Traders can expect relief in input tax credit under GST regime
The traders who are involved in manufacturing of commodities including food can expect a relief in input tax credit under the GST regime.
According to Mr. Shankar Thakkar, Maharashtra State Convener, Confederation of All India Traders, the Government of India has assured the traders/manufacturers that they will be able to file GST through the balance of input tax credit.
He claims that some manufacturers like that of edible oil pay high taxes upto 18% on various components including packaging material, machinery etc. to produce/manufacture edible oil, which is taxed at 5% under GST. And they get input tax credit according to the 5% tax slab. This creates imbalance in the ledger, as we pay high tax but get less input tax credit, he said.
Now the matter was presented before the government and the officials assured that the matter is being reviewed by the authorities and a solution that such manufacturers can adjust GST from the input tax credit, is being considered.
If this happens, it will be a big relief to such manufacturers, said Thakkar adding that there is a huge backlog of input tax credit with the GST regime and if the government allows payment of GST through credit ledger (which shows the amount paid by the manufacturer in the previous month as GST, against which it claims input tax credit), it would help the manufacturers/producers.