India: The Goods and Services Tax (GST) Starts To Bite
By Angus Shillington, Deputy Portfolio Manager
Back in July, India finally instituted a new system of taxes – the Goods and Services Tax (“GST”). Instead of a mish mash of duties, fees, and central and state tariffs, all goods and services have now been placed (with one or two exceptions) in one of five different tax brackets. Each product is now subject to a single tax rate across the country.
With the change in tax system, the viability of operating in the “informal” economy and, in particular, on a cash basis, has decreased commensurately. Consequently, “legitimate” and evermore “digital” smaller companies have benefitted from increased market share as competitors have just closed up shop.
MVIS India Small-Cap Index vs. MVIS India Index Growth
12/31/16 - 12/31/17
Source: MV Index Solutions
About the Author:
Angus Shillington is a Deputy Portfolio Manager at VanEck. Prior to joining VanEck, headed International Equity for ABN AMRO; responsible for Asian and European equity cash and derivative distribution to North American institutions.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.