Prices of iPhones and cars, including luxury models like Audi and Jaguar, fell on Saturday as the country appeared to make a smooth transition to a new era of a single tax regime for goods and services. Indian auto and consumer goods companies welcomed the transition with price cuts on key products while industrial producers and consumers reported no glitches in the transition. Footfalls in malls and retail showrooms were normal though prepaid phone customers experienced some hiccups due to confusion on taxes.India inaugurated a new goods and services tax structure from July 1, shedding a complex, multiple-tax system in favour of a simple, unified one. The country will have five-tax slabs instead of a plethora of state, local and national taxes. Carmakers were the first to respond after the GST rollout , announcing price cuts on key luxury and basic car models. Meanwhile retail showrooms like Big Bazaar held a midnight sale. The Indian luxury car market is set to get a big boost as prices have become cheaper by 5-10%. Carmakers such as Mercedes-Benz, BMW, Audi and JLR are passing on the benefits by cutting Rs 70,000-10 lakh for top of the line models.Tata Motors-owned Jaguar Land Rover was the first off the mark on Saturday, with large advertisements announcing its aggressive prices. But these benefits are only on models that are locally assembled. Vehicles imported as completely built units will see price increase of 1-2% while hybrid car prices will shoot up by 13-23%. BMW i8, which is imported as well as hybrid, will see a price increase of Rs 48 lakh, whereas cars like Toyota Camry will see a rise of Rs 4-6 lakh Roland Folger, MD, Mercedes-Benz India, said he is looking forward to this simplified tax structure which will create a single market across India and benefit both the buyer and the seller.India's largest carmaker Maruti Suzuki India said the company is passing on the entire benefit of GST rates on vehicles to customers. The ex-showroom prices of Maruti Suzuki models have come down by up to 3% from July 1. "The rate of reduction varies across locations depending on the VAT rates applicable prior to GST," the company said. The ex-showroom price of Alto in Bengaluru has come down by Rs 2,300-5,400, WagonR by Rs 5,300-8,300, Swift by Rs 6,700-10,700, Celerio by Rs 5,900-8,700, Baleno by Rs 6,600-13,100, DZire by Rs 8,100-15,100, Ertiga (petrol) by Rs 12,300-21,800, Ciaz (petrol) by Rs 13,200-23,400, Vitara Brezza by Rs 10,400-14,700 and S Cross by Rs 17,700-21,300. Due to the withdrawal of tax concessions on mild hybrid vehicles, prices of Smart Hybrid Ciaz Diesel and Smart Hybrid Ertiga Diesel have increased.Apple slashed prices of all iPhone models by 4-7.5%. According to its website, iPhone 7 Plus with 256 GB storage which cost Rs 92,000, will now cost Rs 85,400. The iPhone 6s starting variant of 32 GB will be available for Rs 46,900, a markdown of 6.2%. The iPhone SE, which is being made in Bengaluru by Wistron Corp, has become cheaper by at least 4%, with prices of the 32GB model down to Rs 26,000 from Rs 27,200. The 128 GB version now comes cheaper by 6% at Rs 35,000. Future Group claimed that over 1 lakh customers thronged its outlets to generate about Rs 10 crore sales in two hours from Friday midnight. "The response was unbelievable and it was similar to our Republic day mega sale event that we started last decade. We will continue to lower prices over the next few days," said Kishore Biyani, chief executive of Future Group, which runs the Big Bazaar, EasyDay and Nilgiris supermarket chains.Hindustan Unilever, India's biggest consumer goods firm, announced a few changes such as increasing the grammage on Dove bathing bar by 33%, reducing prices of Rin bar 250 g from Rs 18 to Rs 15 and increasing the weight of Surf Excel bar Rs 10 pack from 95 g to 105 g. Retail showrooms, malls and restaurants reported normal business and footfalls. Rajendra Kalkar, president (west) at Palladium and High Street Phoenix malls in Mumbai, said the transition to GST was smooth. ¡§Except one or two retailers, all stores opened on time today. They updated their software last night.Kirana stores across Delhi said business was as usual on day one after the implementation of GST. "There will be changes in the price of some products but we are waiting for new stock to come in which will have new MRP printed in them," said a store owner in East Delhi. Most retailers, including food courts shut stores early on Friday to update their software systems. Roshan Banan, MD, Ocean Pearl Hotels which runs the Sagar Ratna and Swagath chain of restaurants, said nothing has changed and it was business as usual. Outlets like Dunkin Donuts said footfalls were like on any other weekend. Rahul Singh, founder and CEO of the Beer Cafe, said that while food business gains from the move, liquor prices will go up by 15% for consumers.Online marketplaces may see a temporary blip in sales as sellers without GST registration drop off. Also, sellers who enjoyed zero VAT in states like UP may drop