Two weeks have gone by since the Goods and Services Tax (GST) came into force. Yet, confusion and doubts still persist. Small and medium enterprises (SMEs), exporters and traders alike are still struck by a sense of uncertainty, and are hesitant to make their first purchases or raise the first sales invoice.
The Indian arm of Danish major Danfoss, which used to receive 25% of its monthly orders in the first week of every month, had secured orders only for 5% of the monthly average in the first week of July. Lynk Logistics, a Ramco Cements group company, which saw a huge surge in its bookings in the last week of June, is witnessing a dip in its order book.
Members of the Madras Electrical Trades Association have forewarned about a 10% increase in the sale prices, though there has been a marginal decrease in tax rate. An upset Sivakasi Firework Association went on strike to protest against exorbitant GST tax rates. It was, however, a different matter that they withdrew the strike subsequently. Chennai-based Sivanandha Pipe Fittings, which does exports and deemed exports, has been facing short-term liquidity crisis as close to 20% of its working capital is locked in inventory.
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