GST regime:Government staff body pitches in for tax free goods | lucknow | Hindustan Times
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GST regime:Government staff body pitches in for tax free goods

The move comes in the wake of the goods and services tax (GST) regime having done away with the provision whereby the state government allowed the welfare corporation exemptions from the VAT on the commodities it sold to government employees and pensioners.

lucknow Updated: Jul 04, 2017 14:52 IST
Brajendra K Parashar
UP Employees’ Welfare Corporation used to sell VAT-free goods to more than two million state government employees and pensioners
UP Employees’ Welfare Corporation used to sell VAT-free goods to more than two million state government employees and pensioners(PTI Photo)

The UP Employees’ Welfare Corporation has urged the state government to find a way out to continue the facility of providing tax-free goods to government employees and pensioners through the corporation’s stores.

The move comes in the wake of the Goods and services tax (GST) regime having done away with the provision whereby the state government allowed the welfare corporation exemptions from the VAT on the commodities it sold to government employees and pensioners.

Read more| GST launched in India: A look at tax rates and how it will impact your basic expenses

“We have written a letter to the government to find a way out to continue the facility for the government employees and pensioners,” corporation’s executive director Ashok Srivastav told the HT.

The corporation used to sell VAT-free goods to more than two million state government employees and pensioners through its 160 depots across the state and two family bazaars--one each in Lucknow and Varanasi--with the state governing bearing the loss of around Rs 200-250 crore every year.

After the GST came into force from July 1, the corporation has stopped selling goods as it is not clear to it whether to clear the old stock with or without the indirect tax. “We have asked the commercial tax department to clarify if we can continue to sell the old stock without charging any tax or the old stock too will attract the GST,” Srivastava said.

He said the staff had been asked to do the listing of the consumables and other items available in the stores and family bazaars as per the four GST slabs. Sources said the old stock worth around Rs 50 crore was available in the corporation’s stores. Srivastava said it was difficult to say anything about the cost at this juncture.

Commercial tax commissioner, Mukesh Meshram, however, hinted the employees’ welfare corporation was unlikely to get the permission to clear the old stocks without levying GST on them.

Read more: With GST, domestic LPG gets costlier but commercial LPG is cheaper

“I am not aware of the corporation having sought any clarification but common sense says that it will be violation of the GST law to sell even the old stock without levying the tax on goods that are not tax-free under the GST,” he said.

Meshram said doing away with tax exemptions was the GST Council’s decision and the state government, he said, had nothing to do with the new provision.

More than 850 employees who are engaged in running the corporation’s depots/stores and family bazaars in UP are worried for their future since ending the provision of selling tax-free goods to the state government staff and pensioners through these outlets may risk their job.

“The GST provision has put at risk jobs of more than 850 government employees who are employed at the corporations depots,” UP state employees’ association president Satish Pandey said, demanding the government to continue the facility of providing tax-free goods to state government employees.