Two weeks after GST was rolled out, the dealers in Tamil Nadu have adjusted well to the new taxation system, but the sub dealers are still not ready and are resorting to pre-dating bills.
According to the state, the transition to the new regime has been smooth - with more than 90% of the 6.56 lakh dealers registering on the GST portal.
“We are compliant with GST and the manufacturers have provided us with Harmonised System of Nomenclature (HSN). However the major problem is sub-dealers are still not ready. They are asking us to back date bills (prior to July 1) and give stocks,” JaiKumar, a Madurai-based dealer of a leading switch gear brand, said.
A Chennai-based automotive component supplier, who wished anonymity said: “From our side we are GST ready and we have given the HSN code to distributors and there is no problem on the original equipment manufacturer side. However there are issues in the after-market side.” He added that distributors are not aware of GST and there is a fear factor that products have become expensive in the new tax era.
The Harmonised Commodity Description and Coding System is generally referred to as “ a multipurpose international product nomenclature developed by the World Customs Organization.’ The purpose of using this code is to ensure that GST invoicing practices are in tune with international standards of product nomenclature.
“One of the major benefits from GST is that the trade is saying that goods are moving fast because checkposts have been done away with. Some dealers have not updated their software. But these are teething problems which will be set right. Another major challenge is that there is a lot of misinformation that has created panic,” K. Vaitheeswaran, a lawyer and tax consultant, said.
“The first real test for GST implementation will be how smoothly the three-stage input check, return submission and payment system function. Tax-compliant businesses will all welcome a single tax such as GST but it is the high tax rates that need to be re-examined,” V.P. Harris Managing Director Witco (India) Pvt Ltd said.
S.Dhanapal, senior partner, S.Dhanapal and Associates, a firm of company secretaries in Chennai, had a different view and said that smooth transition of GST has become a real challenge today, as there appears to be some confusion on the rate of tax applicable for certain items, particularly items for which installation is required including air conditioners and lifts.”
Business houses and shops are charging GST without ascertaining the rate of tax applicable to them. “Assuming a shop charges GST at 18 % instead of 12 % (which is the rate prescribed to that particular item) unknowingly, and further, sells it to an end customer who has bought it at 18 %, even though it ought to have been taxed at 12 %, will it be a justified transaction? The customer loses money owing to ignorance on the vendor’s part, ,” added Mr. Dhanapal.
In Coimbatore, S. Ashok Raja, who supplies terracotta and handicraft items, said: “We come under the handicrafts and cottage industry category. So far there was no duty on our products and our suppliers in other states used to mention in the bills that this is an exempted product. However, now, I hear there is GST on handicrafts. I have not purchased products from other States so far. But, there might be problems while transporting. Also, I plan to list my products on Amazon. So, I will register with GSTN,” he added.
( With inputs from Sanjay Vijayakumar and Sangeetha Kandavel in Chenni and M Soundariya Preetha in Coimbatore )
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