Missing Column in Form Leaves Input Claims a Shaky Edifice
No column in GSTR 3B form for carry-forward of credit from previous tax regime; clarification expected soon
form does not have column to claim past input credit
have to cough up full GST in cash for July and August
it may be an oversight; seek clarification New Delhi: Companies have hundreds of crores of rupees in input tax credit but they may still need to pay the goods and services tax (GST) for July and August in full, potentially disrupting working capital flows.
That’s because the relevant GSTR 3B form doesn’t provide any column for carry-forward of credit from the earlier regime of central excise duty, service tax and value- added tax. Companies will thus be unable to adjust the tax paid against their liability. Experts said this does not seem to be the government’s intention and it must clarify this quickly as industry is counting on this adjustment and would now need funds to pay GST in full. Companies such as those in auto sector have hundreds of crores of rupees in such credit.
“This will cause substantial cash flow problems for the taxpayers unless the assessees are allowed to utilise transitional credit on a provisional basis,” said Bipin Sapra, partner, EY.
The GST Council, the apex decision-making body for the new tax regime, had approved a liberal transition framework to ensure smooth sailing when making the switch.
Subsequently, food inflation remained in double digits for years, and the prices of pulses skyrocketed.
“Prices of staple commodities have reduced over the past six months. Key items such as arhar and chana dal have seen a 1820% reduction. This has been driven by a combination of factors such as increase in imports and a good crop,” said Srikumar Nair, head (retail), Grofers.
In many towns, prices of pulses at retail stores have fallen sharply in the past six months, traders said. “Retail price of arhar dal has come down to ₹ 92 a kg from Rs 190, in the past six months. Similarly, chana dal has cooled to ₹ 105 a kg from ₹ 180, and urad dal to ₹ 130 a kg from ₹ 200, in the past six months,” said Tushar Aggarwal, a retailer in Noida.
Udit Jain, director, Rajdhani Group, said retail prices of pulses will see a further fall of ₹ 2-5 a kg in the first week of August owing to bumper imports.
Prices are likely to fall as there is a glut in the market with shiploads of pulses reaching ports along with a rise in domestic production and planting. “Supply is more than demand this year and imports are still taking place in huge quantities. Pulses prices, except for chana, are currently ruling below the minimum support price,” said Sunil Baldeva, a Delhi-based pulses trader and importer. He said masur and urad have fallen to ₹ 3034 a kg while tur had fallen to ₹ 35 a kg from ₹ 90 last year.
In the Mumbai wholesale market, prices of pulses have plunged 15% in the past two weeks, ahead of the harvest of urad and moong in central and western India. Traders attribute this to the arrival of 2,200 containers (of 25 tonnes each) of imported tur/arhar, urad and chana at different ports in the past 10 days. Traders said more vessels from Africa, Myanmar and Australia are on the way which will further dampen prices.
Tomato and onion prices have risen recently, but the outlook is moderate. “The rainfall has been good so far indicating that the sowing and supply of vegetables should be good, provided rainfall at the ti- me of harvesting does not damage crops like onions and potatoes,” said Prasad P, group executive vice-president, food and agribusiness strategic advisory and research, Yes Bank.
In Delhi, the wholesale price of tomato has more than tripled in the past 40 days from ₹ 20 per kg on June 21to ₹ 66 on July 31. Potato prices have risen to ₹ 6 per kg from ₹ 4. Traders said tomato prices are likely to moderate in August as new supplies reach the market, while onion supply is likely to remain adequate despite an increase in price in recent days. Good availability of onions in India as well as the international market is expected to keep prices moderate. “Though there was demand for onions due to procurement by the Madhya Pradesh government, the prices rose too quickly within a short period. They have cooled down again,” said Danish Shah, a Maharashtrabased onion exporter. Thanks to bumper production in the previous year, the country has a good stock of garlic. The average wholesale price of garlic has been stable for past two months at ₹ 35 per kg while the price of best-quality garlic has declined from ₹ 80 a kg to ₹ 65. At Indore APMC, the biggest market for garlic trade, wholesale prices were down 68% at ₹ 25 per kg on July 31, down from ₹ 80 a kg on the same day last year. The reasons: sufficient carryforward stock and expectations of good sowing due to normal progress of monsoon.
Growers are upbeat about good production of vegetables during the kharif season. “The rainfall so far has been helpful for sowing of vegetables,” said Sriram Gadhave, president, Vegetable Growers Association of India.
Coriander has cooled 40% from a year ago due to bumper output while turmeric has recovered to ₹ 76 a kg from ₹ 70 year ago, after diving to ₹ 52 in the interim. Black pepper is down to ₹ 500 per kg from ₹ 700 a year ago while chilli has halved to ₹ 50 per kg.
Prices are likely to fall as there is a glut in the market with shiploads of pulses reaching ports along with a rise in domestic production
GST provides a liberal transition from old tax regime Taxes paid on inputs prior to GST can be offset