, India

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