The deadline to avail input tax credit by mobile firms on handsets manufactured before July 1 is December 31, 2017.
“Our feedback is that the six-month July-December 2017 period is insufficient to liquidate the old stock… at least 20-30 per cent stock is still in pipeline in the vast supply chain under 35 GST jurisdictions,” ICA National President Pankaj Mohindroo said in a letter to Finance Minister Arun Jaitley on December 23.
The ICA has sought extension of time period by at least 6 months, saying by that time the stock will be exhausted.
Mohindroo said there will be no revenue loss as such since duty has already been paid on the products and facility to avail input tax credit for unlimited duration is available in the GST regime.
“There is no reason why the trade should be denied similar carry forward in the cases of unrebated taxes suffered in the pre-GST regime,” he said.
The Indian mobile device industry size in the current year is estimated at Rs 1.5 lakh crore and the number of transactions in the industry will be at least 4-5 times of this value, since the same item changes hands several times in the supply chain from raw material to finished goods and then to the wholesalers, distributors, retailers and consumers, the ICA letter said.
“There is a lot of resentment in the trade on this and we understand that some parties have gone to the High Court and have secured interim relief. Others too may have gone to court to have the judgement extended to them also. Petitions on the same lines are being filed before the High Court in the other GST jurisdictions. Even the Supreme Court may be seized of the matter,” he said.
Mohindroo said that extension of deadline till June 30, 2018 will ease the transition to GST and give relief without hurting industry and trade.