Despite increase in transitional tax credit limit, destocking may continue

In an attempt to minimize losses arising out of the mismatch between tax payout and tax refund, goods and services tax (GST) transition rules for claiming tax credit on old stock have been amended. The deemed transition credit limit has been raised from the proposed 40% to 60% of the Central GST liability (CGST) for products that attract a tax rate of 18% and above. This also applies to products t…