Experts flag input tax credit blockage for FMCG distributors

THE GOVERNMENT'S RECENT circular has brought clarity on trade discounts and credit notes under the GST regime, but has shifted compliance obligation and cash-flow pressure onto FMCG distributors, experts said.

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Indirect tax expert a LexVed Vedika Agrawal said the GST circular 251 makes it clear that financial or commercial credit notes — those issued without GST — do not require distributors to reverse their input tax credit (ITC).