The goods and services tax (GST) will be implemented from 1st July 2017. There are expectations that the immediate benefit of GST would be felt across sectors including the retail. Speaking on same, Yogeshwar Sharma, Executive Director at Select CITYWALK said, “GST is definitely a positive step forward. Initially, five to six months are going to be very challenging not only for the retailers but for the mall owners as well.” Sharma was speaking at the sidelines of CII conference recently held in New Delhi. Speaking on new entries at mall, Sharma informed, “We are in talks with Jo Malone and Molton Brown and couple of other brands that I cannot name yet.”
Simplifying the GST
Going further Sharma said, “From retailers perspective, the stock they had bought before the 1 July 2016 have to be liquidated as they will not get the submit Credit. There would be different kind of issues will come up because of GST and we have to resolve one by one. They are not unmanageable but certainly they required focused attention. “
Explaining further he said that, let’s take an example, if there is an x product , earlier it was on 15% slab and now its on 28% , so it that case our resolution definition is gross sales minus the tax sales, but now larger share will be deducted from the gross sales. Managing this will be really a challenge as the income should not go down. Offcourse, the retailer will get benefit out of it so certain things have to be re-discussed with retailer, and few retailers have different product categories within a store, so each category has to be treated differently.
Explaining more on same, Mahesh M, CEO Ishanya, said, “In regards to retail , space Rentals are one of the main costs of retail stores and it attracts service tax at 15%. Currently, the retailers cannot set off these costs like the other industries. Now they will be able to probably use this as Input tax Credit.”
“GST implementation is a welcome reform for a national fashion retailer like us. We welcome the one- country-one-tax concept as it will simplify business, “said Jacqueline Kapur- Co-founder and president of ayesha accessories.
Speaking on same, Siddharth Bindra, Managing Director, BIBA said,'“ The Government’s decision to put the entire Textile chain under the tax bracket of 5% is indeed a bold and historic move. The second phase of taxing branded garments below Rs 1000 at 5% and garments above Rs 1000 at 12% is also a balanced view keeping in mind the revenue constraints the Government had. Am sure Companies will be able to absorb the increase in the upper bracket and not let it impact the consumer.”
Yesterday Indian government thwarted all speculation by clarifying that the goods and services tax (GST) will keep its July 1 date for countrywide rollout. As market veterans are expecting when implemented, GST would be easing many hassles of current taxing system.