Retail stores are planning mega stock sale of up to 50 percent on branded goods this December if restrictions under the Goods & Services Tax for non-invoice goods are not relaxed.
According to a report in The Economic Times, sellers are likely to put toys, kitchen appliances and branded clothes on sale at very low margin or at cost.
Retailers who had purchased goods before implementation of GST in July cannot claim transactional credit after six months. This means that after December 31, these retailers will not be able to set off taxes against GST liability.
Many of the retailers are holding onto their stock with hopes of some relief from the government soon. Most of them had expected to clear the stock during the Diwali sale.
Two big retail chains are also planning to file a petition on same in the Delhi High Court, the report said.
Analysts have raised questions on whether the government can dictate how a business is conducted. “The larger question is whether any law has power to dictate how business is conducted and whether it can lay restrictions on the time frame of selling any products,” Abhishek A Rastogi, a partner at Khaitan & Co. Tax told ET.
Many retailers reported low sales in the quarter gone by due to unsold inventory post the implementation of GST.