Skip to main content

GST to hit GSK Consumer's global growth

GST to hit GSK Consumer's global growth
UK healthcare company GlaxoSmithKline Consumer's growth globally could ease in 2018 due to the impact of India's Goods & Services Tax, the pruning of its product offerings and competitive pressure.
"In 2018, we continue to expect low single-digit growth from consumer after factoring in the impact of tail brand divestments, the impact of GST in India, and the TDS generic (competitive pressures in the US), which in aggregate are expected to reduce growth by about 1.5% points on a reported basis," GSK global chief financial officer Simon Dingemans said on an earnings call over the weekend.
He added that the company remains confident in the long-term profile of the consumer business. GSK products sold in India include Boost, Horlicks, Crocin and Iodex. India rolled out its biggest tax reform — a unified tax regime under GST — on July 1. Its introduction initially disrupted supplies and companies reported a slowdown in sales as distributors and wholesalers cleared stocks during the transition period. Some wholesalers took time to upgrade systems to become GST-compliant.
India is GSK ConsumerBSE 0.12 %'s second-largest market globally, after the US. The UK company reported a 3% sales increase to over Rs 30 billion for 2017, with a 5% profit growth across its pharmaceuticals, consumer and vaccine businesses, which it attributed to group's operating margin accretion, improved earnings and cash flows.
"Consumer delivered low single-digit growth despite headwinds. Q4 saw better consumption than we'd expected in some of our key markets. The international region also benefited from comparison to a weak fourth quarter last year, which was impacted by demonetisation in India," Dingemans said. Demonetisation, or the note ban in November 2016, led to crippling of cash flow across channels.
GSK CEO Emma Walmsley said that for its consumer healthcare business, the company's sales momentum improved throughout the year with strong performances in wellness and oral health "offsetting the impact of a weak US season and competitive pressures in allergy, as well as divestments and the implementation of GST in India."
The Economic Times, New Delhi, 12th February 2018

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit