Uploaded by IAEME PUBLICATION

GST IMPLICATION ON SALES OF AUTOMOBILE INDUSTRY WITH REFERENCE TO TATA MOTORS

advertisement
International Journal of Mechanical Engineering and Technology (IJMET)
Volume 10, Issue 01, January 2019, pp. 1565–1570, Article ID: IJMET_10_01_159
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=1
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
© IAEME Publication
Scopus Indexed
GST IMPLICATION ON SALES OF
AUTOMOBILE INDUSTRY WITH REFERENCE
TO TATA MOTORS
Charumathi S
M.Com IV Semester, Department of Management and Commerce,
Amrita School of Arts and Sciences Mysuru,
Amrita Vishwa Vidyapeetham, India
Dr. Rampilla Mahesh
Assistant Professor, Department of Management and Commerce,
Amrita School of Arts and Sciences Mysuru,
Amrita Vishwa Vidyapeetham, India
Dr. Ranjith Kumar S
Assistant Professor, Department of Management and Commerce,
Amrita School of Arts and Sciences Mysuru,
Amrita Vishwa Vidyapeetham, India
ABSTRACT
In this present generation, individuals are highly sophisticated in their life
standard as it is directly determined by their individuals and family income. Pool of
earnings in a family take them to next level life style. Copy and comparison are the
two important C’s which influence the individuals to lead their life in comfort t zone.
In the last two decades people are totally isolating to prefer public transport. Heavy
traffic penetrates the individuals to frustrate, in turn it leads to attract to buy their
own vehicles. A competitive corporate culture encourages them by launching new
modern two and four wheeler with different amenities at competitive price. Financial
institutions are also supporting them to buy vehicles at easiest instalments. At last,
these proportionately increase more automobile products. These automobile
industries directly contribute the GDP to our nation. The recent GST also encourages
the buying habit of automobile products. These positive tax regime definitely develop
the automobile sector to the reasonable extent. This research paper has made an
attempt to undergo the tax implications of automobile products with reference to
TATA motors. The study conducted based on the reliable facts from the company site
and financial reports for the period for 4 years from 2014 to 2018. Observation
method also applied to perceive the users, retailers and Dealers preference about the
GST implement about automobile sector.
Keywords: GST, TATA Motors and Automobile Industry
http://www.iaeme.com/IJMET/index.asp
1565
[email protected]
Charumathi S, Dr. Rampilla Mahesh, Dr. Ranjith Kumar S
Cite this Article: Charumathi S, Dr. Rampilla Mahesh, Dr. Ranjith Kumar S, GST
Implication on Sales of Automobile Industry with Reference to Tata Motors,
International Journal of Mechanical Engineering and Technology 10(1), 2019, pp.
1565–1570.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=1
1. INTRODUCTION
GST was first implemented on July 1, 2016.Subsequently, There has been adequate effect on
the performance of a company. Forecast of Turnover determine the growth of an organisation.
These recent GST have faced hollow on company’s sale of the passenger’s vehicles, at the
starting 9% was lower compared to year of 2016 and reason for this is decline in starting
stages was uncertain prevailing on GST system but the company believes that decline of
volume is temporary in future as it is a direct benefit of GST also there it will be recovered
soon. They also mention that implement of GST will be promoted for the consumer but
present condition for Tata motors is in the year of 2018 domestic sale has grown up to 54%
.In June 2018, increased in volume of sales when paralleled with last year.
2 STATEMENT OF THE PROBLEM
The tax is aptness for the revenue authorities to have the tax collected through the agencies of
the manufactures or merchants who are used as “unofficial tax collectors”. There is no direct
assembly between tax payers and revenue authority and taxes so collected maybe termed as
indirect tax EG: GST.
The most applied and suitable way to differentiate between direct and indirect tax which
is in conformism with generally accepted view of direct and indirect tax that is levied
immediately on conception of individuals may be called indirect taxes. Present study focus
the GST impact on automobile spare parts with references to the total turnover of TATA
MOTORS with aim to analysis the above mentioned research problem , the following of
hypotheses and objective have been formulated.
3. PROFILE OF THE COMPANY
Tata engineering and locomotive or Tata motors ltd is an Indian multinational manufacturing
company was started in the year 1868. It is the public company and conglomerate industry. .
The founder of the company is Jamsetji Tata. The services are provided globally. Tata motors
headquarters is positioned in Mumbai. Tata motors contain passenger cars, trucks, Vans,
busses, sporting car, construction equipment’s and military vehicles. The Tata motors plants
are located in the following places: Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and
Pune in India as well as in Argentina, South Africa, great Britan and Thailand.
Tata motors are registered on Bombay stock exchange where it is constituent of BSE
Sensex index. The company is ranked 226th on the treasure world-wide 500 list of the world’s
biggest corporations as of 2016. On 17Th January 2017, Natarajan chandrasekaran was
appointed as chairman of the company Tata group. In the year 2018 the revenue of Tata
motors is US $100.4 billion and the total assets in the year 2018 is US $135 billion. The
number of employees is around 700000 and the website for the company is www.tata.com.
4. REVIEW OF LITERATURE

