Businessmen are complaining of lack of funds, which could adversely affect the payout of taxes. Overall business slowdown coupled with locked capital in terms of non-repayment of tax credit as well as payment of advance Income Tax have robbed the businessmen of their cash and are now finding the payment of GST difficult, say players. The worst-affected sectors include infrastructure, hardware, furniture, iron and steel and logistics. “The cocktail of overall business slowdown and locked funds in GST has created a liquidity crisis. Slowdown and locked capital are feeding each other, aggravating the crisis,” said Nitesh Jain, a Chartered Accountant based out of Ahmedabad. Jain said the slowdown has affected business payment and buyers are not able to get timely payments. Inadequate filing of returns has also hindered cross-matching of buyers and sellers’ data. Till this happens, getting Input Tax Credit (ITC) is not possible. High-handedness on the part of tax officials is aggravating the crisis. “The government has said all the ITCs over Rs1 Crore will be investigated. Businessmen are hesitant in claiming ITC. Their capital is locked,” Jain noted. Vaaris Isani, president of Gujarat Sales Tax Bar Association said at least half of the clients are complaining of funds shortage. “Clients tell me that after the payment of advance tax, they do not have sufficient funds,” said Isani. “Business is down 30-40 per cent compared to the previous year. The upfront taxation means businessmen are short of funds,” said Hiten Vasant, former national vice-president of All India Motor Transport Congress. Jawahar Mehta, former president of Ahmedabad Metal Exchange, said sellers are not getting payments, as a result of which business has stagnated. “Business is down by about 40-50 per cent compared to the previous year. Prices of metals have also decreased because of global uncertainties. Levying of Anti-Dumping Duty on Chinese imports has resulted in price hike by local manufacturers. All these factors have squeezed the liquidity out of businesses,” said Mehta.

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