Pune traders fear return of ‘licence raj’ post GST

While agricultural commodities are exempted from GST, trademarked commodities have been included under the new tax regime’s ambit. The matter has been made more complicated as clarity regarding a ‘trademark’ seems to be missing.

Written by Parthasarathi Biswas | Pune | Published:June 28, 2017 10:07 am
GST, Pune traders, pune trade, pune licence raj, pune trade licence, Traders have warned that at least in the initial stages, the prices of most commodities are set to rise for customers.

Earlier this month, Sohalan Rathi was forced to spend almost Rs 50,000 to install a computer and upload Tally software. Rathi, who owns a small retail shop in Nigdi Pradhikaran, said this was imperative as the Goods and Services Tax (GST) would come into effect from July 1. “In the monthly meeting of our organisation, we were advised to make such investments. It was said that failure to file regular returns would attract penal action,” he said.

Rathi’s shop has an annual turnover of around Rs 25 lakh. This is going to be his first foray in paying online taxes. “I didn’t finish even my secondary school education, so there is no question of me filing the returns… a local chartered accountant has agreed to do it for Rs 1,500 per sitting. Overall, my expenses are set to increase by Rs 10,000 per month,” he said.

Trade organisations have advised their members to opt for regular filing, which has led to traders like Rathi investing in computers and software. With no other option available, Rathi said he will be forced to increase the prices of groceries from July 1.

While agricultural commodities are exempted from GST, trademarked commodities have been included under the new tax regime’s ambit. The matter has been made more complicated as clarity regarding a ‘trademark’ seems to be missing. Traders say that while rice, when sold loose, will not come under GST, when sold in a packet, it will come under the tax regime. Even as the date of implementation inches closer, confusion remains. Meanwhile, traders have warned that at least in the initial stages, the prices of most commodities are set to rise for the end customer.

Traders are also wary about the return of the ‘licence raj’. Ajit Sethiya, former president of the Pune Merchant’s Association, said that lack of awareness was a major cause of concern. “We had multiple meetings with the state government to resolve the matter, but they were of no avail,” he said. Sethiya also said that traders should be given a subsidy for setting up infrastructure such as computers etc. He said they have demanded that penal action should not be taken for the next 21 months, to let traders get accustomed to the system.

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  1. X
    xyz
    Jun 28, 2017 at 7:50 pm
    that is correct it is new version of ‘licence raj’
    Reply