GST pangs continue, businessmen in dilemma: To bill or not to bill
The clouds of confusion over various aspects of the Goods and Services Tax (GST), which rolled out on July 1, continued to hover over businesses on the first Monday after the new tax regime came into effect. The small retailers as well as MSMEs continued to grapple with the complexities unleashed by the new tax order, which made even basic activities such as generating invoices an uphill task due to lack of clarity about the correct format. Many also faced issues regarding integration with their back-end suppliers. "There is still no clarity about the correct format of an invoice under GST. The invoice format is different for large scale industries, small scale industries, for businesses having turnover below Rs 1.5 crore, below Rs 75 lakh ... etc. So they have not given any specific invoice pattern for different categories but have only provided one draft invoice, which is not sufficient. Businesses need more information," Anil Reddy Vennam, former Ftapcci president and technical director at Nayastrap Pvt Ltd, told TOI. The small retailers have been struggling with this issue since the weekend, he added. Earlier, the Central Board of Excise and Customs (CBEC) and the commercial taxes department did state that all the GST taxpayers can design their own invoice but certain fields are mandatory. Ibraheem Bukhari, managing director of city-based ethnic menswear brand Jahanpanah and partner at Mohammed Cap Mart, pointed out that many players are still awaiting clarity. "We are still in the wait and watch mode. Though we have not made any pricing changes, in the coming days we may revise them. The issue is that we procure goods and raw materials from multiple vendors across the country... unless and until they get clarity on which tax slab they fall into and bill us accordingly, we cannot decide on our prices and generate invoices," he explained. He also pointed out that they stopped making purchases in the last few days before GST rollout as there is no clarity on whether they can claim input tax credit on the existing inventory. And it is not just the small and mid-sized players, even large companies are dealing with their share of pain as they have had to halt supplies and dispatches to transition to the new tax regime. In fact, many in the industry feel that it will take at least a week's time to restore normalcy. Dr Reddy's Laboratories CFO Saumen Chakraborty pointed out that large companies have been trying to put their IT systems in order and the nature of the task is such that it generally takes a lot of time.