After demonetisation, Delhi traders fear technology-based GST

Traders in Delhi’s biggest wholesale market Sadar Bazar feel that if demonetisation was the first blow, Goods and Services Tax (GST) will affect their business further and at least 20% traders will perish due to the added tax burden.

Their main concerns were about compliance to the new tax regime and the tax slabs.

The essence of the success of a pan-India uniform tax regime is going to be technology but that is what scares the traders of Sadar Bazar. Deepak Mendiratta, president of Sadar Thana Road Vyapar Mandal said, “Under the GST law, we will be required to furnish three returns monthly and one annual return. We work on very less margin and it is difficult to keep a tab on such technicalities.”

But the government assures that once GST is rolled out and its benefits are felt, these initial hiccups will disappear.

“Traders will have to fill up GST Return 1, the other two, GST Return 2 and 3 will be auto-populated. So people should not be so apprehensive. Only if inputs are missing in Return 2 and 3 will they have to be filled manually,” said Arun Goyal, additional secretary of GST Council.

But traders fear that their cost will increase as they have to pay more to accountants. “Also, taking most services online is unfair to the principle of promoting ease of doing business as people here are not technically very strong,” Mendiratta said.

Rishi Sachdeva, general secretary of All India handbag manufacturers and Traders association said, “Once GST would be enforced, the leather goods will be taxed at 28% as it is considered as a luxury good. Earlier, we paid 12.5%.”

Similar grievances are expressed by traders dealing in scientific apparatus and instruments such as microscopes, models and teaching aids.

Jasmeet Singh, a trader and member of Confederation of Educational and Scientific Trade Association said, “Classifying microscopes, models and teaching aids which are used in education and health sector will not just increase the costs but also deter the schools and hospitals that have less funds from buying it.” On, the one hand government talks of promoting Sarv Shikhsha Abhiyan and Operation Black Board and on the other hand such moves defeat the purpose, he added.

Similar concerns were expressed by the jewellers of Sadar Bazar in Gurgaon. They are a worried lot, thinking that sale will suffer as the tax has increased from 1% to 3%.

“The GST Council’s decisions on tax rates are done after careful consideration so that the tax rate under GST does not increase. Goods of large consumption have either been kept out the tax purview or at the lowest slab,” said Goyal of the GST Council.

Fear among wholesalers and retailers across Delhi-NCR is palpable. There is fear among the traders regarding a difficult compliance regime and goods becoming dearer for the customers. The lack of clarity from the tax authorities has also led to confusion among the traders, said a group of shop owners in Gurgaon.

The government has been advertising GST tutorials on its website.

“There are meetings seminars and discussions by government but there is no clarity,” said Dr Mandeep Kishore Goel, chairman, Shriram Jewellers in Gurgaon’s Sadar Bazar.

(With inputs from Abhishek Behl)