On the domestic taxation front, sales tax rates differ across the various Indian states, making supply chain management a challenging task for organized retailers. Inter-state sales attracts Central Sales Tax while for some categories of products, certain states levy import duties namely entry tax on entry of goods into their territory. Simultaneously, states levy export duties where goods are moved for sale outside state border.
Sales tax evasion by small retailers to offer lower prices, fetch higher margins is also common place in local markets. In addition to state taxes, certain local authorities also levy octroi.
All these things put together cause irritation and therefore, restrict the growth of our economy. If retailing has to grow than the corrective measures will be needed to be initiated for correcting the aforesaid anomalies to lure investment in Indian retailing.
The Associated Chambers of Commerce and Industry of India
marketing@alchempro.com
