Stock disposal provision gives jitters to traders

Stock disposal provision gives jitters to traders
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Highlights

The provision in the GST (Goods and Services Tax) Act that makes business firms dispose of any stock lying more than one year immediately is creating panic among traders. 

Vijayawada: The provision in the GST (Goods and Services Tax) Act that makes business firms dispose of any stock lying more than one year immediately is creating panic among traders.

Business firms are advised to dispose of ageing stock before June-end in view of the GST roll out from July 1, else new GST rates will be applied to the old stock.

Textile, steel and some other traders are vehemently opposing this, contending that it may give room for tax officials to harass them. Traders said it will not possible to dispose of all old stock within 20 days.

They also said there is no clarity on input tax credit that will be given to stock of below one year. While some firms of large turnover, which are well aware of GST Act, have already been in the process of disposing of the stock, wholesale traders in cities face the heat.

Andhra Pradesh Textile Federation president B Malleswara Reddy told The Hans India that old stocks of for more than one year remain in wholesale and other textile shops in general as the sale of stock depends on liquidity in the market.

“The market has been downward for the last two years as farm sector was affected due to drought conditions. As a result, we could not sell old stock,” he said.

He also said officials say that penalty would be imposed on old stock and cases would also be filed against traders if they do not reveal the stock details.

Steel and hardware traders’ association leader Kandukuri Satyanarayana said they were very confused on the provisions and tax rates of GST.

“It is not correct to direct traders to check whether any stock of one-year-old is lying with us. Several traders have more than one-year-old stock due to various reasons. The provision will affect the traders,” he said.

GST officials communicated to traders to ready their records on closing stock for the period March 31 to June 30 before GST implementation date and make a separate file for those items of unsold stock as on June 30.

By: K Varaprasada Rao

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