Bonanza, Come What May!

Pre-GST panic mode prompts retailers to hold grand sales, offer big discounts, triggering shopping spree

- Ushinor Majumdar

Unsure of the fate of tax credit on their existing stocks, several brands and retail stores have started offering massive discounts ahead of the Goods and Services Tax (GST) rollout on July 1. Though some relief on availing pre-GST regime stocks has been ­given by the government, businesses still want to do away with as much stocks as possible.

If the thought of an early seasonal discount on clothes and other goods makes you sweat, you can buy an air conditioner at a 25 per cent discount to cool yourself down. While the government and political spokespersons for the party in power have been trying to allay fears, there is no denying that the new tax itself is a mystery to many. Some finance department officials, including finance secretary Hasmukh Adhia himself, have been meeting with industry and trade bodies to explain how the new tax regime and the transition to it will work.

GST is a new indirect tax meant to ­replace a list of 18 existing indirect taxes with two exceptions: customs duty for import and export of goods and services and Securities Transaction Tax on purchase and sales of shares and securities.

The government has directed that goods manufacturers and services providers register themselves on the GST network (GSTN), a digital platform, by June 30. As yet, there have been 90 lakh reported registrations on the network. If anyone in the supply chain doesn’t register, others will have to automatically boycott him because they will not get their input credits if they deal with businesses that are unregistered under GST or those who do not enter details of transactions under GST. The system will require a monthly filing of returns. However, the deadline for the first filing is September 15 in anticipation of audit and online filing difficulties.