As the name wholesaler explained as the middle man between manufacturers and retailers, have done all the work in black where no bill is given and no receipt just work in cash. Here is the effects of GST on wholesale market:
- WHOLESALERS UNDER GST: As per the past all the wholesaler work is kind of black without any paper work but now as GST comes and arises there become a chain start from manufacturers than wholesaler and in the last retailers. As the bill invoice comes from manufacturers so the wholesaler not able to neglect that and have to fill GST on monthly or quarterly basis so the whole chain goes under GST there is no escape from this.
- WHOLESALER CHOOSE DE-STOCKING AND RE-STOCKING: As before GST retailer can file input tax credit on closing stock, as previous time the tax chain stops on the initial stage like on manufacturers,and this chain is passed to the customers by the retailers. This will lead to retailers across the chain having to de-stock the inventory during the transition phase, and again re-stock under the new GST regime. This business activity of retailers will have an adverse effort on the wholesalers who too will have to de-stock. If only the wholesalers become GST Compliant, sale through the hurricane akin to the demonetization phase, this could all translate into a steep rise in demand for goods as a result of a widespread re-stocking of goods by wholesalers.
- WHOLESALE MARKET WILL REVIVE: As GST continues causes all the manufacturers main concern on the near by state or home state so that gives a way to wholesalers to provide more and more customers and get more and more margin.
Main point is that because GST over all sales gets to increase on state to state basis and the wholesalers earn more margins than before GST with proper implementation.
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