Nearly a month after the Goods and Services Tax was rolled out, temporary slump affects a majority of outlets in city, but most ready to wait it out 'for a better future'
After the implementation of demonetisation, we all remember the one common hurdle that faced us — be it a vegetable vendor or a private company employee, everyone had to stand in long lines at ATM kiosks.
Now, nearly a month after GST coming into play, the effect is a temporary slowdown in various industries, one that does not deter or worry the business owners as they remain confident of bouncing back once the lean period is over, as well as maintain their stand of GST being "for the greater good".
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With wholesalers not buying from scrap dealers, the latter say they will have to bear GST’s aftereffects. Representation pic
Scrap dealers
'Dhanda has been thanda for a month'
When mid-day visited scrap dealers in Kurla, most said GST had affected their business. Some said wholesalers weren't ready to buy scrap automobile and machinery parts from them for now. "Ours is not a big karobaar; we will have to bear whatever GST's consequences are," said Mohammad Javed Chaudhary, 60, owner of M J Scrap Corporation in Kurla, which has been around in the neighbourhood for the last two decades. "Yes, there has been a difference after GST has been rolled out; dhanda has been thanda for the last month, because when we buy scrap from people, we have to pay GST on it." According to him, the tax on scrap used to be around 4 per cent, which has now become 18 per cent. "That's a reasonable hike and makes people think twice."
Vaibhav Salvi, owner of Translink Express, at his office in Andheri. Pic/Satej Shinde
Courier companies
'Business will bounce back in sometime'
"The tax has increased from 15 per cent to 18. This has created misunderstanding among people," said Haresh Lalwani of Panther Worldwide Couriers, which primarily deals in international couriers. "Business-wise, yes, it has affected us, but it is better in the long run. Earlier, we used to get our goods from Bengaluru in five days; now, we get them in three, as there is no octroi."
According to Vaibhav Salvi, owner of Translink Express in Andheri, a company that deals with exporters who need to courier packages abroad, it's the changes in the paperwork, besides the fact that exports are down in general till exporters receive further clarity on GST, that has been affecting business. However, he too hailed GST as a "good and positive thing".
Bharat Chedda, owner of Rangeela Exports, at his shop in Zaveri Bazaar. Pic/Bipin Kokate
Jewellery market
Zaveri Bazaar sees 'blocked cashflow' over confusion regarding refund
When GST was being rolled out, people were staying away from jewellery shops, till rules got clearer. Now, there's a new problem for Zaveri Bazaar. "The new rules have come in at a fast pace for us; we were not aware of the kind of paperwork needed," said Bharat Chedda, owner of Rangeela Exports that has been dealing in wholesale export of imitation jewellery for 17 years. As per him, there have been changes in the documentation process, which has been affecting business. "One major change was that before July 1 all exports were done on H form, meaning there was no tax for imitation jewellery," he said. "The exporter was supposed to give the supplier the H form. But now, because the suppliers are charging GST, we have to pay it first and then get a refund from the government... But we don't know how we will be refunded." He, however, stood firmly by the implementation. "GST has opened up everyone's sense of working. Earlier, there was a lot of hanky-panky - some would refuse to sell on bill, insisting cash payment. Now, everybody has become straight. Soon, there will be clarity..." he added.
Garments & Textiles
'Just a procedural slowdown for now'
As per Raghunath MB, senior president (sales and marketing), Mafatlal Industries (Arvind Mafatlal Group), there has been a slowdown in the textile industry but not the garment sector. "Garments and yarn were taxed earlier. Hence, GST doesn't bother them. The issue is only for the textile industry, where there was no sales tax or excise for years. So, it was bound to cause some delay, as everyone was going to have take their GST numbers. It's a procedural slowdown..." he said. When asked for how long does he see the slowdown continuing, he added: "Another two months, till everyone gets their GST numbers in place. But GST isn't a bad move, because, at the end of the day, you've to benchmark all people on a common tax system."
The diamond market in Panchratna. File pic
Diamond traders
'No impact on us yet; will wait and watch'
A diamond trader mid-day spoke to, who exports mainly to Thailand and Hong Kong, and deals in wholesale, said, "There has been a slump in business, but it's not because of GST. Nearly 90 per cent of our business is cash-based, i.e. unofficial. That is one of the reasons why GST has had no real impact. But slowly, as and when people get into paying officially, we'll come to know what the actual effect of GST is." He also said the business model of the industry had improved marginally after GST's rollout. "Earlier, it (the diamond trade business) was 90 per cent cash-based; now, it has gone down to 70 per cent."
Rupesh Gandhi, owner of Pratap Brothers, at his shop in Zaveri Bazaar. Pic/Bipin Kokate
Precious Metals Meter
No takers for gold because of rebate
Rupesh Gandhi, owner of Pratap Brothers, an 80-year-old shop on Zaveri Bazaar road that deals in retail of precious metals, said consumer confusion existed in the first fortnight after GST. "People who want to buy gold are facing problem because of the rebate," he added. "When they buy gold locally, they have to pay GST, but there is no clarity on when they will get back this GST credit from the government. That's why they are hesitating to export as well." He pointed out that a significant jump in the tax rate had also adversely affected business. "The tax was 1.2 per cent earlier; now, it's 3 per cent, meaning those who come to buy gold and silver have to pay 1.8 per cent more." When does he see the industry bouncing back to normalcy? "It will take another six months... but we are ready."
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