Along with the rest of the nation, Northeast traders, amid confusion and initial reluctance, have accepted the new Goods and Services Tax (GST) regime, whereas the respective officials are still facing teething problems in its implementation. Meghalaya perhaps is in the worst situation, where there is no clue how to implement the new tax. While some traders have stopped selling various items for the last two weeks, other preferred to shut their business establishment to avoid unwanted documentation to the taxation department.
It may be reminded that Eight GST Commissionerates have been opened in the region, of which two are in Assam at Guwahati and Dibrugarh and one each in Shillong (Meghalaya), Imphal (Manipur), Itanagar (Arunachal Pradesh), Aizawl (Mizoram), Agartala (Tripura) and Kohima (Nagaland). Also three offices of Central Excise and Service Tax in Guwahati, Dibrugarh and Shillong will cover the northeastern states after the GST rolled out.
According to experts, five things have changed after the new tax regime which followed the key economic reforms by the Narendra Modi-led NDA government by way of demonetisation of November 8, 2016, baffling taxpayers with the scope of changes it brings.
No more hidden taxes: Taxpayers are anxious about the apparent increase in tax rates after the GST rollout. Consumers are apprehensive that this will result in an increase in prices, despite the government insisting quite the opposite. The consumers do not have to fear as it is the hidden taxes unified under the new tax regime and mentioned in the invoice handed to the buyer.
Check on price rise: Under the previous tax regime, producers had to pay taxes at every stage which was added to the final selling price. This was called cascading effect of taxes. In simpler terms, it means that a commodity was taxed at every stop before it reached the consumer. This extra tax levied on a commodity eventually added to inflation and the price rise was borne by the customer.
Traders go digital: Traders will have to change the way they used to do business before the advent of GST. With the tax return filing process going digital, traders will have to upgrade to electronic means to keep up. Those who used to generate invoices digitally will have to change their IT systems to accommodate changes brought about by GST.
Check posts removed: With GST being a destination-based tax, border check-posts at state limits have become obsolete and were done away with. The first thing it did was do away with the long line of trucks stranded at the state borders waiting to be cleared by these check-posts.
Price change of essential commodities: No change was observed in the prices of essential commodities as they were kept in the zero percent tax bracket under GST. Luxury cars made in India saw a decline in their prices, though, as they were categorised in the lower tax bracket under GST.
All such are the observations of the experts, while at ground zero the traders and the consumers are equally confused on how to implement the new tax. Amidst this confusion companies and suppliers and many of them have been able to fix the new rates of their commodities. Almost all the items in the market belong to the old stocks as the producers, manufacturer have stopped the supply of all items two months before July and till date no new stocks have arrived. Hence many prefer to down their shutters, especially the establishments dealing in electronics products, while the essential commodities continue to be sold at the old rate.
Some of the traders are pushing sales at the old rate, as there is no clear instruction on how to fix the rate, and the service industry too is functioning with the old rate, and some are issuing back – dated bills only to avoid the confusion. Most items are not selling, and many have to wait for a few more days, while the experts stated that it will still need another six months to streamline the new tax regime.
The Modi government was criticized for what many term as the harsh action of demonetization where the common citizens have to suffer, some have lost their lives while exchanging the old notes in the bank itself. Then comes the Aadhaar card, a 12 digit unique-identity number, in which regard, Modi himself has accepted the idea of Aadhaar but had a problem with its inadequacies when in April 2014 he had dismissed the biometric ID system as a ‘political gimmick’.
This time the GST too is in a similar dilemma, freezing trade and commerce across the nation even after two weeks since July 1, and it is expected to continue for a few more months. Modi seems unable or unwilling to learn from the past on how to implement national policies and schemes with full preparation. This has earned him the moniker of a man in a hurry.