Akshara Mahesh and Karthika K(2018) in her article “ Impact of GST on Automobile Industry
in India” This study entitles that decrease in rate of tax in luxury car it may rise in sales but
not in case of small cars. it might have positive influence after certain period of time
http://www.iaeme.com/IJMET/index.asp
1566
[email protected]
GST Implication on Sales of Automobile Industry with Reference to Tata Motors
government have invigorated financial budget there is more chances in future for growth in
automobile industry

Neelavathi.K has expressed in her study “Impact of GST on Automobile Industry” The
accomplishment of GST changes from the origin public to the ingesting it could improve the
GDP progress that could push attention for vehicle crosswise over classes .This will effect the
duty dwindling will outflow that may reduce in general cost of auto creating as all valuations
on input paid are counter stable with the yield obligation of GST

Tarunika on (June 6 2017) in his study “IMPACT OF GST ON REAL ESTATE AND
AUTOMOBILES SECTOR “The article delivers a inclusive opinion on the impact of GST on
the real estate and automobile sector It helps accepted easily it helps in Sympathetic of GST
would help policy makers gain superior public acceptance and consequently easier to travel
from the old taxation system. In the future, this study helps to comprehend effect of GST and
other sectors to the economy

Dhyan Vishnu prajwal N (November 11 2017) on his study “Impact of GST Implementation
on Share Prices - A Study on Automobile Industry” This study tells about the automobile
sector in India has facilitated from the introduction of the GST. The tax rates have abridged
and the shares have been traded at an higher rate after the application of GST with increased
returns. Thus GST for automobile industry is a win-win condition for both the Shareholders
and the manufacturers.

Milandeep kour (November 2 2016) in his study of “A STUDY ON IMPACT OF GST
AFTER ITS IMPLEMENTATION” In this study there will be one tax system i.e. GST, that
will reduce obedience present load. GST will face many challenges after its implementation
and will result to give many benefits. In general through this study we accomplish that GST
play a active role in the growth and development of our country

Dr Krishna banana (January of1 2018) in his study “ AN ANALYSIS OF GST IMPACT ON
MOTORBIKE INDUSTRY IN INDIA” The Government of India has envisioned to effect of
GST to the Collecting segment in India. The goal of this exploration is the effect of GST on
Automobile and bike parts in India. 'Make in India' cause of the Government of India is
furthermore going to appeal in more distant risk into Indian bike share making further
development early stages in the coming years.

Roshan Roy (may 2 2017) in his study “Project report on implications of Goods and Service
Tax (GST) on Automobile Industry of India” Automobile manufacturing is Seeing forward to
outline of GST. There are fairly a few apprehensions in GST model which need to be lectured.
Limitations and conditions on earnestness to tax credits on assets used for business is also a
foremost area of concern, and the credit mechanism should be more liberal. Overall GST will
be benediction for automobile industry.
5. OBJECTIVE OF THE STUDY
To compare Pre and Post implementing GST impact on the sale of TATA motors.
6. HYPOTHESIS OF THE STUDY
H0: There is no positive significant impact of GST on sale of TATA motors.
H1: there is a negative significant impact of GST on sale of TATA Motors.
7. METHODOLOGY
The study is collected based on secondary data from the published reports like Company
website, journals and related literatures from the relevant study. Secondary data collected has
been the fundamental source of gaining knowledge related to the topic which enabled as to
approach the research problem.
http://www.iaeme.com/IJMET/index.asp
1567
[email protected]
Charumathi S, Dr. Rampilla Mahesh, Dr. Ranjith Kumar S
8. STATISTICAL TOOLS USED

Trend percentage analysis.

