As the GST completed two years of implementation in Jammu and Kashmir on Monday, the local business community recount a “mixed bag” of takeaways from the new tax regime saying it has impacted the their business.
While handicrafts and dry fruit traders say they have suffered huge losses due to the new tax regime, retail trade community also says profit margins have squeezed due to GST adding that new taxation is a reality to live with.
While the GST was implemented in rest of the country on July 1, 2017, it was implemented in J&K on July 8 only after it was ratified by the State Assembly. Trade community says there is need for creating more awareness on the tax regime and addressing the technical loopholes as well as simplifying the taxation by the GST council.
Various traders who spoke to Greater Kashmir said GST is a “complex taxation” as there is a central law, a state law and an integrated law to follow adding that GST council must make efforts to simplify this taxation.
“GST has to be made more user-friendly as there is a dual authority of the centre and the state with regard to this tax. High prices of goods leading to market crisis in form of decline in shopper footfalls has been the major impact of GST which needs to be overcome,” said Muhammad Yaseen Khan, president, Kashmir Traders and Manufacturers Federation.
Khan, who also heads Kashmir Economic Alliance, said post-GST prices of goods have increased by almost 20 percent causing a slump in business. “Investments of traders to run business have increased manifold and goods have become costlier. Customers are forced to buy cheap and unbranded goods causing slump in organised markets,” Khan said. “GST has caused the squeeze in profit margins as well,” Khan said.
Bashir Ahmad Rather, president of his faction of KTMF and head of Jewellers Association said even as goldsmiths based in Kashmir were trying to come to terms with GST, “added burden of 2.5 percent additional import duty” on gold announced in the budget is a dampener for the gold trade. “We adjusted to GST and tried our best to comply with it but now the additional import duty is proving to be a threat for our industry,” Rather said.
Chief spokesman of KTMF, Farhan Kitab says regular awareness camps must be held by the government for the trade community. “The traders are heavily dependent on chartered accountants who charge us a lot. There needs to be a mechanism where interference of CAs is minimised,” Kitab said. Kitab said a committee must be formulated to have a regular interaction with trade associations with regard to smooth compliance of GST.
Meanwhile, as per artisans, exporters and umbrella trade bodies this tax has hit struggling handicrafts, which they have been demanding should be brought under zero tax. At present both Kashmir handicrafts and tourism attract 12-18 percent GST but a Parliamentary Panel Committee had recently expressed concern over adverse effect of GST on Kashmir tourism and put forth recommendations to do away with this taxing regime on it.