November 16, 2017
In a major relief to the industry, the government on Wednesday waived the provision of goods and services tax (GST) on advance receipts against supply of goods.
The provision had been causing working capital blockage for industry as the input tax credit (ITC) was available only after receipt of goods.
The decision brings GST in line with provision under VAT, where no tax was levied on advance for goods. “This meets the long-standing demand of the industry, particularly by FMCG and auto,” Pratik Jain, leader-indirect tax, PwC said.
He added that the provision had also created additional compliance burden and raised ambiguity in certain cases about the specific state where tax needed to be paid.
[The Financial Express]