out due to new taxes. A Flipkart executive said some sellers will leave and there may be a temporary drop in the choices available to consumers. Digitisaton has helped calibrate systems for perishable commodities. Heritage Foods, a business run by Andhra Pradesh CM N Chandrababu Naidu, has already passed on benefits on input tax credit on products like ghee and butter and has decided to absorb higher taxes on frozen dessert and ice cream.Industrial producers like steel firms and construction companies spent the weekend tweaking the system as business transactions are high on weekdays. Theatre owners in Tamil Nadu are aggrieved lot as entertainment tax has been increased. They have called for a strike as local entertainment tax of 30% is levied on top of the GST rate of 28%.At 12.30 am on Saturday, it is business as usual at Singhu near Sonepat bordering Delhi and Haryana. Vehicles have halted on the border, queued up at the state transport department kiosk to pay entry tax; truckers are not taking risks and have procured behti, a consignment note that’s needed if the journey from one state to another passes through a third state. There’s no fee for procuring a behti — which is like a gate-pass — but brokers usually charge Rs 50-100. The border is less than 50 km away from Parliament where GST was launched at a midnight event attended by President Pranab Mukherjee, Vice-President Hamid Ansari and Prime Minister Narendra Modi, among others. Modi termed it as Good and Simple Tax, emphasising on free movement of goods across state borders.At Singhu state border, the man collecting entry fees for Haryana and handing out receipts said: “We have no idea whether we will continue to collect this tax after GST. Till now, we have received no instructions to stop collection.” About 100 metres from his booth, two lathi-wielding boys were verifying whether state border tax was paid or not. According to the Ministry of Finance, states are allowed to collect only electricity duty, mandi fee, property tax and state stamp duties post GST rollout (and levies on petroleum products and alcohol, temporarily). The Centre can continue to collect the following: taxes on income, wealth or gifts, central stamp duties, clean environment cess, excise on tobacco and tobacco products, terminal taxes on goods or passengers carried by railway, sea or air, taxes on railway fares and freights, and oil industries development act cess (OIDB Cess).If that is indeed how the post-GST scenario should be, there should be near-zero activity at inter-state border points across India. The check posts or naka, as they are called by truckers, should be physically dismantled to drive home the point that inter-state borders have turned meaningless with GST. Perhaps the only reason to persist with nakas is to collect road permit taxes from tourist vehicles moving from one state to the other. If Singhu is towards the north of Delhi, it’s at Mohan Nagar on Delhi-UP border where the east-bound trucks stop to procure their behti. At 2 am on Saturday, the 24x7 dhabas at Mohan Nagar are buzzing with activity. “I don’t know about GST but I can’t take a risk by not procuring the behti,” says truck driver Arvind Kumar, before continuing his journey to Rudrapur, Uttarakhand. Says driver Pappu Ram Saini on Haryana border: “I have driven trucks for 10 years. At many borders, the wait — sometimes for 5 hours or more — kills you.” It shouldn’t, now.GST was always viewed as a game-changer, a big-bang reform and a historic event. Our PM’s message was: One Nation, One Tax. Instead we have created a compromised GST, which seems to have been arrived at to appease states in order to assure revenue neutrality. GST across the world is viewed as a flat tax on all transactions. For example, Singapore, which has a flat 7%, or the United Kingdom with a standard 20% rate. The moment we deviate from this concept by introducing a multi-tiered tax structure and by parking a number of sectors like petroleum products, real estate, tobacco, alcohol out of GST, we are not reaping the true benefit.I wish the GST panel had paid greater attention to the potential challenges, and apprehensions of small businesses and traders. Large corporations will certainly be fully geared for a smooth rollout of GST but I am not sure if small businesses are fully prepared. Having said that, we should not delay and seek perfection, as the main objective should be to get started and anticipate teething problems and fix them as we go along.It is gratifying to note that the Ministry of Finance itself has admitted that, ideally, we should aim for a two-slab GST, which it believes will take two years to get to. This is too long a time for our economy to wait for. I believe we are potentially losing out on a golden opportunity to boost the economy, investments and GDP growth. The present GST may not move the economic growth needle to the extent it should have.On the morning after the historic rollout of GST at midnight, it’s not business as usual at Sadar Bazar in Old