Most managers and store keepers at the malls do not have any idea of how the Goods and Service Tax (GST) which will be implemented from midnight will impact their businesses or product prices, according to a survey by Moneycontrol conducted today.
There is also lot of confusion and uncertainty prevailing among retailers about the pending stock in warehouses and also on the new invoices which will have to be generated. While some de-stocking was visible, a few of these malls have put the billing systems in place.
A slew of malls have been offering huge discounts to liquidate the stock before the implementation of GST.
India is set to implement a nation-wide Goods and Services Tax (GST) from July 1, subsuming a web of local and central levies into a single tax. The GST Council has fixed rates for a host of services, placing them under four slabs—5,12,18 and 28 percent.
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GST will overhaul India’s indirect tax system by consolidating an untidy patchwork of local and central duties such as VAT, central excise and octroi into a single levy, make the tax administration more efficient and turn India into a common national market by removing fiscal barriers, among states.
Most electronic gadgets, for instance, have been placed in the 28 percent GST slab, marginally higher than the current effective tax of about 27 percent—15 percent local VAT (value added tax) plus around 12 percent central excise duty.
The system of input tax credit (ITC), however, has queered the pitch, which may eventually bring down prices, despite a higher GST rate than the current effective tax rate.
Input credit means at the time of paying tax on output, a producer, trader or service provider can reduce the tax already paid on inputs.
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