GST unpreparedness hits traders, leads to shortage of goods

As the implementation of Goods and Services Tax (GST) has became a reality in Jammu and Kashmir, several Valley-based traders Saturday said many Multi-National Companies (MNCs) and wholesalers outside the state have stopped receiving any fresh orders for new stocks as these firms are still upgrading their systems for invoicing of goods.
Most Kashmir-based traders now fear that fresh stocks wouldn’t be able to arrive here for next one month as outside companies are still in a process to upgrade their systems in tune with the new tax regime.

“I recently visited several multinational companies in Delhi for placing fresh orders but was not able to do so. Any distributor intending to purchase new stocks has deferred their purchases which might impact the overall stock supply position in Kashmir in days to come,” said Farhan Kitab, media and publicity head, Kashmir Traders and Manufacturers Federation.
Most MNCs including FMCG companies had earlier informed distributors that invoice of goods will not be possible for first two weeks of July as these companies were in a process to update to the current tax regime for GST billing.
“We have a forthcoming peak business season as weddings are approaching in August and September. Traders here need to constantly import goods from outside but stocks are not available at present which has created a financial crunch in market. There is even possibility of a shortage of goods in coming days,” said Farooq Ahmad Dar, co-chairman of Kashmir Economic Alliance. Dar said traders in Ambala, Amristsar, Delhi, Haryana, Shimla have not been accepting orders.

Fayaz Azad, president, Chemists and Druggists Association said its members were recently informed by the association to stop new purchases of medicines for some time since the “confusion over implementation of GST prevailed in Kashmir for last one month”. Azad said chemists have been relying on already available stocks which might exhaust soon.
“Our association had decided to stop making purchases as we relied on already available stocks. But now there are some life saving medicines such as insulin and anti-rabbies for which stocks might exhaust soon if supplies don’t resume,” Azad said.
Aijaz Ahmad Qureshi, president, Kashmir Cellular Association said mobile handsets which used to be taxed at 5 percent earlier have been put under tax slab of 12 percent under GST which has lead to a confusion among mobile handset dealers. Qureshi said the confusion is regarding ‘the payment for the remaining 7 percent for stocks already available with them”.
Qureshi said preparing new rate charts will also take some time for mobile manufacturing companies.
“Mobile phones used to be taxed at 5 percent but after GST it will be taxed at 12 percent which has put us in a dilemma. We are not sure who will pay up for the remaining 7 percent for stocks already available with us. Mobile handset is a value high product with a very little margin so there would be huge losses for mobile handset dealers with implementation of GST and increase in tax slabs for our segment,” said Qureshi.