T test
9. ANALYSIS OF THE STUDY
Table 1
ONE SAMPLE STASTICS
MEAN
STD.DEVIATION
N
SALES OF
COMMERICAL
VEHICEL
SALES OF
PASSANGER
VEHICLE
SALES OF
EXPORT
STD.ERROR MEAN
5
32185.20
9115.757
4076.691
5
13330.20
4394.797
1965.413
5
4554.20
633.197
283.174
Table 2
T
ONE SAMPLE TEST
t-test for Equality of mean
DF SIG(2MEAN
95% CONFIDENCE
TAILED) DIFFERE
INTERVAL OF THE DIFFERENCE
LOWER
UPPER
NCE
4
.478
3185.600
-8133.11
1450431
Sales of
.781
commercial
vehicle
Sale of
1.186
4
passenger
vehicle
Sales of
.898
4
export
[source: Secondary data]
.301
2330.200
-3126.66
7787.06
.420
254.200
-532.02
1040.42
The study was conducted on the basis of “one-tailed” t- test used by considering number
of units sold for commercial vehicle, sales of passenger vehicle and sales of export with
respect of TATA MOTORS during the study period 2016-2018. Here, the objective of the
study is proven through hypothesis testing
Based on data, conducted a hypothesis testing (with 0.05 significance level)
Sales of commercial vehicle: Hence calculated value is .478 less than table value 0.781
therefore selected hypothesis is accepted so, there is positive significant impact of GST on
sale of TATA motors.
Sales of passenger vehicle: Hence calculated value is .301 less than table value 1.186
therefore selected hypothesis is accepted so, there is positive significant impact of GST on
sale of TATA motors.
Sales of export: Hence calculated value is .420 less than table value 0.898 therefore
selected hypothesis is accepted so, there is positive significant impact of GST on sale of
TATA motors.
http://www.iaeme.com/IJMET/index.asp
1568
[email protected]
GST Implication on Sales of Automobile Industry with Reference to Tata Motors
Table 3
TREND PERCENTAGE
ITEM
Total sales
Sales on
commercial
vehicle
Sales on passenger
vehicle
Export sales
2014
2015
2016
QUANTITY IN FIGURES
41734
39972
40944
27347
25736
24998
2017
2018
2014-2015 2015-2016 2016-2017 2017-2018
TREND PERCENTAGE
-4.22
2.42
52.48
19.56
-5.8
2.8
6.1
25.8
54627
40447
64520
46169
12040
8069
1082
14180
18429
-32.9
34.18
30.96
6.6
3958
4557
5119
6044
5250
15
12.3
26
35

Total sales: in the year 2014 the total sales of the company is around 41734 but in the year
2015 it decreases to 39972 and from 2016 -2018 the total sales of the company gradually
increases when GST is implemented.

Sales of commercial vehicle: before implementing GST there is an average sale in commercial
vehicle but after implementing GST the sales of commercial vehicle increases and in the year
2018 it has put up to 25.8%.

Sales on passenger vehicle: after implementing GST sales of passenger vehicle also gradually
increases.

Export sales: After implementing GST, in the year of 2016 the exports sales is 5119 but in the
end of 2018 the sales has been put down to 35%.
10. FINDINGS

After implementing GST the overall sales of TATA MOTORS gradually increases

After implementing GST sales of passenger vehicle also increases.

Implementation of GST has positively supported the consumers of TATA MOTORS.

