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Businesses Cut Output to Clear Stock Before GST

Businesses reduced output before the GST rollout to help dealers clear inventory and avoid tax complications.

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  1. Impact of GST on Production and Inventory

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

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