Delhi, one of Asia’s largest wholesale markets. The cluster of 43 smaller markets witnesses huge volumes of trading in goods as diverse as household items, utensils, toys, jewellery, cosmetics, stationery and timber, and is host to at least 4,000 traders. On Friday, the market was shut (along with many others across India) as a mark of protest by the various traders’ associations against issues like 28% top taxation slab and the increased amount of paperwork that will now be required of even very small traders and shop owners.Nothing much has changed by Saturday as Ram Singh, an autorickshaw driver who hasn’t found any commuters since morning from Sadar Bazar, points out. Rakesh Kumar Yadav, president of the Federation of Sadar Bazar Trades Association (FESTA) and proprietor of Samrat Plastic Udyog, is worried. “The software service provider Tally has not been able to load the GST upgraded system on any of our computers. Our association has been organising training sessions and workshops across this market, but there seems to be a lack of clarity among the officials of the IT service provider and no one really knows how to operate the new system,” he says.In pic: Traders worry about the cost of going onlineThe other problem that businesses at Sadar Bazar are facing on Saturday is that they haven’t been able to print new bill books and invoices because guidelines for the new format have not yet reached them. This problem has cropped up despite most traders having registered themselves with the GST network. In the absence of documents, business owners are unable to either issue receipts to customers or get invoices from suppliers. “The temporary solution is to keep the records and issue the documents later. The market is operating on personal trust between buyers and sellers,”says Kumar. Further, goods from Sadar Bazar are supplied across India, but till Saturday evening, traders have no clarity on how inter-state billing is done.Raj Kumar Sapra, who sells hair accessories, says, “Only 5-7% shops in this market uses computers. We have been doing all our accounts manually and many establishments are too small for computers. Besides, we haven’t yet been able to print new GST bill books because of lack of proper guidelines.” Sudhir Jain is the general secretary of FESTA and runs a stainless steel utensils business, RR Steels. He says the upgrade to GST software could take 10-15 days for larger businesses and is not really the problem. The challenge, he says, will be faced by smaller traders who will have to dish out Rs 5,000-10,000 monthly to make the transition from a manual system to an online one in keeping with GST guidelines.It’s 3 pm at Dagina Bazaar, the busiest lane in the heart of Mumbai’s Zaveri Bazaar. The 60-odd jewellery shops have been open for business for four hours now, but there are not many customers walking in. The smooth-talking sethjis of these shops have settled on their high-backed chairs, their eyes cast on the narrow road for prospective customers. This Saturday is no different from yesterday, or the day before. Barring a few enquiries and some minor purchases, it is going to be a long futile wait till 8 pm, when stocks are tallied and shutters downed. Buyers have stayed away from jewellery shops in the run-up to GST.“Business has been dull for over two weeks now. People are not sure how GST will affect them. Besides, this is not a jewellery-buying season,” says Anil Jain, owner of R Pukhraj & Co, a jewellery wholesaler at Zaveri Bazaar. “Jewellers, for their part, have cut their stocks. They are waiting for some more clarity on the new taxation regime. The general feeling is that gold demand will fall over the next two-three months. It may gather steam only after Raksha Bandhan, and firm up during Navratri,” predicts Jain.On Saturday, a few hours past GST rollout – gold and bullion was trending (intra-day) at Rs 28,400 per 10 grams in Mumbai market. GST, per se, has not impacted gold prices much, but it has made the yellow metal a wee bit expensive for end-customers. Tax rate on gold has moved up from 1% to 3% under GST. This mark-up in tax would be added to the final purchase bill handed to customers. So, if you had bought a 10 gram gold coin on Saturday, you would be required to pay Rs 29,350 — about Rs 500 more than what you would have paid in pre-GST regime. For a 50 gram coin, you may have to shell out over Rs 2,500 as GST.