Trade muddles along on Day 1 of GST

Rampant confusion welcomes the tax regime as dealers and consumers try to adapt to the all-pervasive GST.

Published: 02nd July 2017 08:02 AM  |   Last Updated: 02nd July 2017 08:14 AM   |  A+A-

A man sits in his imported flowers shop fiddling with his phone due to dull sales owing to the implementation of GST. (EPS |Albin Mathew)

By Express News Service

When morning dawned on July 1, the first day of the milestone GST regime, consumers and traders across the country braced themselves to “muddle through” as best as they could. The first day brought with it an entire gamut of outcomes — some outrage on pricier bills, poor footfalls in some shops, crowds in others. Some shops even remained shut, or sold goods under old rates. If the first day made one thing clear, it is that clarity is likely to emerge only as the days pass and returns begin to be filed.

But the clearest impact of GST came in the form of more costly restaurant bills in home-grown outlets and cheaper bills in multi-national chains. In Chennai for example, the A2B restaurant chain began dispensing much longer, and pricier, bills in the new format. “We used to charge only 2.5 per cent VAT, but now, prices will increase because of the tax,” said the manager of A2B, Anna Nagar branch. On the other hand, tax incidence that ruled as high as 30 per cent in places like Pizza Hut and Tovo, has reduced because the rate for them has been set at 18 per cent.  

However, while bigger chains had prepared for GST, smaller ones like Parvati Bhavan did not even have bills in the new format prepared. “It will take us a few days to update our billing system but we are taxing customers according to GST,” the restaurant’s manager said.
Electronic goods traders in Vijayawada sold models at older rates, claiming they were “yet to receive new tariffs”.

Many electronic, garment, furniture and mobile showrooms also witnessed poor turnouts compared to Friday, with most consumers staying away because of uncertainty. The situation was similar in Visakhapatnam. Pharmacies too were affected, including from stock shortages that could last as long as a week.

 On the positive side, automobile makers followed through on passing on the benefits of decreased taxation — Maruti Suzuki cut rates on certain models by 3 per cent, even as its hybrids shot up in cost by around `1 lakh. Tata’s Jaguar Landrover announced that its India-made models now cost about 7 per cent less.

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