THREE DAYS before the rollout of the Goods and Services Tax (GST), confusion over the new tax regime looms large over the trading community.
Traders in the city, who are still confused about the new tax slabs, are concerned over the impact of GST on their business. Local traders and businessmen complained of persisting ambiguity in the tax structure and said they were worried as the transition would lead to chaos in the initial few months.
Viren Shah, president of the Federation of Retail Trade Welfare Association (FRTWA), said the lack of awareness among traders was the biggest challenge. “The early three months will be chaotic simply because traders don’t know what is to be done. Moreover not all traders, particularly those in rural areas, are well-versed with computers and technology. The monthly compliance requirement will be difficult,” said Shah.
A textile trader from Crawford market, Hasmukh Shah, said he was yet to register himself on the GST network portal. “I don’t have much knowledge about what I am supposed to do. Some of my fellow traders told me the registration process is yet to begin,” he told The Indian Express.
Incidentally, the registration process began on Sunday amid Eid holidays and heavy rain. The first two days didn’t see any registrations at the help desks set up at Bandra-Kurla Complex and Mazgaon offices of the Sales Tax department.
Yet another problem for the traders remains that not even chartered accountants (CA) are clear on how to make the transition. “Most traders depend on CAs to handle their taxation, but they, too, are not quite clear,” said Mukesh Ganeshmal Sanghvi, vice-president of Maharashtra State Jewellers’ and Goldsmiths’ Federation.
CAs in the city have been conducting seminars and workshops to help the fraternity understand the nitty-gritty of the Act. “In order to help traders, CAs need to be well-versed with the tax,” said Gaurav Kothari, a CA.
According to Kothari, traders will have to be prepared for the chaos during the transition. “There will be massive confusion in the first few days for everyone. Traders holding stocks will have difficulty in figuring out the billing structure. Companies will need time to restructure their Enterprise Resource Planning (ERP) modules, tax structures as well as salary models,” said Kothari adding that one of his clients, a listed construction firm, was planning to shut down operations for a fortnight after the GST rollout.
Another CA, Ashish Bang, said that banks, too, need to be prepared for the transition. “Since banks deal with individuals as well as institutions, their infrastructure and IT system must be robust to hold the sudden influx of data. Compliance will also become a problem,” said Bang.
However, spokespersons of the Bharatiya Janata Party (BJP) said that 500 seminars and workshops had been arranged in the last 15 days to educate traders and stakeholders about details of the Act. More than 200 centres would be opened in the city where concerns about the Act could be discussed, they said.
“It is a myth that some groups have raised problems with the Act. People have come in support of this Act. While the initial counselling to traders is done, our next step will include informing common people over the nuances of the law,” said BJP leader Manoj Kotak.
“We have instructed corporators and local leaders to take charge of their respective areas as far as communicating details about the Act is concerned… people trust this government to carry out a smooth implementation of the Act,” said Shailesh Gedia, head of the campaign for the BJP.