Companies Gaze at Cash Flow Problems Due to Change in the Rule of GST
Highlights
A tweak in the rules of GST set to generate cash flow problem.Companies cannot avail CGST or SGST credit before utilizing IGST credit.Tax experts believe this regulation could possibly lead to litigation in the coming few months.Industry experts believe companies can solve this problem by reforming their supply chain structures.
A subtle change in the rule of how Goods and Services Tax (GST) should be utilized is set to generate cash flow problem for number of companies starting this month.
The government introduced the credit utilization mechanism late last year (2018) that companies are mandatory to follow from the beginning of this month.
Under the GST framework, one of the aims is to steer clear of double counting of taxes, companies can collect tax paid on raw ...