If demonetisation is considered the biggest blunder of the BJP-led NDA government by the business community in Punjab, finally the “smooth run” of goods and services tax (GST) seems to have provided much-needed relief. No wonder, there seems to be a pro-Modi sentiment in urban and industrial pockets of Punjab. Since these two policies have had a direct bearing on the lives of people, it is a major poll issue here. The rich and powerful have moved on and hail the GST, having initially borne the brunt of demonetisation in 2016-17. Here, it is only the trade which ran “out of the books” that is unhappy with the implementation of GST, especially those involved in real estate business.
Take the case of Prince, who runs a grocery store on Dhandran Road in Ludhiana. Till January 2017, he and his brother ran a dyeing unit in Ludhiana. Hit by demonetisation, their small labour intensive and running largely on cash unit, was shut within three months. “We had no option but to sell the assets and start afresh. I now run this store, and with the implementation of GST, I am at ease in running my business. It is for this reason that you will find a strong Modi wave here,” he says. In Mandi Gobindgarh, the revival of steel industry furnaces as well as the steel rolling mills is attributed as much to the cheaper power supplied by the state’s Congress government (power is a major input and the Congress government provides power at Rs 5 per unit ), as is the implementation of GST.
Mahinder Pal Gupta, who runs an induction furnace here, says that GST has increased ease of doing business. “Earlier, we had to pay 16% excise duty and 4% CST (Central Sales Tax). We used to get rebate on excise duty but 4% CST was non-refundable, which was a loss for us. Now there is 18% GST (single tax) and we get refunds for entire 18% GST paid. It is a huge relief. Both the buyer and seller are getting maximum benefit from GST and business has grown”, Gupta says. His views are seconded by Upkar Singh Ahuja, who runs a steel manufacturing unit in Ludhiana. “Because of the CST and VAT, the goods sent from here to other parts of the country were higher in cost by 2%. With GST, we finally have a competitive edge,” he says. He, however, hopes for more rationalisation in tax, giving the logic that it will bring more people in the tax net.