Bengaluru: On the second day of roll out of GST, which is touted to fight parallel economy, confusions loom large right from big wholesalers to small retailers.
The shifting to new tax regime Goods and Services Tax (GST) has impacted traders and trade bodies. However, the worst affected are the customers, as they end up paying more.
Dr Nagaraj, a resident of Rajajinagar, said that although the tax reforms are good in theory, the consumers have to face the brunt of tax transition. No traders will bear the burden of increased tax and will it only be passed on to the consumers.
Textile industry
Businessman and social activist Ramachandran N. said that India needed GST, but the percentage of hike isn't acceptable.
"For textiles since 1947, there wasn't any tax. But now a tax of 5 per cent was introduced for those products below Rs 1,000 and 12 per cent for costlier ones. And the tax amount for finished goods like shoes, belts etc are classified as luxury items and attract 28 per cent GST." He added that the percentage of GST hike could have been very marginal without affecting any.
He went on to say that small traders will have to shell out more money out of their small income to shift their software to new GST system, shell out more money to the auditors to tally account and as all these are time consuming, at least one employee will have to be deployed solely for this purpose.
Salaried class hit
Syed Javeed Ahmed, a Bangalore-based techie said, "We as salaried employees are already paying hefty taxes, which burn a big hole in our pockets. With GST our burden will add up. Although my salary remains the same, I end up paying more for certain essentials."
This is leaving us with a bleak future as we have to run our families with the limited income and companies aren't goind to hike salaries anytime soon, he lamented.
Rough bills for old stocks?
As confusions still loom large, wholesalers and retailers are not willing to take any chance. They have put all their fresh stocks on hold and are aiming to clear old ones, some with new GST and some with invoice dated June 30 or even before.
Trade activist and Hosiery Association President Sajjan Raj Mehta compared GST implementation to a premature baby.
"Union government has hurriedly delivered GST. It was delivered on the 7th month (July), while all traders were expecting it to be delivered in the 9th month (September). It has been rolled out without creating proper awareness, training and improving needed infrastructure," he remarked. If it would have been implemented in September, traders and small merchants would have prepared themselves for the move, he explained.
How to sell old stocks?
There is no clarity on the state of old stocks. Traders will have to sell them as per the new GST rule only. As the first and second day of GST fell on Saturday and Sunday, we do not know how it is faring across the city. Within a week we will be able to gauge GST's performance and also be able to address the issues faced by them, Mehta added.
Experts said that for the benefits of GST to trickle down, it will take some more time.
Bakery items costlier
While the small time bakeries are still figuring out what GST is, big time establishments have already started to sell their products in accordance with new GST rule. Prices of your favorite cake, pastry, jams and biscuits have increased from Rs 2 to Rs 10 based on the product with GST hike from earlier 5 per cent to 18 per cent. And the prices of chocolates, waffles and wafers are also set to increase substantially with government imposing 28 per cent GST.
Zero tax on fresh meat
Even though the union government exempted fresh meat -mutton, chicken, fish and eggs from GST, there was no clarity on how this benefit will reach the common man as majority of the meat outlets fall under the unorganised sector.
Cosmetics to be dearer
The prices of many cosmetic items have been drastically increased. The industry is forced to hike the charges of prices for the services offered, said sources from Onyx chain of parlours.
E-Sugam to be renamed
Sources in commercial tax department said that the e-sugam, the brainchild to track online movement of goods will assume a new name Waybill-post GST implementation.
Earlier, the e-sugam was issued for transportation of goods above Rs 25,000. Now, it has been hiked to Rs 50,000. The e-sugam will be renamed as Waybill and would be introduced across the nation, sources added.
The new GST regime has benefited motor vehicle owners as the Karnataka government announced the abolition of 5 per cent entry tax for fuel, which has now become cheaper by Rs 3. As on Sunday, petrol prices were at Rs 64.21 a litre and diesel was at Rs 54.27.
