Retailers fret over GST fallout

October 14, 2016 12:00 am | Updated December 01, 2016 05:47 pm IST - Chennai:

Some sections of the retail sector have expressed concern over the impact of the proposed Goods and Services Tax regime on the final rate and the availability of tax credits for them.

“GST, after all these years, is surely happening but we will need to wait and see in what form,” said V.P. Harris, managing director, Witco (India) Pvt. Ltd. The final rate of GST is yet to be decided.

The GST Council, headed by Finance Minister Arun Jaitley, would meet later this month to discuss the crucial GST rate. The final rate has been estimated at 18 per cent and above.

“It looks like the final rate would be higher, which is a cause of concern for us,” said Mr. Harris, who also heads the Southern Regional Council of Retailers Association of India.

According to him, retailers do not have options to offset the service tax they pay, unlike manufacturers.

A manufacturer who uses transportation and other services and pays service tax for the same, can adjust those payments against excise duty for the products.

“As retailers, we were looking forward to GST to avail of tax credits. But from the clarifications issued by the Finance Ministry, it looks like we might not get that benefit,” Mr. Harris said, although the final structure of GST is yet to emerge.

According to a FAQ released by the Finance Ministry, there would be Central GST (CGST) and State GST (SGST) and tax credits would be available separately under both heads. However cross-utilisation would not be allowed between Centre and State rates.

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