With just two days left for the GST roll-out, traders at the tools and hardware market of North Delhi are still trying to comprehend the complexities and implications of the GST regime. The traders are worried about the multiple tax rates in this regime and a possible slowdown in the business — just like during the demonetisation period — in the coming months. Various hurdles in GST, including high taxes and multiple rates, may create problems in the near term, traders claim.
High, multiple rates a hurdle Sandeep Kumar, owner of Century Plastics (India), which is based in Hauz Qazi in North Delhi, told The Indian Express: “If somebody is dealing in 100 items, it’s going to be very difficult for him to register different codes of the items. Therefore, the tax rate should be uniform for all items, or there should be a maximum of two tax rates … Tax rates should be lower so that more and more are encouraged to comply. I am sure tax collections should not be a problem in this way.”
Kumar added: “All previous tax cases, specially VAT cases should be terminated. Where’s the need to collect useless C Forms of the last four years? Surely the government has collected more than 95 per cent of the taxes in the VAT format. Where’s the need for previous assessment of VAT cases to collect 1 or 2 per cent of the remaining tax?” Kumar’s firm is involved in selling hardware material such as PVC flexible pipes and agriculture irrigation systems.
Rajendra Gupta, owner of Ajmeri Gate-based Saral Steel Traders, said that there are various small things in GST that can sour the experience. “For example, GST Bill has to be signed digitally by the owner himself. This means that if I am sick for five days, my son cannot sign the bill and conduct the business forward. Similarly, under the GST regime, if I am unable to sell the stock for three months, I would need to explain to the central government the reasons for it. Such various small faults must be removed by the central government otherwise GST may turn out to be a flop.”
Gupta is also the president of the Delhi Steel Tools and Hardware Traders Association. According to Gupta, his association is one of the oldest in Delhi and its members are spread across North Delhi. “My business is of sanitary and hardware. On these the government has put the tax rate of 28 per cent. Till date the tax rate is 12 per cent. Such massive jump in tax rate is basically pushing the businessman to become tax evaders or thieves,” he said.
Amarsingh Gupta is the co-owner of Saraswati Traders that is situated at Ajmeri Gate. He is also the president of Rubber Plastic Dealers and Manufacturers Association. He stated that multiple tax slabs and high tax rates is a major problem in GST regime. “One pipe bundle would have the tax slab of 18 per cent. The tax rate till date was 5 per cent. It was difficult for people to even pay this 5 per cent. I don’t know how honestly will the same people would pay 18 per cent tax,” he said.
Not many availing the Composite Scheme
“Only those traders, who have been paying the sales tax for last 10 years and are not a defaulter of any bank, are allowed to become the members of my association. These traders have the turnover of more than Rs 75 lakh. Therefore, as far as I know, no one has availed the composition scheme,” Rajendra Gupta said. Sandeep Kumar and Amarsingh Gupta too are not availing the scheme as his turnover is over Rs 75 lakh.
Amarsingh Gupta said that he has been doing handwritten billing till date. As he is not familiar with computers, just like many other traders in the market, he would need to hire one person specially for billing purposes from now onwards. The traders from this North Delhi market do 80-90 per cent of their sales through B2B (business to business) channels.
“I can say with confidence that 99 per cent of the traders have not even published their own GST bill book. It is not just traders. Even officials are not prepared. The sales tax commissioner came to give us a presentation. He came with three-four other experts to assist him. We asked them various questions after they gave us the representation. The commissioner was unable to answer them and said that he will take the questions to the technical committee who would later respond. I can tell you safely that there would be a slowdown, just like the demonetisation period, till December this year as everyone is trying to learn the ropes,” Rajendra Gupta said.
Kumar told the newspaper: “We have already done the GSTN registration. Other than that, we have been working as usual. The truer picture will only come out after July 1. What to do, what not to do, it will be clear after that day only. I have renewed the GST package software for Rs 3,000.”
When The Indian Express asked him if he is going to take help of any GST Suvidha providers for filing returns, Kumar replied: “Not right now. Whatever knowledge the GSTN suvidha providers have currently, it is all theoretical. Even they have not experienced it. The real play would start after July 1. In case I need help from suvidha providers then, I would then contact them.”