A week has passed since the ambitious Goods and Services Tax (GST) was rolled out by the Centre after months of discussions and deliberations. While, there have been protests against the measure in some states and anger among the trader communities, the process of transformation has, on the whole, from the old regime to the new, has continued without any big impediment. The biggest criticism of the measure by the BJP-led government is that it has been launched in a ‘hurry’ and it does not fulfil the set goal of ‘one nation, one tax’.
A look at the positive and negative impact of GST after one week of its implementation:
Implementation in Jammu and Kashmir
After a delay of one week, the indirect tax regime was also implemented in the state of Jammu and Kashmir after the Assembly passed Goods and Services Tax Bill on Friday. While Opposition parties and traders in the state protested against its implementation citing J&K’s special status and Article 370, CM Mehbooba Mufti said, ““Our nation, Prime Minister, President maintained our dignity, we maintained theirs.”
Octroi and movement of heavy vehicles
Amid confusion caused by the new tax regime, the number of trucks, carrying goods, moving from one state to the other has come down. In Delhi, the entry of trucks has come down by 40 per cent. On the other hand, in most of the states, the sales tax, octroi and other tax checkpoints have been removed after GST implementation helping in a smoother and easier movement of the vehicles by only submitting a declaration of their goods.
New courses and jobs for commerce students
The need for businesses to move from old tax regime to the new and introduction of monthly, quarterly and annual filing of tax returns has led to generation of more work for the CA firms. Owing to this, these firms have began hiring fresh commerce graduates to undertake the accounting and data compilation work. In addition, sensing the need, some colleges have also started offering courses in GST.
Tax on sanitary napkins
Perhaps, one of the biggest points of criticism for the government has been imposition of 18 per cent tax on sanitary napkins. On the other hand, zero per cent GST on condoms has been welcomed by many. One of the impact of such high tax rates on sanitary napkins has been on the sex workers of Sonagachi in West Bengal who will not have to pay a higher price for the product which was earlier made available to them at a subsidised rate.
Restaurant bill and other basic amenities
One of the most talked-about impact of GST is on the restaurant bills which will come down, in some cases a considerable decline, as the different taxes which were applicable in old regime have been subsumed into one. On the other hand, mobile network and Wifi rates have gone up.
The revised prices of cars and bikes under the new regime are comparatively lower. Manufacturing giants like Maruti Suzuke, Hyundai, Tata motors, Honda, Toyota, Mahindra and Mahindra, Renault, and several others cut prices of a number of products offered by them after the rolling out of GST. However, on the other hand, prices of some hybrid and luxury cars have also increased post GST.
Price rates in real estate sector
According to a report by Edelweiss Securities, the initial impact of GST on real estate is going to be a drop in prices by one to three per cent. A simpler tax rate and increased transparency is likely to improve buyer and investor sentiment. A reduced cost of logistics and likely increase in profit margin will help the developers too.
Small traders protest; TN theatres call off strike
According to reports, small traders like sculptors, sports equipment manufacturers, among others have also protested against the GST demanding a roll back. In addition, Tamil Nadu theatre owners also went on strike from July 3 closing down 1,100 theatres in the state protesting against ‘high’ tax rates but called it off on Wednesday after a committee of government officials and representatives of theatre association was formed to solve the issue.