CHAPTER

Internal Trade Scan Me!

9
Learning 0bjectives
After going through this chapter, the student will be able to : 4:30
State the meaning and types of internal trade. STUDY PLAN [Link]
Appreciate the services of wholesalers and retailers.
Explain the different types of retail trade.
" Highlight the distinctive features of departmental stores, chain stores and mail order business.
" Understand the concept of GST.
mum Puestions

TOPIC-1 INTERNAL TRADE: MEANING, SERVICES OF WHOLESALER AND RETAILERS

Revision Notes
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List of Topics
" Internal trade: Buying and selling of goods and services (i) Availability of goods. Topic-1: Internal Trade: Meaning,
within the boundaries of anation is referred to as internal (ii)Risk sharing. Services of Wholesaler
trade. Internal (iii) Grant of credit. and Retailers. Page No. 148
Trade Topic-2: Types of Retail Trade:
Types of Internal Trade (iv) Marketing support.
(1) Wholesale trade Itinerant and SmallScale
(v) Specialised Fixed Shop Retailers.
(2) Retailers trade knowledge. Page No. 148
" Wholesale Trade: Wholesale trade " Services of Retailers Topic-3: Large Scale Retailers:
refers to buying and selling of goods and to Manufacturers and Departmental Stores,
Scan Me!
services in large quantities for the purpose Wholesalers: Chain Stores, Mail-order
of resale or intermediate use. Business. Page No. 150
() Help in distribution
. Retailers: Are the channels of distribution who buy of goods Topic-4:VWhat is GST? Page No. 151
the goods from wholesalers and sell the goods of different (ii) Personal selling
varieties in small quantities directly to ultimate consumers.
" Services of Wholesalers to Manufacturers: (iii) Enabling large-scale operations
(i) Facilitating large-scale production. (iv) Collecting market information
Internal
(ii) Financial assistance. (v) Help in promotion Trade.
" Services of Retailers to Consumers: Documents
(ii) Bearing risk.
(iv) Expert advice. () Regular availability of products Used
(ii)New products information
(v) Storage. (ii) Convenience in buying
(vi) Facilitates production continuity.
(iv) Wide selection
(vii) Helps in marketing function.
Services of Wholesalers to Retailers: (v) After-sales services
(vi) Provide credit facilities Scan Me!

TOPIC-2 TYPES OF RETAIL TRADE: ITINERANT AND SMALL SCALE FIXED SHOP RETAILERS
Revision Notes
Retail Trade: Retail trade refers to sale of goods in small " Types of Retail Trade
lots to the final consumers. (i) Itinerant retailers.
150 Oswaal CBSE Question Bank | BUSINESS STUDIES
Class 11
(ii) Fixed shop relailers. holders.
(iii) Street slall
" Types of Itinerant Retailers shop.
(i) Pedlar and hawkers.
Itinerant
Retallers
(iv) Second-hand goods
(i) Market traders. (v) Single line stores.
Retailers:
(ii) Street traders. " Types of Large
() Departmental stores
(iv) Cheap jacks. (ü) Multiple shops
" Types of Fixed Shop Retailers (iii) Mail order houses
(i) Smallretailers. Scan Me!
(ii) Large retailers. (iv) Consumer co-operative stores
(v) Super markets
Types of Small Retailers: (vi) Shopping malls
(i) General stores.
(i) Speciality shops. (vii) Automatic vending machine

TYPES OFRETAILERS

Itinerant Fixed
Retailers Shop
Retailers
1. Hawkers and peddlars
2. Periodic Market traders
3. Street traders
Fixed Shop Small Retailers Fixed Shop Large Retailers
4. Cheap jacks 1. General stores 1. Departmental stores
2. Single line stores 2. Multiple shops
|3. Speciality shops 3. Mail order houses
4. Street stall holders 4. Consumer cooperative stores
5. Second hand good shop 5. Super markets
6. Shopping Malls
7. Automatic Vending Machine

