Tamil Nadu is ushering in Goods & Services Tax (GST) amidst chaos, confusion and celebrations. Many trade bodies downed their shutters all over the State to protest the move by the Government to switch over the GST without addressing their basic demand for rationalisation of tax structure. At the same time, some of the shopping malls have been filled with shoppers awaiting the stroke of mid-night. Some of the shopping hubs have offered mega discount of 20 per cent from the moment the GST comes into effect. These shopping centres will remain opened till 2 am.
But Saturday will see most of the retailers in Chennai downing their shutters demanding reduction in the GST. Sivakasi, the fireworks capita of the country with 800 fireworks factories employing 6 lakh workers wear a deserted look as all the factories remaining closed since Wednesday. “The tax on firecrackers have been increased from 12.5 per cent to 28 per cent with the switching over to GST. This is a heavy burden on the manufacturers as we are already facing onslaughts from China in the form of smuggling of cheap and unsafe firecrackers into India,” said T S Kathiresan, manager, Tamil Nadu Fireworks and Amorces Manufacturers’ Association (TANFAMA). He said the association had given many representations to the union government asking for the reduction of the tax to 12 per cent.
Proprietor of a leading consumer goods market said that prices of items like refrigerators, colour TV, music system, air- conditioners and high end fast moving goods would increase by a minimum of Rs 2,500. “But we do not expect any fall in sales. The segment of people who frequent shops like ours would accept any price hike without any grumble,” he said.
Eateries are likely to see a hike in the prices of all products ranging from Chennai’s favourite filter coffee to all eatables. “We are yet to work out the details. It will take another couple of weeks to tell about any possible increase in prices. But it is certain that prices will increase,” said the manager of a restaurant chain. He pointed out that the tax structure fixed by the commercial tax department is unreasonable as well as unscientific
Nawab, a retail shop owner, said he has not been told by the authorities about the transition in the tax structure. “If only the concerned Government officials had briefed us about the new tax structure, we would have complied with the regime,” said Nawab.
Most of the Trade and business bodies are bullish about the new tax regime. “There are people who refuse to change and organise themselves to face the new tax regime. While the bigger ones would have a smooth transition, the small shops an the neighbourhood kirana shops may have to change with the time. Otherwise they would be left high and dry,” said Chitra, spokesperson of Hindustan Chamber of Commerce.
Interestingly, Tamil Nadu Government had reservations and apprehensions against the tax regime. A Government release issued ion Friday said the commercial tax department was fully equipped for a transition from the present structure.