One month of GST: Doing business more complicated than ever

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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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