Military canteens catering to defence personnel in Chandigarh are empty as many Unit Run Canteens (URCs) are refraining from purchasing large stocks of consumer items ahead of the implementation of the Goods and Services Tax (GST).
The Indian Express has accessed detailed instructions issued by the Canteen Services Department (CSD) in Quartermaster General’s Branch of Army Headquarters, yet many canteens have failed to maintain adequate stock of goods as confusion prevails about the eventual selling price of many goods. A meeting regarding the effect of implementation of GST on goods sold through canteens was also held in Western Command headquarters in Chandimandir recently.
Since URCs pay their employees out of the profit earned by them through the sale of goods, the canteen management are not taking any chances by ordering more stock lest they run into losses in case there is a revision of prices which makes the goods cheaper. However, the detailed instructions issued by the CSD make it amply clear that the canteens can sell their old stock at old prices even after July 1.
As per a letter issued by the CSD earlier this month, the government has declared 50 per cent exemption of GST on items sold through CSD. The sales of the Unit Run Canteens to end customers are, thus, exempted from levy of GST. As a consequence URCs are also exempted from registration for GST and filing of monthly returns.
The CSD has also listed out some directions to the URCs to be followed from July 1 in order to have a smooth turnover to the GST regime. The canteens should ensure proper accounting of closing stock on June 30 since they have to be sold at old selling prices.
CSD depots will be selling the balance stocks as on June 30 at the old rates to the URCs. “All the stocks received from CSD depots with old selling prices during July 2017 and the closing stocks at URCs as on June 30 should be sold at old prices to the customers,” the instructions read.
The directions further added that no URC should refuse the stocks already demanded by them in June as these stocks have been purchased and supplied to depots. Good purchased by CSD depots from the companies in GST regime will be sold at revised wholesale price. URCs will sell these goods at revised retail price to end customers which will be communicated by CSD HQ in due course of time through their respective depots.
“It is advisable to liquidate old stocks at URCs as on June 30 and only then start selling new stocks. Dual billing system may be followed if all the stocks as on June 30 cannot be liquidated and sale of new stocks to be carried out with new rates if the situation warrants,” the letter reads.
The CSD has also got a revised software prepared for all canteens in order to switch over the new billing process. However, this is dependent on companies disclosing post GST prices to CSD HQs in an early time frame.
The unit-run canteens have been asked to maintain the record of purchases and sales in electronic mode. Since the sale of liquor is outside the purview of GST the canteens will continue with the existing system for selling liquor.