GST Day One: Confusion reigns, traders unsettled in Chandigarh

Some restaurants and beauty salons were offering services to people at old prices. There is a 3 per cent increase on salon services and 0.5 per cent decrease in tax at restaurants.

Written by Swati Mahajan | Chandigarh | Published:July 2, 2017 5:32 am
GST rollout, gst launch, gst price, gst rates, latest news GST rollout: Residents buy goods on the first day of GST at a store in Sector 19, Chandigarh, on Saturday. Sahil Walia

DAY ONE of the new Goods and Services Tax saw traders and businessmen confused and trying to find their bearings. Some Tricity shops suspended sales on Saturday in order to get clarity on prices. “The initial transition phase from the old tax policy to the new is difficult. Our old stock will finish in 45 days and then we will get new stock at the revised prices. The whole process will take two months and we will be bearing the loss of the price difference,” said Manish Bansal, the owner of Harri Hyperstore, Sector 26 Agreeing with him, owner of Sector 19-based departmental store Peshawari, Hitesh Gawri, said, “We are waiting for the old stocks to finish and then we will order the new stocks. Also, the problems consumers will be facing is that once the old stock finishes, they will have to wait for the fresh stock to arrive at the revised prices. So, products may be unavailable for a brief period.”

Yagdeep Singh, dealer of Whirlpool who runs a shop at Sector 35, said, “We tried to sell the maximum goods till last night as we are not sure about the new rates. So, we are not selling goods today.” Chartered accountant Nitin Mahajan called these “initial hiccups”. “More or less, there won’t be much of a difference in prices of products. As soon as the old stocks will be replaced by the new ones, the traders and businessmen will also be happy. There is confusion as people are not prepared for it.” Deputy Commissioner Ajit Balaji Joshi says, “The first day of implementation of GST is working fine. Our help desk is open for today and even tomorrow. We are hand-holding our traders and stakeholders.”

Hoteliers, restaurants and salons were functioning on the first day and providing services as per the new tax. General Manager, Yo China, Praveen Kumar, said, “Earlier, the tax imposed was 18.5 per cent and now it is 18 per cent. It is just a difference of 0.5 per cent. So, it has not made much of a difference.” Some restaurants and beauty salons were offering services to people at old prices. There is a 3 per cent increase on salon services and 0.5 per cent decrease in tax at restaurants. On beauty products, there is a 5 per cent increase on tax while 12 per cent tax would be levied on dry fruits, an increase of seven per cent, except for cashew nuts and raisins, which would be at 5 per cent tax only.

Liquor does not come under the purview of GST, but the tax would be slapped on alcohol when it is served at a bar or a restaurant. Advocate Ajay Jagga told Chandigarh Newsline, “I have come across a bill issued by a supplier of beer and amazingly, they are charging GST at 18 per cent on alcohol, whereas alcohol is not under GST law. People are charging by error, considering it under restaurant services.” Jagga said restaurants serving liquor must charge VAT on the liquor bill and GST on the food bill. “If a person consumes only liquor at a restaurant, then he would be charged only VAT and if he eats food as well, then GST will be charged on the food bill,” the advocate added.

Deliveries and takeaways from restaurants would attract the same GST of 18 per cent whereas food from delivery/takeaway joints a lower GST slab. Oven Fresh general manager Taluk Dar told Chandigarh Newsline, “GST has not affected the food and beverage industry. We have already started implementing the revised prices and the prices of products have fallen by just 0.5 per cent.”

But Venu Mukherjee, the vice-president of Western Court hotel, said, “Everything is haphazard right now. The software with the fresh GST rates is to be installed at some locations of our hotel. The layman has benefited as prices are slashed. Banquet hall rates are slashed from 23 per cent to 18 per cent, but will the common man start paying the tax honestly that is to be seen.”

GST rates
* Zero tax – No tax will be imposed on non-vegetarian food items like fresh meat, fish, chicken, eggs and dairy products, natural honey, fresh fruits, vegetables, et al.
* 5 pc tax – Clothes below Rs 1,000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, cashew nut, raisins, etc.
* 12 pc tax – Frozen meat products, butter, clothes above Rs 1,000, cheese, dry fruits in packaged form, sausages, fruit juices, etc.
* 18 pc tax – Biscuits, flavoured refined sugar, Bidi patta, pasta, footwear costing more than Rs 500, cornflakes, pastries and cakes, jams, sauces, soups, ice cream. AC hotels that serve liquor, telecom services, etc.
* 28 pc tax – Bidi, chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, pan masala, aerated water, etc.

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  1. Q
    Qamar
    Jul 2, 2017 at 12:45 pm
    In clear words, GST is to collect more money from poor to give reliefs to rich.
    Reply