Food May not Stay on Hot Plate for Long

Toma­toes & onions may be eat­ing up home bud­gets, but prices of these & many oth­ers are set to fall

The Economic Times - - Front Page -

Jayashree Bhos­ale, Mad­hvi Sally & PK Kr­ish­naku­mar

Pune | New Delhi | Kochi: Toma­toes have touched .₹ 100 per kg and onion prices are ris­ing — but there’s good news on the hori­zon for house­holds as the surge is ex­pected to sub­side soon and kitchen bud­gets are likely to shrink as prices of a host of food items fall or re­main steady.

For ma­jor food items, con­sumers are al­ready get­ting the ben­e­fit of record food pro­duc­tion in 2016-17 fol­lowed by good mon­soon rain­fall this year and in­cen­tives for farm­ers to sow more pulses, which have boosted plant­ing.

The re­tail prices of some pulses have halved in the past six months and are ex­pected to fall fur­ther while rice and wheat are steady. Im­prov­ing the flavour of sta­ples are cheaper gar­lic, pep­per, turmeric and chill­ies, although jeera (cumin) and co­rian­der are about 5% pricier than last year and car­damom is ris­ing sharply.

Tomato sup­plies are likely to rise in two weeks. “Mar­ket will be­gin to cool when toma­toes from the Nashik belt be­gin ar­riv­ing from Au­gust 15,” said Abrar Pathan, a trader based in Narayan­gaon. Higher sup­plies are likely to re­duce prices af­ter a week or two, traders said.

The over­all sit­u­a­tion has changed sig­nif­i­cantly af­ter stub­bornly high food prices since 2009, when In­dia’s worst drought in four decades rav­aged the kharif har­vest and raised food in­fla­tion to 20%.

Any en­tity can claim credit of ser­vice tax or VAT paid in the pre­vi­ous regime against GST li­a­bil­ity. If it does not have proof of pay­ment of tax, it can take ad­van­tage of the deemed ben­e­fit pro­vi­sion.

The key ben­e­fit of GST is that there is no cas­cad­ing of tax (tax on tax) through seam­less avail­abil­ity of in­put tax credit.

Com­pa­nies have to file form GSTR 3B, a sum­marised re­turn, for July by Au­gust 20. That for Au­gust has to be filed by Septem­ber 20. The for­mat of this re­turn in­cludes a sum­mary of de­tails of out­ward sup­plies, in­ward sup­plies li­able to re­verse charges and in­put tax credit el­i­gi­ble on var­i­ous pro- cure­ments made dur­ing the month. But the form does not pro­vide space for car­ry­for­ward of credit from the ear­lier regime. This es­sen­tially im­plies that the GST li­a­bil­ity for the months of July and Au­gust will have to be set­tled in cash.

CALL FOR CLAR­ITY

There is a mech­a­nism for claim­ing credit from the pre­vi­ous regime but that has not been in­te­grated with the GST fil­ing process. This tran­si­tional credit will be avail­able only af­ter fil­ing of GSTR TRAN-1 on the GSTN com­mon por­tal. Even if a tax­payer files TRAN-1 prior to Au­gust 20 (that is, prior to fil­ing GSTR 3B for July), the cred­its would not be al­lowed to be mi­grated in GST as there is no spe­cific ta­ble for dis­clos­ing open­ing credit in GSTR 3B. TRAN-1 and TRAN-2 are the forms for tran­si­tion of in­put tax credit while GSTR 3B is the form in which ac­tual GST payable is filed. To be sure, in­put tax credit can be availed of af­ter Septem­ber in all in­stances.

Tax ex­perts are seek­ing a clar­i­fi­ca­tion or a change in the form.

“It can’t be the in­ten­tion of the gov­ern­ment to deny the ben­e­fit of in­put credit,” said Pratik Jain, leader, in­di­rect taxes, PwC In­dia. “It could lead to huge cash­flow is­sues for in­dus­try, run­ning into thou­sands of crores. A clar­i­fi­ca­tion or amend­ment in Form 3B is needed ur­gently.”

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