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

The Economic Times - - Front Page - Deepshikha.Sikar­war @times­group.com

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

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