Indians hit shops before sales tax rise

NEW DELHI: At a crowded New Delhi market plastered with posters announcing massive sales, shoppers were vacuuming up household gadgets and high-end electronics in the last days before India’s new sales tax takes effect.

The single, nationwide tax starting today replaces a complicated mix of state and federal taxes and will change the cost of nearly everything people buy.

In the Lajpat Nagar market, Nafees Ahmad scoured the stores for a new air-conditioner and LED television set with his wife and teenage son in tow.

“Our TV is fine. We did want to buy a new one, just not this soon,” he said with a smile as he checked prices at the Electronics Paradise store.

“But when the GST is applied everything will cost more so we decided to just go ahead and buy it now.”

India has debated such a tax for over a decade. While economists mostly agree a single, nationwide tax will streamline business, there are concerns how an economy as unwieldy as India’s will transition to a system that involves filing monthly tax returns online.

The government published lists last month of how almost every item, from toothbrushes to vehicles, will be taxed at rates of 5%, 12% or 28%. Businesses were ordered in January to adopt or upgrade cash registers and computers so they could comply with the changes before they took effect. – AP