GST roll out: Most stores still clueless about impact of new tax, says BofA Merrill

Most managers and store keepers at several retail outlets do not have any idea of how the Goods and Service Tax (GST) — to be effective from midnight—will impact their businesses or product prices, says a report by broking firm Bank of America Merrill Lynch.

“Most are still waiting to be guided by ‘senior/company management’; many are simply using GST to urge customers to buy ahead of the change,” says the Merrill note.

“While some de-stocking is visible, there seems to be little evidence of planning or preparation at retail stores,” the note says.

According to the broking firm, this indicates that corporates still need time to understand GST themselves and communicate the impact and changes to end of chain staff.

Another Tryst With Destiny! How GST Will Change Your Life After July 1

Merrill Lynch sees the impact of GST on listed company volumes and earnings extending beyond the June quarter.

The note says that the lack of readiness will lead to time and money costs, but these should be temporary.

“With help, most will learn the new filing system. The current destocking is likely to create an interesting effect later in the year,” the note says, adding that a combination of festive season sales, re-stocking post GST, better consumer appetite (because of monsoons and farm loan waivers) and the base effect of the demonetisation quarter could result in a strong year-on-year growth numbers in the December quarter.