GST is all set to go live on July 1. Great news, indeed! But is it sure to be a happy ending of our woes?
Well, not really. The transition period is about to witness a spike in the price of consumer durables, the reason being that benefit of special credit transfer has been restricted only to manufacturers.
GST Council approves full credit of Central Excise Duty paid on goods over Rs. 25,000 having an identification number, but the facility being available only to the manufacturers.
The transition will affect electronics and consumer goods where goods are sold as completely built units without further processes.
Leader of Indirect Taxes, PwC, Pratik Jain quotes,“If the intention is to neutralise the impact of existing central taxes paid on transition stock of high-value items, then logically even imported goods should be covered. The disparity would mean that consumer electronics, durables and cell phones which are imported would suffer more tax than ones manufactured domestically. The government should surely review this.”
These transition rules were approved on June 3.