“The GST payout will go up in tandem with the quantity of gold you buy,” says Inder Jain, president, Shri Mumbadevi Dagina Bazaar Association. “But price rise will not discourage people from buying gold jewellery. They will still buy, irrespective of the price or the taxation,” says Inder, who is also the promoter of Umedmal Tilokchand Zaveri, one of the oldest jewellery shops in Zaveri Bazaar. Some large shop owners have started barcoding their stock; a few older members are trying to change their accounts — from traditional red cloth-bound chopda books to computers. Only 20% of Zaveri Bazaar shops have computerised their accounting system. “Now everything needs to be done on a computer,” guffaws a small shop owner. Zaveri Bazaar is taking it easy for now, in anticipation of better days ahead.Kolkata woke up to heavy rains, a midseason sale and a new tax regime on Saturday. The rain couldn’t deter Kolkatans who were in the mood to try out the new GST prices. While New Market spilled over with shoppers curious about how their bills looked with the new taxes, malls had serpentine queues of people waiting to paying their first share of Goods and Services Tax. The buoyant mood has not infected the traders. Ajay Kumar Shau, proprietor of The Royal Store in New Market, says, “Earlier, we used to pay around 14.5% tax on cosmetics. Now it will be 18 %, and 28% on some high-end products. However, we would bearing the difference as we cannot pass it on to our customers. We are waiting for products with revised prices.”In pic: A showroom in Kolkata on SaturdayMahesh Singhania, chairman, All India Federation of West Bengal Trades Association, says, “The traders are confused. They are in a dilemma. Burrabazzar, which has 20,000 traders, used to deal in cash earlier and now they are shifting to a brand new system of taxation. The traders are badly hit since they never dealt with this system. We will wait for few days to see how things take shape.” Panic-struck Kolkatans also stocked up on medicines, fearing that GST would affect the prices. Arnab Sadhuka, proprietor of Central Medical Hall in Dharmatala area, says it would take at least a week for the situation to normalise. “Our regular customers have bought extra medicine. So there is a little problem with stock. Also, we would not be able to offer the informal 10% discount we gave our customers,” he says.On the first day of GST, at Belan Ganj Square in the heart of Agra, some 200 traders are waiting for the arrival of — not GST — but its bier. They cart the “body” of the “infant GST” to a shamshan ghat to mark their protest. “GST is a premature baby whose chances of survival are nil. Hence, we will burn it on the cremation grounds,” says TN Agarwal, president of the Agra Trade Council, as others join in the procession to the ghat.Agarwal says that 5% GST on textiles, which were not taxed earlier, will affect the industry and lead to the revival of inspector raj: “Everyone needs roti-kapda-makan. Sarkar kapde par nahi, kafan par bhi karr laga rahi hai (It is not just a tax on textile but also on the pall).” The Agra Trade Council was formed in 2000 in protest against another tax, the VAT. Several small traders say that since they work on small margins, of 2-3%, GST and the procedure to maintain accounts are a double whammy. “Roughly 80% of cloth traders earn about Rs 20,000 a month. We are not capable of paying a hefty fee to accountants,” says Om Prakash Gupta, a trader.In pic: Traders down shutters to protest GSTSanjay Agarwal, president, Agra Cloth Mercantile Association, says they have taken a unanimous decision that no businessman will do the mandatory registration for GST. “Cloth is a basic requirement of every citizen and its sale and purchase must be tax-free. We have formed a GST Sangarsh Samiti that will keep fighting for the cause. If the government does not address our demands, we will go on an indefinite strike,” says Sanjay, who has a fabric firm, Mitthan Lal & Co, with an annual turnover of Rs 8 crore.The footwear industry in Agra, too, is reeling from GST pressure. At Heeng ki Mandi, a wholesale market for leather shoes, Mohanlal Jhamnani, owner of Sunil Shoe Company, says the poor will get poorer with GST. “We source our products from marginal workers who make shoes at their homes. Will they get themselves registered for GSTN? Since we will not be able to purchase from them, who will they sell their shoes to? Is this not an anti-poor move?” GST on footwear below Rs 500 is 5%, and for the rest it is 18% . Says Gaagan Dass Ramani, president of Agra Shoe Factors Federation: “Shoes are a basic need… they must not be charged more than 12% tax. Secondly, the mandatory embossing of price on every footwear must be dropped. Agra produces handmade shoes, unlike Kanpur or other places that use machines. How will a shoemaker who works at home put uniform embossing on every shoe?”In pic: Verma is worried about 28% tax on marbleThe handicraft market at Gokulpura is shut as well, protesting against 12% GST for handicraft products, going up to 28% in some categories such as marble and stone. “It’s exorbitant,” says Sunil Kumar Verma, president of Agra Marble Stone Grah Udyog Samiti and owner of Agra Marble Stone Company. “Already our outbound orders have dried up. We have zero orders since May 1 when we started intimating our foreign clients about the new tax rate. Also, most of the workers from whom we source items are poor, unregistered workers. Since they will not register for GSTN, we can’t source goods from them. How will they run their families?” asks Verma, who sources items from 500 small artisans. Agra MP Ram Shankar Katheria’s