CHENNAI: Whether you are drinking coffee or tea or water, it will no longer be the same. This assertion has nothing to do with taste. It’s about the price. Your milk may remain the same or even may decrease by a rupee or two. But your coffee and tea prices will increase by 5%. Your water will definitely be costlier. Even your sambar will be more expensive.
Amidst apprehension and confusion, the GST bill was passed at midnight. Even on Friday, some shops kept their shutters down, not knowing whether GST is going to be a harbinger of doom or bringer of growth. Like demonetisation, experts feel this move will also take some time to settle.
Pulses, which are registered and branded, will cost an additional 5% while packaged tamarind will cost 12% more. Even rava, maida and other commodities will increase by 5%. Packaged drinking water, for example, will go up once the 18% GST comes into effect.
“The cost of 20-litre water cans, which are priced between Rs 30 and Rs 40 each, could increase by Rs 5 to Rs 10,” V Murali, head of the Greater Tamil Nadu Packaged Drinking Water Manufacturers Association, said.
However, small traders, whose turnover is below Rs 75 lakh, tend to benefit as they will have to pay 2% of GST. But industry experts say they are unlikely to pass on this benefit to consumers.
Kirana shops, which are usually run by school drop-outs, lack a Tax Identification Number (TIN) and have thus become vulnerable as they can’t migrate to GST without TIN. “Organised retail shops are able to sell the products cheaper and many of them dole out offers,” says Rajesh, a Kirana shop owner. He says the implementation of uniform tax across the nation could push them out of business. Even textile fabric, so far exempted from any kind of tax, is set to see things turn for the worse after the implementation of 5% GST.
According to traders, the fact that a small trader and an owner of a 1000-crore business is brought under the same umbrella shows the lack of thought towards the feasibility of the structure. Meanwhile, the Tamil Nadu Film Chamber of Commerce announced an indefinite shutdown of theatres across the state from Monday “due to lack of clarity” on the tax.