Deemed credit-gst

1) Why are traders & retailers desperately destocking their pre-GST inventories? Can't they set off the difference in tax through a hike in their profit margins?

2) why the limit for input tax credit against excise duty payment is set as 40% of GST liability on stocked up inventories. why not 100% ? please explain with an example.

Replies (1)

dear rajesh destocking is necessary because as trader u cant sale above mrp, and in gst new mrp will be available. thus these goods will get old. also there are still some restrictions on t/f of tax credit in new regime. ita better to clear old stock.

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