Welcome GST!

It is expected that the real values of goods will be declared with real quantification, which in turn can save common consumers from paying double tax and bring eradicate arbitrary pricing of goods and services.
Welcome GST!
Representational Pic

Even as local trade and commerce bodies backed by the opposition members in the legislative assembly tried hard to trigger and flare-up anti-GST sentiment in Kashmir, the J&K government, as was expected, boarded safely on the Goods and Services Tax (GST) network. The government has already received the Presidential Order called constitutional (application to J&K) 2017 for implementation of GST regime. If the government is to be believed then both section 5 of J&K Constitution, which empowers the state to collect taxes, and Article 370 that guarantees special status to the state "stands protected".

Notably, GST is a replacement to the taxes of excise, VAT and service tax on supply of goods and services. It's a tax system which is expected to bring uniform taxation across the country. 

Meanwhile, the most striking part of the GST row in the state was that general public was unmoved as they showed lukewarm response to anti-GST protest calendar. Why the general public almost ignored protest calls given by the trade and commerce community? Basically, Kashmir is a hot bed of profiteering where a huge chunk of business activities flourish at the behest of flirting with tax and pricing of products. They either evade tax or resort to double taxing, breaking the spine of consumers.

Here essential day to day expenses for food, light, transport, toddlers' education etc have soared by 30-50 per cent in the last couple of years. This increase when compared with the rise in income levels is much higher and confirms the uncontrolled cost of living. This never-seen- before price rise situation has squeezed saving opportunities of commoners and has even been steadily getting them poorer with every passing day.

Amid high cost of living, consumer spending has turned out an uncontrollable phenomenon. This situation has exposed consumers to a high risk territory of price exploitation.  It is usually found that the prices of consumer goods traded in the markets are settled arbitrarily by the seller with the wholehearted support of manufacturers, surprisingly that too well under the nose of authorities.

Ours is a place where it is very difficult for consumers to check whether retailers are actually charging the right amount of local taxes on the products they sell or they are overcharging. Let me quote a simple example of cold drinks, particularly the branded ones. Don't be surprised if you find different prices of a single brand in the same market. Just ask a simple question to yourself. How many times have you paid more than the maximum retail price (MRP) mentioned on the bottle while buying a cold drink or packaged water? If a medium size bottled drink, for example, is pegged at MRP of Rs.20, the retailer won't hesitate to charge you Rs 5 extra. The oft-used excuse by the retailer is that he's charging extra for cooling the product. Unfortunately, it is such a widely followed practice in Kashmir that most of us don't even bother to negotiate. 

Now, take the case of pharmaceutical trade in the state. Here the cost of medication is uncontrolled and drug dealers/retailers most of the time resort to profiteering. Even as you see cost of the medicine plainly displayed on its cover, the actual cost price of the drug remains invisible. It's wrapped in so many layers like maximum retail price (MRP) that almost no one understands what's really happening. The maximum retail price (MRP) printed on most of the drugs/ healthcare articles is already loaded with unbelievable margins ranging from 100 to 1000 percent!

Life-saving drugs, especially anti-cancer drugs stand nauseatingly overpriced to bring riches to the sellers and misfortune to the patients and their families. It's not just explosive cost of drugs, but the cost of  diagnostics including multiple scans, biopsy etc that drain out financial resources of a patient. The problem of differential pricing is quite visible. Every unit responsible for the pricing and distribution of anti-cancer drugs like stockists, retailers, carrying and forwarding agencies and other liaison agents are involved in the loot.

Meanwhile, GST regime is believed to plug the loopholes in the current trade practices. Under this regime, it is expected that the real values of goods will be declared with real quantification, which in turn can save common consumers from paying double tax and bring eradicate arbitrary pricing of goods and services. Most importantly, the state government should make anti-cancer drugs tax free as they have done in case of contraceptives.

(The views are of the author & not the institution he works for)

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