SRINAGAR: While J&K used the GST to offer a one-time education that J&K state is the only state in India with special position and exclusive constitutional rights, the new tax regime has started hitting the economy. For the second day on Sunday, the Toll Box at Lakhanpur remained deserted, by and large.
“By an average 2200 truck loads get into the state every 24 hours,” a senior officer in the Taxation department of the state told Kashmir Life. “In the first 24 hour after the GST was implemented, we have 1500 trucks getting into the state.”
On day 2, the officer said, “around 400 trucks have crossed the Post till 5 pm.”
The officer said that these trucks which are getting into the state are carrying goods sold before June 30. “They are all carrying the VAT bills and some of them were in transit,” the officer said. “We expect these trucks also stopping within a day or two.” He said the first truck with a GST bill is yet to be found around the J&K gateway. “Even if it comes, how we will handle it in absence of GST, we will only use the existing law, the VAT,” he added.
The outbound traffic is almost the same. “Normally, 1800 trucks leave J&K every 24 hours and most of them are empty but almost 400 trucks are loaded,” the officer said. “We witness a 30 percent dip in the number of loaded trucks moving out.”
There is no GST on agriculture and horticulture products but the season is not of fruits right now.
With the GST yet to go to the assembly for discussion and final legislative consensus, it is expected to take a few more days. Though the traders says they can manage with the existing stocks for a few weeks, nobody knows if its drags on.
J&K is a huge consumption economy that relies on plains almost for everything. Most of the taxable goods supplied to the larger economy in mainland India are manufactured in Jammu. While some of the industrial units have started building their entry and exhausting their raw material, some of them have simply closed for a few days. BJP in Jammu, is under intense pressure to get the GST implemented or otherwise it can trigger serious labour issues.
Interestingly, most of the FMCG MNCs and the car makers have stopped supplies to J&K. There has not been any billing for J&K since June 21. This was done to exhaust the stocks.
In the meanwhile, the GST has started impacting the price line. Most of the cars in at least first four segments across all brands have gone cheaper. All the car makers have announced their new price lines after GST and most of the segments are cheaper.