India’s new tax regime — Goods and Services Tax (GST) — did not go down well with majority of traders in the city.
Even as Prime Minister Narendra Modi called the GST as Goods and Simple Tax, the city traders were confused and did not find it simple on the very first day.
The central government launched the GST on Friday midnight. It is considered as the country’s biggest tax reform, which will boost economic growth and simplify the process by unifying multiple taxes across the nation.
Most of the traders HT talked to were unclear about how the new system will work.
Anil Vohra, president, Chandigarh Beopar Mandal, said: “The launch of GST was certainly not smooth. Shopkeepers are afraid of committing mistakes and are choosing not to give bills. It is also impacting the business at some places.”
The problems were mainly faced by small traders who cannot afford chartered accountants, he said.
Tajinder Singh, a city-based cloth merchant, said: “There is a lot of confusion among traders. Our doubts have not been cleared. We have been told that the government will decide about the GST on textile on July 3. So, what should we do till then?”
Most shopkeepers are not giving computerised bills, he said.
Sanjeev Chadha, president, Progressive Traders’ Welfare Association, Sector 17, said around 70% traders were confused about the new system.
“Many do not know how much tax is to be imposed on which item, what will happen to the existing stock, should they choose composition scheme or not and which software to use,” he said.
Chadha said the business has been badly impacted as shopkeepers are too busy in counting existing stock that they do not have time to look after customers.
When asked why they don’t clarify their doubts during seminars being organised by the UT administration, he said: “The officers have failed to answer our queries. In most of the ‘rath yatras’ started by the excise and taxation department, officers fail to answer the queries.”
Gagan Chhabra, general secretary, Mohali Industries Association, accused the government of ill-preparedness.
“We as traders are for the GST, but the government is not prepared to implement the new policy. Government officials are themselves confused,” he said.
While traders had a troubled day, malls had a gala time.
Big Bazaar at Elante announced a mega sale from 12am to 2am, which saw a footfall of over 400. Products were available at discounts up to 22%.
In Chandigarh, hotels and restaurants switched to the new billing system on Friday midnight. They started issuing bills with GST from 12am.
CLEARING CONFUSION
Rajan Datt, additional commissioner of customs and GST, stationed at the Chandigarh office, answers various queries of the traders:
How to change billing pattern?
Whenever you supply or buy within the state, charge Central GST (CGST) and State GST (State GST). If GST is 18%, 9% share will go to the Centre and 9% to the state. When you sell or buy something from the other state, for instance a Chandigarh trader buys something from Panchkula, then Integrated GST (IGST) will be charged.
How much tax on which item?
The details of tax rate on each item are available on www.cbec.gov.in
What if a mistake is committed while billing?
The first year is for hand-holding, which means no one will be punished for committing mistakes, but they will be told to correct it.
What happens to the existing stock?
Scrupulous traders will not have any issue, as they have been maintaining accounts properly. The Central Excise Duty paid on the existing products will be carried forward to CGST, Central Sales Tax to the IGST and Value Added Tax (VAT) to SGST. Meanwhile, traders who were not paying taxes and were indulging in cash transactions might face some issues.
Should traders choose composition scheme or not?
Composition scheme means that one will have to file quarterly returns instead of monthly. The rate for manufacturers, it is 1%, for traders it is 2% and for dhabha owners it is 5%. Those traders are included in it whose annual turnover is less than Rs 75 lakh. The scheme is not for remaining service sector.
For further queries, traders can call on the helpline number: 0172-2703019 (9am-5pm)
