Goods and Services Tax bill is now a reality. The government has received industry specific requests to address some of the issues as they are finding it difficult to deal with the changes proposed under the new indirect tax regime. But some trade bodies in Tamil Nadu are lobbying for a further delay in GST rollout as small and Medium Businesses(SMBs) are yet to adopt the changes required for a smooth transition. The selling prices of electrical goods will increase by 10-15% after the implementation of GST affecting traders and customers. Taxing it at 28% is making it difficult for traders to survive and sustain according to traders. Under the GST, electrical goods will be taxed at 28% as it has been classified as a luxury item. While the electrical raw materials are taxed at 18%, the finished goods are placed in the highest tax bracket of 28%.
Talking to The DQ Week, N R Pannicker of Accel Limited states that, “The increase in operating cost and selling price is likely to have a cascading effect affecting both the small and medium traders and customers. 28% tax is making it difficult for us to sustain in market.
“We expect more effort and involvement from our association META (Madras electronic trade association) although it has opposed the manner 28% Tax is imposed on electronic traders.” He adds further. Nirmal S Bohra of Bohra Technology says, “28% Tax is making it tough to survive in the business as we will be in a big loss. There are several anomalies in the GST as far as electrical goods industry is concerned that has to be addressed on priority basis.”