Mixed Results to GST Reform Push

 Visakhapatnam: Three days through implementation of the GST reforms, the port city of Visakhapatnam presented a mixed picture of compliance and consumer benefits. Price reductions are visible more in the automotive sector and less in the local markets.

Traders of essential commodities lagged behind in passing on the promised savings to consumers.

Vehicle showrooms across the city have seen a spurt in sales, also due to the festive offers. Two-wheeler sales witnessed a surge ahead of the Dussehra festival, with dealers prominently displaying new pricing based on the reduced GST rates.

N. Shashank, a software employee here, beamed, "I purchased a 350cc bike after the new slab was implemented. Before the new GST rules, the price of this bike was close to Rs 3 lakh, but now I got it for Rs 2.60 lakh." This meant a savings of Rs 40,000 due to the GST reduction on vehicles under 350cc capacity.

A manager of a two-wheeler showroom, which sells vehicles exclusively above 1,000cc capacity, said, "Almost all of our superbikes have been sold off earlier. The new GST rates for them are higher. These are charged at 40 per cent against the previous 31 per cent. Since our bikes cost above Rs 12 lakh, a 9 per cent increase costs the customer heavily. So, they rushed in and purchased the vehicles before the rules came into force."

The luxury car segment has seen substantial reductions. According to Sundarapu Kishore, who works at a private car dealership, "A luxury sedan priced at Rs 50 lakh that earlier attracted combined taxes of Rs 24 lakh will now face a single GST of Rs 20 lakh, saving buyers around Rs 4 lakh."

Despite the government's promise to make essential goods more affordable, implementation of the new rates in the retail sector has been patchy. Some dairy products have shown modest price reductions, with ghee dropping from Rs 630/kg to Rs 600/kg and paneer from Rs 400 to Rs 380/kg. However, many retailers continued their sales at previous rates.

Prabhu Naidu, distributor for a major retail chain, explained the delay: "We have seen changes in our application. We are selling items at new prices, but old stocks are sold at old rates. These are not being updated."

The tourism sector, crucial to Visakhapatnam's economy, gained little from the reforms. Vijay Mohan, president of the AP Tourism Forum, criticised the increase in GST on premium airline tickets from 12 per cent to 18 per cent, stating this would make premium travel more expensive.

"The biggest disappointment of GST reform has been for tour operators who actually drive tourism growth. There has been no relief as they continue to pay 18 per cent GST," Mohan added.