GST: businessmen fear losses, worried about selling old stock

Traders choose to slow down till taxation is implemented

 With less than 24 hours left for the implementation of the much-hyped Goods and Services Tax (GST), most traders in the district are worried and confused.

Businessmen, who have adopted Value Added Tax (VAT), will now have to switch over to the GST network from July 1.

While a few have geared up to face the new taxation system, some are worried about clearing the existing stocks. Thousands of traders in Mysuru city have already enrolled under the GST network. A few have also decided to slow down their businesses until they get used to the new system. Some of them are eager to clear old stocks while others have taken it in their stride and have decided to wait and watch.

Shopkeeper A E Louis, who deals with vessels, also the treasurer of Mandya District Chamber of Commerce and Industries, told DH that, “If the invoice is raised by implementing GST, the prices will overshoot the maximum retail price (MRP). If the product is sold above the MRP, it is an offence and no customer is ready to pay more. Hence, the traders are confused. Who will bear the loss incurred from selling old stock?”

Pharma companies

Pharma companies, meanwhile, have acceded to bear the expected loss of 5% post GST. This has come as a relief for druggists. K Prabhakar of Lakshmi Drug Agencies, Mandya, said that, “Post GST, the price of various products may come down but if it turns out to be otherwise, it would surely cause losses to the traders. I do not have too many old medicines and will replenish stocks only after the implementation of GST,” he said.

Farmers spared

The GST will have an impact only on major crops as others come under zero taxation. Sugarcane, coconut, paddy and ragi are the major crops of the district and all fall under zero taxation. It will not affect the farmers as they do not come under the GST network and thus will be spared of the confusion of the new taxation system. GST will, however, be applicable if their produce comes under commercial crop category.

For instance, if they sell jaggery in retail, it does not invite tax, but if the same product is branded, it comes under GST purview. Normal coconut oil is not taxed but branded products invite taxes. However, farmers have no clue about the effects of GST on them. They are concerned only if their crops fetch a good price, said Raitha Sangha district president Shambunahalli Suresh.

Rice to cost more

S C Basavaraj of Basaveshwara Agro Rice Industries said that procurement and sale of paddy does not come under GST. “Rice invites 5% GST only if it is packaged and sold under a brand name. The price of rice may increase by Rs 5 per kg,” he said.

Liked the story?

  • 0

    Happy
  • 0

    Amused
  • 0

    Sad
  • 0

    Frustrated
  • 0

    Angry