Etailers rush to clear stocks

Vendors on e-commerce platforms are trying to liquidate stocks before July 1. They fear losses resulting from GST.

Many are expected to offer attractive discounts to tempt buyers. They feel clearing the stock would allow them to lower the tax burden, thus bringing down losses. Since they would not get any input credit on stock which is more than a year old they think it’s better to slash prices and incur a loss rather than incur a loss of 10 to 20 per cent after July 1.

GST sellers can claim a100 per cent input tax credit against excise that can be availed on high value items above Rs 25,000 with a serial number and 60 per cent on goods valued less than Rs 25, 000. But there are many products in accessories like a mouse or a keyboard, a cover of a smart phone which do not bear a serial number and are valued less than Rs 25,000. Sellers would not get any credit for these so they would like to sell off as much of the stock as possible.

To get input tax credit on the excise paid, the seller would have to identify the eligible stock and gather all the relevant documents to apply for input tax credit under GST. It could turn out to be extremely cumbersome for many sellers.