Union Finance Minister Arun Jaitley has announced that military canteens would initially pay full GST and get 50 percent refund on the total tax.
The Centre and the states have agreed to refund 50 percent of the Goods and Services Tax (GST) to the Canteen Store Department (CSD) - also known as Army Canteen - after the latter deferred orders due to the disparities in tax payout, reports The Economic Times.
CSD was created to provide quality products to defence personnel and their family at lower than market prices. It runs retail stores across the country and CSD is the most profitable retail chain in India.
Union Finance Minister Arun Jaitley announced on June 3 that CSD would initially pay full GST and get 50 percent refund on the total tax.
The report said that CSD, in a letter dated May 31, has asked all depots to hold orders being placed for supplies in June.
CSD is one of the biggest customers for companies such as HUL, United Spirits and Samsonite. It procures consumer goods and consumer durable products in bulk directly from them and sales to the canteen forms 5-7 percent of these companies' total sales volume.GST is going to be implemented from July 1 across the country and a four-tier tax structure has been finalised including slabs of 5 percent, 12 percent, 18 percent and 28 percent.