GST: New rules will have impact on retail chains, restaurants and contractual farming
Even as the government recently brought some parts of agriculture under goods and services tax (GST) gamut, some big retail chains and quick service restaurants (QSRs) may see the impact. This is mainly because contractual farming will now be under the purview of GST. Many big retail chains give contracts to farmers for growing certain agricultural products which are then directly sold in the malls. Industry trackers say that such contractual farming would now attract GST. Also some of the multinational QSRs including some renowned burger chains give contracts for potato farming. That too would now attract GST, say industry experts. Additionally some of the middle men that trade in agricultural commodities would also be included under GST. Industry experts say that some of the smaller retailers who sell different products including agricultural products too would come under the purview of GST. As for traditional farmers, they would not be required to get themselves registered to pay GST. However, those buying products from the farmers may be required pay GST. The government came out with the clarification on agriculture products recently. The government is looking to iron out issues before the centralised tax is rolled out in next couple of months. Some of the sectors however are still concerned how the GST would impact them. Like many banks and financial institutions may be in for a lot of trouble as they could just see the complexity in paying taxes increase under the incoming goods and services tax (GST). Due to the place of supply regulations in GST framework transactions between two branches of a bank is set to trigger a tax, which could prove to be cumbersome. Indian banks have also approached the government to amend the rules regarding this.