Learning to live with GST

As traders try to grasp the new tax regime, The Indian Express reports on the prices of everything — from what goes in your fridge to what’s in your child’s schoolbag

Written by Hina Rohtaki | Chandigarh | Published:July 4, 2017 8:19 am
GST, GST market, Chandigarh, Chandigarh gst, trade, gst roll out, latest news, indian express Trucks arrive at Grain Market in Sector 26. Many traders are issuing manual receipts. Traders with computers who have got the GST software installed are taking the help of accountants. Express

Despite all efforts by Revenue Secretary Hasmukh Adhia to calm down the country’s GST panic and address the “seven myths” surrounding the new tax regime, Chandigarh traders remain perplexed. President of Chandigarh Beopar Mandal, Anil Vohra, said, “Traders are really confused. Teething problems do occur when a new system comes in place. It will take a few months to settle down.”

However, in a sign that traders are trying to come to grips with the new system, many have started trading and are issuing manual receipts. Traders with computers who have had the GST software installed are taking help of accountants.

Chandigarh Newsline visited a Chandigarh supermarket to see how the shop and its customers were faring, The shop itself was packed and there were long queues at the cash counter as customers questioned the billing counter staff on the tax rates on each and every item. Every item has a separate HSN code and the counter staff were also finding their feet as they generated the bills, which were long.

The tax rate is mentioned against every item and broken up into Central GST, State GST or UTGST. On an item with 18 per cent GST, which was broken into two halves of 9 per cent each for the two categories, one couple insisted that there was no 9 per cent GST rate. Most people were aware that the tax was either 5 per cent, 12, 18 or 28. “It’s for everybody,” said one couple.

Graphic: Suman Ghosh

The effect of GST on edibles is marginal, barring a few items. The new tax makes both ghee and water more expensive. Tax on ghee is up from 5 per cent to 12 and on bottled water, from 5 to 18 per cent. There is no GST on milk, eggs, bread, or loose atta, maida, besan. But, branded atta, maida or besan carry a 5 per cent tax.

Items like Maggi, pasta, cornflakes, Macroni and noodles, will be taxed at 18 per cent, than the earlier 12.5 per cent. Biscuits and confectionary without chocolate are less expensive than those. Munching cashew nuts and raisins are cheaper under the new regime as the tax rate dips from 11.5 per cent (earlier) to 5 per cent now, but almonds and walnuts would slightly be more expensive as they have a 12 per cent tax instead of 11 per cent.

Cosmetics have zoomed from a tax rate of about 12.5 per cent to find a place in the highest GST slab rate of 28 per cent. Sunscreen, hair cream, shampoo, hair colour all are expensive under GST. However, the rate on hair oil and soap has been increased only from 12 per cent to 18 per cent now. Electronic items like air-conditioners, washing machine, television are all under the 28 per cent slab. However, LED lamps would be cheaper, having been included in the 12 per cent tax slab though they were earlier charged at 16.5 per cent in Chandigarh.

Items, which are almost identical, with slightly different composition, are inviting different tax rates. Where toothpaste attracts a rate of 18 per cent instead of the previous 12.5 per cent, tooth powder, inviting a tax of 25 per cent earlier, has become cheaper with 12 per cent GST now.

 

With inputs from Sofi Ahsan

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  1. K
    Kamal Pasha
    Jul 4, 2017 at 12:11 pm
    Impossible for poor to meet both ends. Modi government has created more problems for poor and has provided rich very comfortable lives to win next election.
    Reply
    1. A
      ARINDAM MUKHOPADHYAY
      Jul 4, 2017 at 5:52 pm
      Milk, eggs, bread, fresh vegetables, salt, curd, lassi, unpacked paneer, rice, atta, maida, dal, suji, besan, gur, lassi, fish, educational services, health services are taxed as 0 in GST. Sugar, tea, edible oils, domestic LPG, PDS kerosene, milk food for babies, spectacles, fabric, coal, life-saving drugs, footwear (< Rs.500), agarbatti are taxed as 5 in GST. Butter, ghee, almonds, walnuts, fruit juice, soups, processed food, maggi, pasta, cornflakes, macroni, noodles, confectionary without chocolate, cosmetics, air-conditioners, washing machine, television, computer monitors, CCTV, small cars are taxed above 5 in GST. Essential commodities, which are used mostly by poor and middle-class people, are taxed from 0 to 5 in GST. Luxurious products, which are used largely by richer section of people, are taxed above 5 (viz., 12 , 18 , 28 ) in GST. Hence, poor and middle-class people will feel comfortable and rich people will have to bear the burden of higher tax as per the GST.
      Reply
      1. A
        ARINDAM MUKHOPADHYAY
        Jul 4, 2017 at 6:03 pm
        Milk, eggs, bread, fresh vegetables, salt, curd, lassi, unpacked paneer, rice, atta, maida, dal, suji, besan, gur, lassi, fish, educational services, health services are taxed as 0 in GST. Sugar, tea, edible oils, domestic LPG, PDS kerosene, milk food for babies, spectacles, fabric, coal, life-saving drugs, footwear (< Rs.500), agarbatti are taxed as 5 in GST. Butter, ghee, almonds, walnuts, fruit juice, soups, processed food, maggi, pasta, cornflakes, macroni, noodles, confectionary without chocolate, cosmetics, air-conditioners, washing machine, television, computer monitors, CCTV, small cars are taxed above 5 in GST. Essential commodities, which are used mostly by poor and middle-class people, are taxed from 0 to 5 in GST. Luxurious products, which are used largely by richer section of people, are taxed above 5 (viz., 12 , 18 , 28 ) in GST. Hence, poor and middle-class people will feel comfortable and rich people will have to bear the burden of higher tax as per the GST.
        Reply
        1. A
          ARINDAM MUKHOPADHYAY
          Jul 4, 2017 at 6:29 pm
          All transactions and processes are only through electronic mode, this will bring transparency. Registration for GST only if turnover is more than Rs. 20 lac. Hence for small traders, GST registration is optional. Input tax credit available on taxes paid on almost all purchases. This will lessen the tax burden and subsequently the cost in every stage of transaction. Essential commodities, which are used mostly by poor and middle-class people, are taxed from 0 per cent to 5 per cent in GST. Luxurious products, which are used largely by richer section of people, are taxed above 5 per cent (viz., 12 per cent, 18 per cent, 28 per cent) in GST. Hence, poor and middle-class people will feel comfortable and rich people will have to bear the burden of higher tax as per the GST.
          Reply
          1. B
            Bibek Dey
            Jul 4, 2017 at 7:56 pm
            Most of the voters in India are poor and middle class people. To win an election in India, poor and middle class people are to be provided comfortable lives and not the rich.
            Reply