TOPIC-3 LARGE SCALE RETAILERS: DEPARTMENTAL STORES,

CHAIN STORES
Revision Notes
" Types of Large Retailers: Departmental
i) Departmental stores. Stores establishment, which sells a wide variety of products and
(ü) Chain stores or multiple shops. aims to satisfy all needs of the customers
" Features of Departmental under one roof.
(iüi) Mail order business. Stores:
(i) It is a large store with different types
(iv) Consumer co-operative stores. of products.
(ii) There will be separate
(v) Supermarkets. Scan Me! furniture, clothing, etc., departments like medicines,
(vi) Franchise (iüi) These stores are located in the
" Departmental Stores: A Departmental store is a heart of the city.
large (V) Ihese Stores are managed by the board of directors.
(v) These stores have storage
facilities also.
DEPARTMENTAL STORES

Advantages
Disadvantages
1. Attract large number of customers
2. Convenience in buying 1. Lack of personal
3. More services are provided 2. More cost of
attention
operating the store
4. Benefits of large scale operations 3. More chances of loss
5. Sales get increased by advertising 4. Far away from home
 Chapter 9|Internal Trade 151

Chainstore or muliple shops (meaning): Chain stores " Features of Chain Stores:
multiple shops are networks of retail shops, which are (i) These shops are located in popular localities.
or of (ii) Goods are dispatched from the head office.
enedby the single business enterprise. Under this type under the supervision of a branch
arrangement,¿a number of shops with similar appearance (iii) Each shop is
established in localities, spread over different parts manager.
(iv) Allthe branches are controlled by the head office.
the country. These different shops normally deal in (v) All sales are made on cash basis.
andardised and branded consumer products, which have (vi) The head office appoints the inspectors who do
rapid sales turnover. supervision.

CHAIN STORES/MULTIPLE SHOPS

Disadvantages
Advantages

1. Limited varieties are available

1. Large scale production takes place 2. No personal touch
2. Middlemen are avoided
3. Problems of changes in demand
3. Cash Basis
4. Delay in decision
4. Risk is reduced
middlemen
[Link] cost due to avoidance of
6. Place can be changed if there are no profits
(iv) Absence of bad debt
" MailOrder Houses: retail outlets that sell their
(v) Wide reach
Mail order houses are the
generally no direct (vi) Convenience
merchandise through mail. There is of Mail Order Business
buyers and the sellers in this " Limitations
personalcontact between the
orders, potential customers i) Lack of personal contact
type of trading. For obtaining Ths
land mak
adVeryisements in newspapers (ü) High promotion cost
are approached throughcatalogues, samples and bills, and service
(ii) No after sales
or magazines, circulars,
e p l a c e d

price lists sent to them by post. (iv) Nocredit facilities

Order Business: (v) Delayed delivery
" Advantages of Mail
rekorm
s y s t e m

(i) These shops are located in popular localities. (vi) Possibility of abuse
postal serviceso
(vi) High dependence on
e r t r a L

(Ö) Limited capital requirement

(üi) Elimination of middle nen
iree
SERVICES TAX (GST)
oalt
TOPIC-4 GOODS AND July 2o4ositk

Revision Notes corruption.

for Goods and Services Tax
What is GST?
(vii) Reduction in the sirgle S t e m

" GST stands " Types of GST Central GST (CGSTY

IS an indirect tax imposedison
the supply
multi-stage,
(i)At a central level called GST (SGSTY ter
of goods and services. It a on every (ü)At the state level - 'State
destination-oriented tax imposed " Features of the GST model (referred
Centre
multiple indirect one levied by the
Value addition, replacing
excise duty, service i) Two components:
and the other levied by the States
laxes, including VAT to as Central GST), artd $t Be
Rates for Central GST
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taxes, etc. (referred to as State GST).
" Objectives of GST: GST approved appropriately. applicable
on production are
cascading impact oftaxes and the State GST
yloeliminatethe cost of goods and services. (ii) The Central GST goods and services made for a
distribution of of
dnd to all transactions goods and services.
the exempted
") Streamlining indirect tax regime. Union. consideration except
and State GST are to be paid to the
States and (iii) The Central GST
(a) Growth of Revenue in unnecessary
Centre and the
States
individually.