advice is cold comfort for traders: “I appeal to the traders to maintain trust in GST and the prime minister. The country, merchants and consumers — all will benefit in the long run).” On being asked about the levy of 28% items on certain handicrafts, he says: “I agree that the levy on handicraft items could have been lower. But the traders must wait for some time rather than get scared by the tax.”On Saturday, all business establishments in Kashmir were shut in protest against the proposed implementation of GST in the state. Interstate trade has ground to a halt, and all leading distributors and stockists in the Valley are not billing. They say they will not do so until there is clarity about the new tax regime. This may trigger a short-term shortage of essentials in the state and result in a temporary price rise. Even though the state excise and taxation department has issued online IDs and passwords to businessmen to register under GST, the nuts and bolts of the new tax are not a priority for now. The turn of events next week would be crucial for the state. The J&K government has called for a special assembly session from July 4, when they expect to fix everything regarding GST. They expect to approve a “modified GST” and send it for the president’s approval immediately.Apparently, Chief Minister Mehbooba Mufti wants to ensure that everyone is on board to avoid a situation snowballing into a crisis for her government. Rahim Rather, National Conference leader who has also been the chairman of the empowered committee for GST, maintained that the government couldn’t convince them regarding the new tax regime. He said the government could not detail the safeguards incorporated, and instead provided just vague one-line assurances.“Many in the government were of the opinion that we should not go to the assembly. However, we wanted to consult and get recommendations from everybody. Kashmir is a fragile society. Here anything and everything is political,” said J&K Finance Minister Haseeb Drabu, who expects to implement GST in Kashmir in the first week of July. He has reiterated that the special GST for the state won’t disturb the status quo of the state in any form. “We have stopped billing, which could trigger a shortage of essentials. We don’t know whether we can continue under VAT or not. However, we expect some clarity on this in a week,” Mukhtar Ahmad, one of the leading importers of FMCG products in Kashmir, told ET Magazine.In pic: Traders protest in SrinagarThe largest conglomerate of businesses in Valley, the Kashmir Chamber of Commerce and Industries, has opposed the implementation of GST in its current form. The Traders and Manufacturers Federation and the Kashmir Economic Alliance, which called for Saturday’s strike, termed GST a direct threat to the identity of J&K.For most of the six years since it was founded, ClearTax was just another startup focused on helping people file their IT returns. Everything changed in June last year when it became one of the Assistant Service Providers (ASPs), entities that can offer GST returns-filing tools and services in collaboration with the GST Suvidha Providers (GSPs). Preparations for D-day began last June. “We ramped up our team in June 2016 and brought more hands on board to deal with the new requirements by September,” says Archit Gupta, founder, ClearTax. By the time the Model GST Law was passed in November, ClearTax had already begun working towards building ready-to-use products as well as sharing information and creating awareness among the business community.ClearTax, claims Gupta, has helped over 1 lakh businesses become GST-compliant so far. It has also partnered with Amazon to help sellers on the ecommerce platform become GST-ready. While ClearTax BillBook, the GST invoicing solution, is free, the company will make money from software to file returns. Gupta is now working to roll out GST e-learning material in 20 regional languages, including Kannada, Bangla, Tamil and Telugu. The opportunity, clearly, is massive. According to some estimates, SMEs will spend a staggering Rs 35,000 crore over the next two years in getting equipped with software and compliances related to GST.Such numbers are music to the ears of Praveen Dhabhai, chief operating officer of mobile wallet brand Payworld, one of the 34 GSPs along with Tata Consultancy Services, Deloitte, EY and Tally Solutions. Dispelling rumours about GST, tackling scepticism among small merchants and preparing them for the GST rollout have kept Dhabhai busy. “Over the last few months, we have educated over 50,000 traders across 90 towns about GST,” he claims.While the training has been free, the money will start pouring in when tax filing begins in two months. With a presence in over 630 cities, and 80,000 villages across 23 states, the startup plans to leverage its reach to make the most of the GST rollout. Payworld has opened over 1,500 GSP kendras (centres) to make traders GST-ready and plans to take the number to 45,000 by the end of this year, says Dhabhai.