A month after Goods and Services Tax was rolled out traders, manufacturers and customers are settling into the new tax regime. While eating out has become a little more expensive for the urban middle class, manufacturers are elated over the benefits of Input Tax Credit.
With old stocks in inventories sold out, August looks to have GST complaint prices and taxation on all commodities and supplies. “I do not see a great difference in my monthly grocery bill. The same need not apply to someone who buys more packaged foods. I suppose it is subjective but for me, the bills are better sorted. GST is split under SGST and CGST clearly on the bill. I know where my money is going,” said Samprida, a consumer at a supermarket.
Small traders who were part of the unorganised industry faced difficulties during the first few weeks of the GST regime but now the regulations are becoming clearer. “I own three shops in Chikpete locality of Bengaluru. Business is such shops take place on cash and carry basis and there really is no billing done but under the GST regime, I have to show every single purchase made. I have hired a CA to register myself on the GST network,” said a trader who did not wish to be named.
Input Tax Credit being hailed
Manufacturers are an elated lot. While the new tax regime resulted in a dip in demand during the first two weeks, input tax credit has come as a blessing. “We receive better input benefits now. Profits are higher since we are receiving input tax credit which is beneficial for the industry. Now that we are receiving profits, the benefits will be transferred to the customers. The percentage will depend on the products and the slab under which manufacturer goods fall,” said Uma Shankar, Chairman of sub-committee on GST, the Karnataka small scale industries association
Chartered accountants are now well equipped to handle finances and accounts books. “Many institutions offered special courses to understand GST. Moreover, since enough time was given to understand the tax regime, the fraternity is equipped to redo taxes,” said Narasimhan Elangovan, a CA. He added that initial speculation and chaos was as expected but companies and traders were now getting adjusted to the tax regime.
The urban middle class, however, has begun to feel the pinch. “Eating out has become more expensive. Small luxuries of life are costing us more and discouraging us from spending on something. It gives you a feeling that you are ending up spending more than you are earning,” said Lasya Umesh, an independent interior designer.
Race to register under new tax regime
The union government said that about ten lakh applications for fresh registrations under GST have been received from across the country. The maximum number of applications have come from Maharashtra, Gujarat and Uttar Pradesh. The GSTN has received about 10 lakh applications out of which 1,32,448 applications are from Maharashtra. 90,000 applications have come from Gujarat and over 87,000 from Uttar Pradesh. West Bengal and TamilNadu have submitted 75,000 applications each. On a daily basis, the GSTN is receiving 40,000 applications on an average.
Traders like those in Gujarat, unhappy over GST are hopeful that tax rates of few items could be changed in the GST council. The demand for lower GST on sanitary napkins is also growing loud. In the case of a trader needing help, a GST helpline operating from 8 AM to 8 PM every day will assist with uploading of invoices and data needed for fresh registration under GST.