GST COUNCIL TO MEET TODAY, FIRST TIME AFTER JULY 1 ROLL-OUT
Manufacturers confused about how to re-price their products
A fortnight into the GST, small and medium dealers, and manufacturers are grappling with issues of the new indirect taxation regime.
Finance Minister Arun Jaitley will chair the 19th meeting of the GST Council on Monday, via video conference. This would be the first meeting after the implementation. The meeting would reportedly discuss tweaking of rates on some products, besides taking stock of the roll-out of the new indirect tax system.
GST Council to meet today, first time after the roll-out of the indirect tax regime
A fortnight into the goods and services tax (GST), small and medium dealers and manufacturers are grappling with issues of the new indirect taxation system.
Finance Minister Arun Jaitley (pictured) will chair the 19th meeting of the GST Council on Monday, via video conference. This would be the first meeting after implementation and has been advanced from earlier planned on August 5. Sources said the meeting would discuss tweaking of rates on some products, besides taking stock of the roll-out of the indirect tax system.
This has unleashed a wave of happiness among traders, particularly those in Surat who had been protesting against GST on textiles.
Also, GST Network, the body providing the information technology network, would open its system for integration with GSPs (GST Suvidha Providers) from July 24 for a week. After which, it would be open for individual tax assesses, for invoice uploading. GSPs are envisaged as providing innovative and convenient methods to taxpayers and other stakeholders in interacting with the GST systems — from registration of entity to uploading of invoice details to filing of returns.
Archit Gupta, founder and chief executive of ClearTax, a GSP, says while large enterprises had done a backward calculation, estimated the credit availability and were more prepared before the roll-out, small manufacturers are confused about how to re-price their products.
If those opting for the composition scheme buy from unregistered suppliers, they have to pay tax on a reverse charge basis, he says. They also have to factor in how to price their products, so that the fixed rate they have to pay as composition tax is adjusted. Their pricing is dependent upon who they buy from and how they will reprice, he explains.
Those with up to ~20 lakh annual turnover are exempted from registration under the system and those up to ~75 lakh annual sales could opt for the composition scheme. The latter allows them to pay one per cent tax if they are traders, two per cent if manufacturers and five per cent if in the restaurant business.
Gupta says many sellers are seeking his company’s help in filling transition forms and are yet to identify the impact of credit offset on account of stocks held with them.
“Some retailers are confused about whether they should continue to sell at the existing MRP (printed maximum retail price), due to lack to communication from distributor or retailer on how to re-price,” he says.
Saket Agarwal, global chief executive of Spice Digital, also a GSP, says the biggest challenge traders face is of gaps in knowledge about how to file their taxes and what data they need to send to the GSTN and how.
“We are hand-holding traders and MSMEs (micro, small and medium enterprises) to help them with all the challenges, to get them compliant, and providing them with automated solutions to file their returns,” he says.
Saloni Roy of consultancy Deloitte says though functioning of the GSTN portal has not been ideal. “There have been issues faced in uploading of documents for registration. The option for adding an additional place of business for migrated registrations is not available. We are hopeful that invoice uploading shall not face similar challenges,” she says.
THE 15-DAY OLD TAX REGIME
| FM Arun Jaitley to chair the 19th meeting of the GST Council on Monday, via video conference | This would be the first meeting after implementation | Also, GST Network to open its system for integration with GSPs (GST Suvidha Providers) for a week | Later, it would be open for individual tax assesses, for invoice uploading