Before implementing GST there is an average sale in commercial vehicle but after
implementing GST the sales of commercial vehicle increases and in the year 2018 it has put
up to 25.8%.
12. CONCLUSIONS
At the outset, the research highlighted the impact of the New tax regime recently introduced
in the name of GST which directly influence the core industries particularly Automobile
sector. There is a huge continuous demand in automobile products. High rate competency
between service providers in the Automobile products directly is being influenced the users of
the product. GST positively support the organisations in low proportion, but there is a drastic
drastic growth in Automobile industry. But, automobile products are inevitable in the life of
individuals and organisations’ routine life. Due to continuous demand of the products, the
sector has not been drastically affected. In spite of this value argument, there is a threat from
world market due to LPG policy. After a while, there would be proportion negative effect
impact will increase. Therefore, the state authorities want to take serious policy decisions to
map with the possible GST reduction in the existing rate to support the companies. Such,
radical changes in the system will boost the sector as well as performers like TATA motors to
face the tax implications in the growth of company.
http://www.iaeme.com/IJMET/index.asp
1569
[email protected]
Charumathi S, Dr. Rampilla Mahesh, Dr. Ranjith Kumar S
REFERENCES
[1]
Akshara Mahesh and Karthika K(2018) Impact of GST on Automobile Industry in India
IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN:
2319-7668 PP 01-03
[2]
K.Neelavathi and Rachana Sharma (2018) Impact of GST on Automobile Industry IOSR
Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 23197668 PP 59-63
[3]
Tarunika jain agrawal & c.a. Aashna goyal (2017) impact of gst on real estate and
automobiles sector impact: International Journal of Research in Business Management
(IMPACT: IJRBM) ISSN(P): 2347-4572; ISSN(E): 2321-886X Vol. 5, Issue 6, Jun 2017,
115-120
[4]
Dhyan Vishnu Prajwal N and Shivi Khanna (2017) Impact of GST Implementation on
Share Prices - A Study on Automobile Industry International Journal of Engineering
Technology Science and Research IJETSR www.ijetsr.com ISSN 2394 – 3386 Volume 4,
Issue 11 November 2017
[5]
Milandeep Kour, Kajal Chaudhary, Surjan Singh and Baljinder Kaur (2016) A Study On
Impact Of GST After Its Implementation International Journal of Innovative Studies in
Sociology and Humanities (IJISSH) Volume: 1 Issue: 2 | November 2016 www.ijissh.org
[6]
Dr. Krishna Banana, Swarna Balakrishna and Dr. Meeravali Shaik (2018) AN
ANALYSIS OF GST IMPACT ON MOTORBIKE INDUSTRY IN INDIA International
Journal of Marketing & Financial Management, Volume 6, Issue 1, Jan -2018, pp 23-31
ISSN: 2348 -3954 (Online) ISSN: 2349 - 2546 (Print)
[7]
Pavithra. R, Dr. Ranjith Kumar S, Gst Impact on Cement Price. “Evidence from Selected
Constructions Rivate Limited in Mysuru City”, International Journal of Civil Engineering
and Technology, 9(11), 2018, pp. 641–646
http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=9&IType=11
[8]
Aswathy Ashok and Dr. Ranjith Kumar S, A Study on Impact of Gst on Miscellaneous
Industry; Gold, International Journal of Mechanical Engineering and Technology, 9(11),
2018, pp. 608–613.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=9&IType=11
[9]
Mamatha. D and Dr. Ranjith Kumar S, A Study on Prospects and Problems of Employees
of Selected Manufacturing Companies with Special Reference to Health Insurance,
International Journal of Mechanical Engineering and Technology, 9(11), 2018, pp. 842–
847. http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=9&IType=11
[10]
Ranjitha.N and Dr. Ranjith Kumar S, GST Impact Onwomen Health Products “Evidence
From Selected Healthcare Industries In Mysuru City” International Journal of Mechanical
Engineering and Technology, 9(11), 2018, pp. 747-751.
http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=9&IType=12
[11]
https://www.tatamotors.com
[12]
https://auto.economictimes,indiatimes.com
[13]
https://www.tatamotors.com./press/tata-motors
[14]
www.tata.com
http://www.iaeme.com/IJMET/index.asp
1570
[email protected]