Industrial goods manufacturers not in hurry to clear pre-GST stock

They want GST roll-out to be delayed so that the MSME manufacturers can take details of the stock.

As of date, all States and Union Territories, barring Jammu and Kashmir, have endorsed their respective State Goods and Services Tax Act.

Manufacturers of industrial goods, components and products such as pumpsets do not seem to be in a hurry to clear the stocks with them before GST is implemented. According to some of them here, the facility to take credit on the taxes paid for closing stock is expected to give relief.

An official of the Central Excise Department explained that registered manufacturers will be able to carry forward the credit for the duty paid.

In the case of unregistered manufacturers, micro and small units that are not under the Excise net now, and traders, they will have to furnish procurement evidence/invoice with details of the duty paid.

This option is available for six months and for materials purchased in the last one year. If there is an invoice with details of Excise and VAT duties, they can take 100 % credit. If there is no invoice with these details, they can still produce proof of procurement and will have the option of paying the duty and taking specific percentage as credit.

“In the case of pumpset manufacturers, they have not gone in for special sales as consumers buy a pumpset only if there is a need. Further, the facility to take credit means there is no need for them to clear their stock,” said V. Krishnakumar, vice president of Southern India Engineering Manufacturers Association.

V. Sundaram, president of Coimbatore District Small Industries Association, however, said the micro and small-scale units will be affected despite this facility as they are unaware of the procedures and have not taken details of the closing stock. “Every debit and credit note has to be entered. A micro unit owner would be managing every activity - purchase, sale, production, etc. and would not have all the documents. We want the GST roll out to be delayed so that the MSME manufacturers can take details of the stock with them,” he said.

Further, most of the manufacturers purchase raw materials from other States and details of e-way bill are finalised only on Saturday. This gives little time for the manufacturers to be prepared, he said.

According to Kumar Rajagopalan, Chief Cxecutive Officer of Retailers’ Association of India, several retailers are offering discount sales for two or three reasons. Some of them might have a lot of stock (across the supply chain) which they will not be able to liquidate in six months.

Hence, they want to liquidate now through special sales. “Some others are pressing the panic button without understanding the actual impact of GST. In fact, retailers will be able to take input credit for various services under GST which they were unable to do now.” For some others, this is one of the marketing opportunities, he said.