Internal Trade Class 11 Notes Business Studies Chapter 9 - CBSE

Chapter : 9

What Are Internal Trade ?

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    Internal Trade

    • A trade is buying and selling of goods and services with the aim of earning profits.
    • The selling and buying of goods and services within the national boundaries are termed as Internal trade.
      The goods involved in internal trade are a part of domestic production and are meant for domestic consumption, thus no custom duty is imposed on the internal trade.

    Classification of Internal Trade

    Wholesale Trade

    It refers to the process of buying and selling of goods and services in large amount with the objective of resale or intermediate use.

    Services to Manufactures

    • Helps to Market the product
    • Ease large scale production
    • Facilitates continuity of production activity
    • Bearing risk

    Services to Retailers

    • Provides marketing support
    • Gives the benefit of specialised knowledge
    • Risk sharing
    • Goods avavilability

    Retail Trade

    It is an activity where buying of goods and services takes place in small amount from the wholesalers and selling them in small amount
    to the ultimate consumers.

    Services to Manufactures and Wholesalers

    • Support in promotion
    • Source of market information
    • Personal selling
    • Helps in distribution of products

    Services to Consumers

    • Gets information of new products
    • Regular availability of products
    • Facilitates credit facilities
    • Wide selection of goods

    Types of Retail Trade

    Itinerant Retailers

    They do not have a fixed place for doing business; they always move from one place to another to persuade people to buy their products.

    • Peddlers and hawkers
    • Market traders
    • Street traders
    • Cheap Jacks

    Fixed Shop Retailers

    These are small retail stores with a steady location where they provide their goods. As a result, they do not move from one place to another to serve their customers.


    • General stores
    • Speciality stores
    • Street stall holders
    • Second-hand goods shops


    • Departmental stores
    • Multiple shops or chain stores

    Mail Order Houses

    Mail order houses are retail stores that are specialized in selling goods through the mail. There is no immediate contact between the customer and the supplier. Instead, the mail order houses use advertisements in magazines, newspapers, etc., to attract potential consumers. The product details like quality, mode of payment, features, and price are stated in the advertisement.

    Consumer Cooperative Stores

    Cooperative stores usually purchase large quantities of goods directly from producers or wholesalers and resell them to consumers at low prices. The profits made by cooperative stores during a year are distributed as a bonus among members.


    Supermarkets are organized on a departmental basis where customers can buy various types of goods under one roof. However, compared to departmental stores, these markets do not offer certain services such as credit facilities, free home delivery, etc. In addition, they do not appoint salespersons to convince customers about the quality of products.

    Vending Machines

    Vending machines are superb for selling pre-packaged goods and low-cost products with consistent weight and size. In many countries, coin-operated vending machines conveniently sell several things, like platform tickets, hot beverages, newspapers, soft drinks, milk, chocolates, etc.

    Goods And Services Tax (Gst)

    GST is a single tax which has replaced multiple indirect taxes levied by the central and the state governments on the supply of goods and services from the manufacturer to the consumer. It is implemented from July 1, 2017.

    Features of GST

    • It is a national indirect tax as its territorial spread is in the whole country, including Jammu and Kashmir.
    • There are four tax slabs for all good or services. They are 5%, 12%, 18% and 28%.
    • Its is calculated only in the “Value addition”.
    • CGST, SGST and IGST are levied under the aegis of the GST Council.
    • It is based on the principle of destination.