Economy

One tax, different impact: how shoppers coped with GST

Our Bureaus July 2 | Updated on January 11, 2018 Published on July 02, 2017

Prices of goods have gone up in some cities but in others they have dipped or remained unchanged   -  INDRANIL MUKHERJEE

A peep into shopping baskets across India reveals a mixed bag of sentiments about the goods and services tax

It may be one nation, one tax, but the story pouring in from various centres is one of different impact in different cities — or at least, differing perceptions.

While diners in Delhi said eating out had become cheaper, many in Chennai and Bengaluru said they had been hit by higher prices.

From groceries to medicines, when BL reporters fanned out to peep into shopping baskets of customers, they heard contradictory experiences. In Kolkata retired septuagenarian Kali Shankar Das was dreading a visit to the local market on Sunday, but was relieved to see no change in prices in vegetables.

Tapati Sinha, a 32-year-old working mom, who shops for her groceries every fortnight at organised retailers like Spencers or Big Bazaar felt she had come away spending less.

“I went to Big Bazaar on Saturday. On an average I shop for around ₹2,000 which include groceries, baby food and some cosmetics. On Saturday there were discounts running on some products and bundling offers so I ended up paying a bit less,” she said.

On the other hand, in South Mumbai, Amrita Ghosh, felt there was an increase in the overall payout in her shopping over the weekend. She also grumbled that she could not figure out her bill.

“Earlier it was a flat tax rate on the total bill now there are various slabs for different items,” she said, showing her receipt which had six lines detailing the tax charges.

In Mumbai, as an experiment, BusinessLine staffers purchased five different items on two different days from the same shop before GST kicked in and after the new tax regime came into place.

On June 29, purchase of juice, bread, salt, chana dal and oil cost ₹468, including ₹13.24 as tax.

The same items on July 2 attracted a GST of ₹26.06, yet surprisingly the total bill amount was the same, revealing that while tax was higher, prices of some items may have dropped.

In Delhi, Shruthi Mithal, a regular shopper on online grocery store Big Basket, compared her buys in June with her purchase on July 2 and said she did not notice any impact.

On the other hand, in Chennai, when Meenakshi M went grocery shopping at an offline retail outlet on Sunday, she found that the idli-dosa batter usually available for ₹34 for 800 gm had become ₹38 after GST implementation.

Meenakshi said she paid more for her usual branded shampoo, talcum powder and chocolate drink. However, other products like toothpaste, brushes, scrubbers and soaps were cheaper, since they are in 18 per cent tax bracket now as opposed to 22 per cent earlier.

Hogging attention

Going by the deluge of Whatsapp forwards of restaurant bills from all over the country, India appeared to be obsessed with finding out how eating out would change. A very mixed picture emerged.

In Delhi, Shalu Jain shared that her family dined at their favourite haunt United Coffee House on Saturday and felt the bill was lighter than usual. On the other hand, Chennai resident Arvind Rangachari cribbed about the tax of ₹400 he was presented with on a bill of ₹1,480 when he went eating out with his friends.

In Bengaluru, Sakshi Mallappa and her two friends Vinita and Sumana who catch up every weekend at an Indiranagar park for a brisk morning walk followed by breakfast at Adyar Ananda Bhavan reported paying more for their regular fare of masala dosas and coffee. Instead of the usual ₹318, they ended up paying ₹354.

The variation across cities may be explained by the difference in VAT that was earlier levied across States, with the States where higher VAT levied reporting lowered costs now.

A bitter pill

Many householders fear that their medicine costs will go up in the GST regime as several pharma products are moving from 5 per cent to 12 per cent slab under new regime and health supplements from 12 per cent to 18 per cent.

But more than prices it was availability that was hit this weekend. At Fame Balaji Medical store in Bengaluru, the proprietor KS Naveen had to turn away customers seeking life saving drugs like Revolad (anti-cancer), which costs a little over ₹3,000 for a strip of 20 tablets. “Distributors have stopped supplying as they wanted to maintain zero stocks before GST kicked in and we have no fresh stocks of medicines,” he said. He said he did not have Acucal Calcium tablets which a pregnant customer asked for.

“We have not been given the GST Bill format yet. I have called the Call Centre a hundred times over the last three days but, they still haven’t responded,” he said.

At Guardian Pharmacy in an East Delhi neighbourhood, customers said they saw no price difference yet.

According to the proprietor Dinesh Doval, since he was still selling old stock, the difference was not felt on Sunday.

“It will be some days before I can really share how much price impact there will be, “ he said, adding that some manufacturers could reduce prices as well.

Householders felt that it would take a few months before they would be able to figure out the overall impact on their monthly budget since services like telecom and insurance had gone up whereas there was a dip in prices of some products.

Bengaluru resident Sharanya Raghunath felt that while her grocery bills appeared similar to before, her gym membership had gone up by ₹200 this month. But she said she would not be really changing her lifestyle as such – a sentiment shared by most people BusinessLine spoke to.

(Abhishek Law in Kolkata, Sangeetha Chengappa in Bengaluru, Swathi Moorthy in Chennai and Urvashi Valech in Mumbai contributed to this report)

Published on July 02, 2017

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill.

In these difficult times, we, at BusinessLine, are trying our best to ensure the newspaper reaches your hands every day. You can also access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all our readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. You can help us by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section.

Our subscriptions start as low as Rs 199/- per month. A yearly package costs just Rs. 999 – a mere Rs 2.75 per day, less than a third the price of a cup of roadside chai..

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
null
This article is closed for comments.
Please Email the Editor