Source: Sakal Times
Pune: The small traders are believed to be the last segment of the Indian population to accept and be ready for the implementation of Goods and Services Tax (GST). According to Sanjay Phadke from Vayana Network, retail traders especially those dealing in Fast Moving Consumer Goods (FMCG), will not be ready for GST implementation.
Speaking to Sakal Times, Phadke said that the retail traders have not had to deal too much with documentation under the current tax regime. “Small grocery outlets and such traders did not have to indulge in too much paperwork in terms of capturing inward and outward invoices. Now, that the taxable limit is a revenue of Rs 20 lakh per annum, all these traders will come under the GST ambit. They will now have to start maintaining inward and outward records for filing tax,” he said.
He further said that while the retailers have the option of filing summary returns for direct sales to customers, they will have to streamline their input invoices and paperwork. “GST focuses more on business to business (B2B) sales than retail sales so maintaining sales records will not lead to more paperwork for retail traders, but they will have to streamline their input invoices and stocks,” Phadke said.
Adding to this, Vinod Parmar from Vayana Network said the grocers are one community that has not had to file a single return except income tax. “Now, they will have to capture every single entry of inward and outward movement,” he said.
He added that two models will emerge out of the traders’ unpreparedness. “Chartered Accountants (CA) are going to get a lot more busier as a lot of these small traders will turn towards their CAs for their regular GST return filing. It was seen that grocers were not even digitally savvy and maintaining records will be a tedious task. Due to GST, there will be a large thrust on digitisation as these traders will now have to start maintaining their records for filing as their filing will have to reflect appropriately against that of the suppliers,” Parmar said.
Speaking on the FMCG sector, Phadke said that a lot of people in the FMCG supply chain are finding themselves not ready for the GST roll out.
“In the supply chain, there were few companies that were probably not tax compliant. Direct purchasers from companies have their bills to show and may reap transition benefits, but, wholesalers will find it difficult to obtain these benefits. People have stocks, but don’t have proof that they have availed tax credit. For example, they may have excised goods, but won’t have the excise bill as they may not be direct purchasers. This will lead to a run down in terms of inventory in near time. Also, due to this goods may be supplied at a higher rate in the interim period,” he said.