Even though IT city Bengaluru has welcomed the biggest policy reform with Goods and Services Tax (GST) in the country many Bengalurians are worried over increase in price of their favourite Idli and filter coffee. Many citizens after their walk at lalbhag (lung space of the city and a botanical garden) who go to the traditional MTR restaurant were surprised to see an increase of Rs 2 on their favorite filter coffee and Rs 3 on a plate of Idli, but feel there will be a course correction.
According to Shrikanth, a professional, it was an early morning shock on Saturday who was curious to see the impact of the GST which he believes would reform the country. But finds it little absurd that his morning coffee in a restaurant has increased by rupees two and hopes for the authorities to take note of this. The 18 per cent GST (CGST 9 per cent SGST 9 per cent) in some popular coffee shops has churned the people who love their morning brew.
Krishna, an IT professional, who is part of Bengaluru culture loves his morning walk and filter coffee was surprised to see the price increase after the midnight implementation of the GST by the Prime Minister Narendra Modi but questioned about Central GST and State GST. He says there need to be more meticulous workout to help reduce the prices which are part of culture like food and shelter.
Many traders in the business district of avenue road, NT road and business lanes of central Bengaluru like in MG Road, Commercial street, traders were confused and did not know what kind of taxation to follow. These are the streets Bengaluru lives on trades running crores of rupees. Jewelers in and around central district in Bengaluru are also confused and wanted more clarity in the GST implementation. A trader Akashmal Jain said they were confused about taxation on certain goods which has no clarity. He wants more time to implement as they have to clear the stock.
According Vijay Bhaskar Reddy an advocate in Bengaluru the GST is great thing that happened. He finds arbitrary taxation will erode with the introduction of GST. He said “with the introduction of GST babudom and inspector Raj will be things of the past. A lot of transparency will come in. Any change is better than a stale status quo.”
Bengaluru is part of the booming health tourism. Many in health sector feel the GST will impact the health care and would increase the cost. According to Jagannath MS, CFO of Columbia Asia Hospitals , the GST legislation was a giant stride in bringing transformation and transparency to business in India and is a laudable effort of the Government.
He said in a statement “By principles of GST, an exempt service cannot avail input credits. As healthcare is an exempt service such increase in taxes on inputs would increase the overall cost for the hospitals and thus will increase the overall cost of healthcare”.
“We have represented to the Government through several business forums to either levy GST at a lower rate or to provide a ‘zero’ rate of GST for healthcare services. This will help healthcare providers to offset any input credit or to claim refund of GST and hence will also keep healthcare costs at the existing levels” , he added.
Bengaluru is also known as pub city with its cosmopolitan outlook. But liquor industry is worried over the impact of GST and cost escalation.
In a statement Roshini Sanah Jaiswal, CRO & Promoter, Jagatjit Industries limited said “The introduction of GST will affect the company negatively in the short term as it won’t get input credit and the cost is expected to go up by 7-9%. However, hopefully the impact will be mitigated over the next couple of months as the Industry is expecting a price rise. The fact that certain Industries have been left out of GST is also going to be a major implementation issue. Hopefully, over the period of time the Modi government will have a uniform GST policy.”
Responding to a question on GST’s impact on tax revenues and the state’s exchequer, the chief minister Siddaramaiah had said, “There are apprehensions that it may get lowered, but it has been decided in the GST council that losses incurred have to be borne by the Central government upto five years.” According to state government officials, about six lakh traders and firms in Karnataka have registered for GST regime so far.
The congress government in Karnataka captained by chief minister Siddaramaiah is opposed to using Goods and Services Tax (GST) as a propaganda tool by Prime Minister Narendra Modi. Siddaramaiah had made it clear that he was opposed to GST being used as a tool of propaganda by the Prime Minister. However he said his party was not opposed to GST .
According to B.T. Manohar, chairman, State Taxes Committee, Federation of Karnataka Chamber of Commerce and Industry (FKCCI), the GST will bring down the prices and check inflation. He said “GST will certainly bring down prices and check inflation. However, price fluctuations are sector specific. In the medium to long term, prices of a whole range of products and services should come down.” eom/blr