KOZHIKODE: For Malayalees, Mahe is synonymous with liquor. But the people of Vadakara travelled the short distance to the Union Territory to make a saving on daily staples, household and electrical items among other things. Now, the implementation of the GST has put an end to Mahe’s ‘market monopoly’.
It was the tax difference between state and Union Territory that attracted shoppers, not just from Vadakara, but also from Kannur and Thalassery. The GST has ended the disparity and brought hope to the merchant community in these places.
Pre-GST, taxes in Mahe were lower than in Kerala, so people from neighbouring areas went to Mahe to buy paint, hardware and electronic goods among other things. Now, the tax difference remains only in liquor and petroleum products.
In Mahe, marble, tiles and household items had only an 8.5 percent tax, while it was 14.5 per cent in Kerala. The GST has standardised it to 28 percent. For electrical goods, previously tax was 5 percent in Mahe and 14.5 percent in Kerala. Now it is 18 percent to 28 percent. “The people of Vadakara didn’t even go to Kozhikode to purchase goods,” said Vadakara Merchants Association president Abdul Salam. “Most of the shops in Kannur, Thalassery and Vadakara have a branch in Mahe to get the benefits of lower tax and 80 percent of the business in these towns went to Mahe.”
For the last 25 years, Mahe had a monopoly in the sale of pulses and cereals. Merchants bought cereals from north India and supplied it to the Malabar region. The GST will end the practice. There was no tax on provisions, including pulses and cereals in Mahe before GST; in Kerala it was 1 percent, while a few years back it was 4 percent. Under GST, there is a 5 percent tax on provisions. “The uniformity in taxes will bring business back to Vadakara, Kannur and Thalassery,” said Kerala State Vyapari Vyavasayi Samiti Kozhikode district president C K Vijayan.