Herald: Retailers, dealers in Goa wary of keeping inventory before GST
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Retailers, dealers in Goa wary of keeping inventory before GST

13 Jun 2017 05:27am IST

Report by
VIKANT SAHAY

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13 Jun 2017 05:27am IST

Report by
VIKANT SAHAY

PANJIM: The Goods and Services Taxes (GST) Council which has been in overdrive may have work still harder to bring clarity on the new tax regime. Retailers and distributors in Goa are having a nightmare over the ‘complex’ gradation and the different tax slabs.


PANJIM: The Goods and Services Taxes (GST) Council which has been in overdrive may have work still harder to bring clarity on the new tax regime. Retailers and distributors in Goa are having a nightmare over the ‘complex’ gradation and the different tax slabs.

Partner at Magsons, Kirit Maganlal said, “Our concern is on the transition benefits. No one knows what will happen. The input credit has been raised from 40% to 60%. Trade initially will be in a big problem if there is no clarity on inventory. The option before us is whether to have basic minimum inventory, which is not a good business practice or we will have to get more clarity from the government on the differential input credit on inventory.”

Legal meterology law which comes under the department of the weight and measures will also have to look into the sale of products from July 1. The case will be more perplexing is the taxes on a certain product is hiked and the product manufactured and shipped was before June 30 with a fixed maximum retail price (MRP) tag. A distributor or a retailer cannot sell a product higher than the MRP and the inventory will pile up in the store or to clear the inventory the retailer or even manufacturer may have to suffer the brunt.

“We as retail businessmen are working on the trade off to decide whether running out of inventory would be a better option or work on the differential on the input credit that we may lose or gain. However, it is a completely game changing tax regime and we cannot expect magic to happen in the first six months. Our only fear is that the government and the compliance enforcement agencies should not come harshly on the traders in the initial stage,” added Mr Maganlal.   

“Nowhere in the world there are more than two slabs. It is very confusing. We have huge inventories and several genre of products which ranges from groceries to sport items. Keeping record of those itself is a humongous task. There is no white paper on this GST and many of us yet do not know how to go about it. The first three months post July 1 will be litmus test months. To get the input credit in about 15000 different kinds of products it will be very difficult for us to maintain those records so meticulously,” said Director of Delfinos and Champs Anil Pereira.

What worries Mr Periera is that whether his inventory on June 30 will be taken as closing stock or not. 

“On that inventory, the government should allow us input credit or something as we cannot sell any goods above the maximum retail price (MRP). If we import, we keep an inventory for a year. Financial and tax experts are also not very clear on what exactly will happen from July 1 this year,” he said.  

MD of Solar Enterprises, Rohit Mehta who primarily deals in white goods products is of the opinion that since the tax regime is not too clear for the dealers, it is the dealers and the retailers who are very apprehensive. “If there is a rise in the price of a product through GST and the MRP cannot be changed then customers will not buy anything above MRP. In fact that will be illegal to sell any product above MRP. We have a feeling that the dealers will suffer initially if there is a rise in the GST from the present tax,” added Mr Mehta.  

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