transaction costs and accounts of the treated

) Reduction in GST and State GST are
the Central GST are
wastages. (iv) Since Central
multipiity of taxation. individually, taxes
paid against the (ITC) for the
)Elimination of the taken s input tax
credit
allowed to be
(vi) One Point Single Tax. burdens.
(vi)) Reduction in average tax
152 Oswaal CBSE Question Bank| BUSINESS STUDIES Class 11
Central GST and can be utilised only against the payment under GST
" Indirect taxes included
of Central GST. (i) State taxes
(v) Cross utilisation of ITCbetween the Central GST and (a) VAT/Sales tax
the State GST is not permitted except in the case of inter- (b) Entertainment Tax (unless it is levied by local bodies)
state supply of goods and services. (c) Luxury tax
(Vi) The taxpayer needs to submit periodical returns. in (d) Taxes on lottery, betting and gambling.
common on format, to both the Central GST authority and to (e) State cesses and surcharges in so far as they relate to
the concerned state GST authorities. supply of goods and services.
Benefits of GST () Entry tax not in lieu of octroi.
(ii) Central Taxes
(i) GST provides comprehensive and wider coverage of (a) CentralexC0se duty.
input credit set-off, youcan use service tax creditfor the
payment of tax on sale of goods etc. (b) Additional exciseduty.
(ii) Many indirect taxes in state and central level have been
() The excise duty levied under the medical and toiletries
included by GST. You need to pay a single GST instead of Preparation act
(d) Service Tax.
all.
(e) Additional customs duty, commonly known s
(iii)Uniformity of tax rates across the states. countervailing duty (CVD)
(iv) Ensure better compliance as aggregate tax rate () Special additional duty of customs- (SAD)
reduces. (g) Surcharges
()By reducing the tax burden, the competitiveness of (h) Cesses
Indian products in international market has increased and ) The above taxes dissolve under GST, instead only
thereby development of the nation. CGST & SGST exists.
(vi) Prices of goods are expected to reduce in the long run Applicability of CGST and SGST
as the benefits of less tax burden would be passed on to ) There is a prescribed limit of annual turnover.
the consumer. (ü) Some goods and services are exempted under GSt
Key Terms
162 Oswaal CBSE Question Bank | BUSINESS STUDIES | Class 11
(vi) Possibility of Abuse: This type of business provides ours, where many places are still without postal facilities,
greater possibility of abuse to dishonesttraders to cheat the this type of business has limited prospects.
customers by making false claims about the products or not
honouring the commitments made through hand bills or 5. Differentiate between departmental stores and chain
adVeryisements. stores on the following basis:
(vii) High Dependence on Postal Services: The success of (i) Location, (ii) Range of product, (ii) Services offered,
mail order business depends heavily on the availability of (iv) Pricing, (v) Class of customer, (vi)Credit facilities.
effiient postal services at a place. But in a vast country like ANS. Following points show the difference between the
two:
S. No. Basis
Departmental store Chain-store/multiple stores
Location
Adepartmental store is located at central place where a Multiple storejchain stores are located at anumber of places ior
large number of customers can be attracted to it. approaching a large number of customer.
(i) Range of product These stores carry a variety of products of different The multiple store aims to satisfy the requiremermts of custom
types to satisfy all the needs of customers under one ers relating to a specified range of their products only.
roof.
(iii) Services offered Departmental stores lay great emphasis to their custom- Multiple shops provide very limited services confined to guar
ers like alteration of garments/ restrooms, restaurants antee and repairs it the sold goods turnout to be defective.
etc.

(iv) Pricing The departmental stores do not have uniform pricing| The multiple chain shops sell goods at fixed prices and man
policy for all the departments; rather they have to occa- tain uniform pricing policy for all the shops.
sionallyoffer discounts, rebate etc., to clear the unsold
stock.

(v) Class of customer These stores cater to the needs of relatively high income These chain stores cater to difterent types of
customers inchud
group of customers who care more for the services pro- ing lower income groups who are interested in buying quaity
vided instead of the prices of goods. goods at reasonable price.
(vi) Credit facilities Departmental stores may provide credit facilities to some Multiple shops make all sales strictly on cash basis. No credit ta
of their regular customers. cilities allowed to the customers.

1x6= 6

4) GST