GST has brought some steady impression over the retail sector and has been creating a dilemma in the state where there is no fixed tax rate on which the GST reform will operate. The retail sector is much likely to raise issue against the matters like the final tax rate and the tax credits which are available for them.
The GST council which is directed by the finance minister Arun Jaitley will be deciding the GST tax rate soon in the upcoming month, as the discussion are concluding towards the 18 percent of the rate or even higher. The retail sector has been clinging to the fact that there is no option to offset the service tax paid by them as the manufacturers have that privilege.
V.P. Harris, managing director, Witco (India) Pvt. Ltd. Says that, “GST, after all, these years, is surely happening but we will need to wait and see in what form.” He also added that “It looks like the final rate would be higher, which is a cause of concern for us.”
Manufacturers have the liberty to add the payments against the excise duty on their own products, as they use transportation and other services and pays service tax for the same cause. Mr. Harris said, “As retailers, we were looking forward to GST to avail of tax credits. But from the clarifications issued by the Finance Ministry, it looks like we might not get that benefit.”
There would be two major part of the GST as Central GST (CGST) and State GST (SGST) which would be providing the tax credits separately in their own proportion. Among all the features, the cross-utilization of the funds are not allowed in both the part.
