With a month long struggle with the newly implemented goods and services tax, it has now clear that many of the sectors and individuals are having issues with the classification of the products in GST. While the food industry saw a very different scenario after the GST, as many as 75 percents of the branding logos of packaged food products were disappeared. This is due to the 5 percent levy of GST on branded food products while exempting those with no particular branding. This has led to taking down all the brand names from the product packaging and officially it is taken into consideration.
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There was also a down sale report from the business units across the nation. While the food-grain sector is under hardship for the sales as it reported a flat 30 percent drop down in the sales starting from the month. The Bengaluru Wholesale Foodgrains and Pulses Association Ramesh Chandra Lahoti stated that “The new classification has been confusing. For example, a trader in pulses has to look out for dry leguminous seed classification, which is causing confusion.”
He stated that the new HSN codes implemented in the GST are difficult for understanding and has impacted the overall business routine on a strict basis. It is speculated that the exact impact will come to know when the traders will file the returns for the first time on 20 August.
The garment sector is also under issues of job work in GST, as it impacted the contracts and incoming orders. The minister also required some clarity over the classification of goods and services along with the clarification on the rates too. He stated that “However, for those who complied with VAT well, the first filing of returns under GST may not be a problem. Though there are problems now, we hope it to settle down in the next two to three months.”
