GST: Mumbai traders fear losses due to ambiguity on inventories
Mumbai city news: Traders particularly from sugar and textiles industry fear losses owing to a higher GST rate on inventories and ambiguity on input tax credit.mumbai Updated: Jul 03, 2017 00:50 IST
Two days days after the Goods and Services Tax (GST) was rolled out, traders and wholesalers are yet to adopt to the new system and worried about their old stock. Traders particularly from sugar and textiles industry fear losses owing to a higher GST rate on inventories and ambiguity on input tax credit.
After the state government subsumed the sugarcane cess and excise in the GST, the difference between the old and new stock is Rs30 a quintal. In the absence of clarity on input tax credit, traders fear, they will have to bear losses.
“Before GST, each quintal of sugar attracted Rs71 in excise duty and Rs124 in cess. Now, the 5% GST rate is levied on sugar. As a result of the difference, the old stock is dearer. The industry has made representation to the Union finance ministry and the decision is awaited,” said Sanjeev Babar, managing director of State Co-Operative Sugar Factories Federation Ltd.
Meanwhile, traders complained about glitches while registering themselves on the GST network owing to slow servers and crashes. “The registration of the existing assessee is fast, but the new one are facing problems owing to an unfriendly system and lack of clarity on many fronts. In Bhiwandi, which is known as powerloom town, only 17 traders have registered against expected registration of 25,000,” said an official.
In the absence of the GST-enabled system at many outlets, customers faced the inconvenience. “At a garment outlet of a leading brand in Phoenix Malls, I had to stand for more than an hour for billing as they were preparing the bills manually. Customers were told that the system was not ready,” said Gaurav Shah.
Trades and suppliers were also found insisting for the cash payments instead of credit card or cheques.