Business Studies: Class 11 — Chapter 10: Internal Trade

Buying and selling of goods and services within the boundaries of a nation is referred to as Internal Trade. No custom or import duties are levied on such trade as the goods are part of domestic production and meant for domestic consumption. Payment is generally made in the legal tender of the country.

• Wholesale Trade: Purchase and sale of goods in large quantities for resale or intermediate use.
• Retail Trade: Purchase and sale of goods in relatively small quantities directly to the ultimate consumers.

• Facilitating large-scale production: Wholesalers collect small orders from various retailers and place bulk orders with manufacturers.
• Bearing risk: They deal in goods in their own name, store them in warehouses, and bear risks like price fall, theft, and spoilage.
• Financial assistance: They make cash payments and sometimes advance money to manufacturers for bulk orders.
• Expert advice: They provide market information regarding customer preferences, tastes, and competitive activities.
• Storage: They store finished goods in their own godowns, reducing the storage burden on manufacturers.

• Availability of goods: They maintain adequate stocks of varied commodities, making them readily available to retailers.
• Marketing support: They perform promotional activities and advertising, which helps increase retail demand.
• Grant of credit: They extend credit facilities to regular retail customers, reducing their working capital requirements.
• Risk sharing: By selling in smaller quantities, they save retailers from holding large inventories and bearing associated risks.

• Help in distribution: Retailers make goods available to consumers scattered over wide geographical areas.
• Personal selling: They relieve producers of personal selling efforts and help actualise final sales.
• Collecting market information: Being in direct contact with buyers, they gather valuable feedback on consumer tastes and preferences.
• Help in promotion: They participate in promotional activities like window displays, coupons, and free gifts.

• Regular availability: They maintain a continuous supply of various products for consumers.
• Convenience in buying: Typically located near residential areas and open for long hours.
• Wide selection: They stock products from different manufacturers, allowing consumers to choose.
• After-sales services: Providing home delivery, spare parts, and customer support.

Itinerant Retailers do not have a fixed place of business and move from place to place to find customers.

• Peddlers and Hawkers: Carry low-value goods on bicycles, handcarts, or heads directly to consumers' doorsteps.
• Market Traders: Open temporary shops on fixed days or dates (e.g., weekly markets) in specific localities.
• Street Traders (Pavement Vendors): Positioned at busy public places like bus stands or railway stations to sell common consumer items.
• Cheap Jacks: Run temporary independent shops in business localities, changing locations based on area potential.

• General Stores: Stock a variety of daily-use items (groceries, toiletries) and are located in residential areas.
• Speciality Shops: Specialise in a specific line of products (e.g., children's garments, ladies' shoes).
• Street Stall Holders: Small stalls at street crossings dealing in cheap, high-turnover goods.
• Second-hand Goods Shops: Deal in used items like books, furniture, and clothes at lower prices.

Large-scale retail establishments that stock a massive volume and variety of goods.

• Departmental Stores: Large establishments offering a wide variety of products classified into well-defined departments under one roof.
• Chain Stores (Multiple Shops): Networks of retail shops owned and operated by a single organisation, dealing in standardised, branded consumer products with uniform pricing.

• Mail Order Houses: Retail outlets that sell merchandise exclusively through mail/post without direct personal contact.
• Consumer Cooperative Stores: Co-ops owned, managed, and controlled by consumers to eliminate middlemen and provide goods at reasonable prices.
• Super Markets: Large self-service retailing units selling a wide variety of food, laundry, and household items.
• Vending Machines: Coin-operated automatic machines useful for selling pre-packed, low-priced, high-turnover products.

• Replaced 17 indirect taxes (8 Central + 9 State) and 23 cesses.
• Comprises CGST (Central GST), SGST (State GST), and IGST (Integrated GST for interstate transactions).
• Four primary tax slabs: 5%, 12%, 18%, and 28%.
• Governed by the GST Council, a constitutional body representing both Centre and States.
• Avoids the cascading effect of taxation through the Input Tax Credit (ITC) mechanism.

• Interstate movement of goods: Streamlining vehicle registration, transport policies, and highway construction.
• Octroi and local levies: Ensuring local taxes do not hinder smooth transit.
• Harmonisation of sales tax: Promoting uniform tax structures across different states.
• Marketing of agro products: Streamlining subsidies and agricultural marketing policies.
• Promoting sound infrastructure: Partnering with public agencies to invest in roads, railways, and power.