Tuesday, 11 July 2017

GST: Impact on Share Market

Any change in government policy creates an effect on the Indian share market as well. Global market and business sector are also affected. The newly introduced bill- GST has replaced the taxes such as VAT, service tax, excise duty, customs duty and other indirect taxes. GST is an indirect tax levied by central and state government that was launched at July 1, 2017. GST has levied on every transaction like purchase, sale, transfer, and import of any goods and services.

Effect on share market trading

The GST rate on financial services has modified from 15% to 18% with the service tax being subsumed into overall GST. The overall cost of subsuming of service tax on the brokerage of around 1% is now about 0.03% or 3 basis points. This may not be too significant from a long-term perspective of investor since the overall shift is just around 3 basis points. These 3 basis points have changed the economics of churning their funds in their funds in the share market for short-term traders. This is the time to see the actual impacts the eventual volumes and liquidity in the markets. One thing share market traders are required to look for in the share market is whether the higher cost results increases the basis risk or not. Shares of the companies such as Edelweiss Financial, Motilal Oswal Financial Services, Geojit Financial Services etc has been in limelight since the GST implementation.

GST implementations are expected to reduce the cost of logistics as the government is not taking octroi tax separately and it has reduced the cost of transportation as well. GST has improved the way of share market trading, simplified tax structure and made the supply chain more efficient and convenient. GST has also boost earning of companies like manufacturing, logistics and transportation sectors. The transportation process has also boost with the GST elimination in various checkpoints. It has the best companies facing multiple levies on transactions.

If GST bill has successfully passed in India, it is also beneficial for the share market as it is sending the positive message to the foreign investor. India represents as a better policy maker before the foreign market and then it will lead foreign investor to make an investment in the Indian share market. It will boost Indian economy along with the reputation of the Indian country.

To know more about the GST impact on the share market. Share market traders can get suggestions from one of the best share market tips providers like Money Classic. We have a team of experts who are well knowledgeable about the market conditions. We offer the best guide to the traders who want to avail the market opportunity by share market trading. Money Classic provides you share market tips based on the various market analysis so that you can earn money in share market trading.

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