One month of GST: Doing business more complicated than ever
Ambiguous rules,
multi-rate sales tax have left firms confused on how to price their products
LATEST
NEWS : Nationwide goods
and services tax (GST) was meant to unify the $2-trillion economy and
make it easier for companies to transact across state borders. Nearly a month
on, many are finding that doing business is more complicated than ever.
Ambiguous rules under the new,
multi-rate sales tax that went into effect on July 1 have left firms confused
on how to price their products. The tax's complex structure — four main rates
ranging from 5 to 28 per cent — has hurt sales and risks denting economic
growth and government revenues in the months ahead.
Airlines, for example, are
uncertain whether to tax premium economy seats as an economy or business class
— at rates of 5 percent or 12 per cent, respectively. Auto repair shops face a
similar quandary as GST rates vary for different jobs.
"People are either
overcharging or undercharging for their work," said Surinder Paul, who
runs one workshop in South Delhi.
Even computer maker HP Inc, which
is marketing a laptop product to help small businesses comply with the new tax,
is seeking clarity.
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