Businesses Reduce Output to Liquidate Inventory Before GST Implementation
Prior to the Goods and Services Tax (GST) rollout, many businesses deliberately decreased their manufacturing and distribution activities. This was done to allow dealers sufficient time to sell off existing inventory. The strategy also aimed to prevent additional taxation complications for goods dispatched before GST's effective date but received afterward.
Updated on: Dec 19th, 2024
Impact of GST on Production and Inventory
Ahead of the Goods and Services Tax (GST) rollout, many businesses curtailed their manufacturing and distribution operations. This strategic slowdown aimed to provide retailers sufficient time to sell off existing inventory before GST came into effect. Furthermore, companies sought to dedicate the final days of June to system transitions and software updates. This approach also helped companies mitigate potential tax complexities, as goods shipped before July 1st but received after the GST effective date would incur extra taxes under the new regime. As reported in Times of India