Traders cautious in Azadpur mandi, markets in Old Delhi shut in protest against GST

Hours before India switches over to goods and services tax (GST) that promises to clean up a chaotic jumble of indirect taxes into a neat single levy, two of India’s largest wholesale and retail markets wore contrasting looks.

Azadpur mandi in North Delhi, which counts to be the Asia’s largest wholesale fruits and vegetable market, was a picture of ‘business-as-usual’, seemingly ready to crossover to GST on July 1, without much fuss.

Barely twelve kilometres south-east of Azadpur, a palpable anxiety was visible in the by lanes of Old Delhi—Chandni Chowk, Khari Baoli, Mori Gate, Lahori Gate. Traders shuttered down their shops to protest against GST, begging the question whether the new tax system will impact bulk buyers and retailers in opposing ways.

Azadpur Mandi

Hundreds of tonnes of fruits and vegetables were unloaded from lines of lorries with a degree of routine monotony as retailers bargained with wholesalers for a good deal braving a persistent monsoon drizzle.

Fresh fruits and vegetables have been exempt and will attract zero or `Nil’ GST, which probably explains the indifference.

“There is not much effect of the GST on the business. We are just paying the usual one percent mandi tax. Even tomorrow it will be the same,” Gautam, a fruit wholesaler, said.

Demonetisation, the sudden decision to outlaw Rs 500 and Rs 1000 notes in November, appears to have left deeper wounds in the mandi where transactions worth hundreds of crores of rupees take place every day.

“Post-demonetisation the market has not picked up. Even during the Ramzan, usually when the market is on fire, this year it was lacklustre,” said Gautam, whose firm Shiv Shakti Fruit Company trades in fruits and related products.

Watch: Another Tryst With Destiny! How GST Will Change Your Life After July 1

Business on the vegetable side of the market, however, was less brisk.

“Not sure if it is the effect of the GST, but today there are not enough customers. I am clearing my stocks at lesser rates. The profit margin has gone down in the last few days,” said Rahul who trades green vegetable in the 76-acre market.

There was curiosity and a tinge of worry over the provisions of the GST. “I don’t know much about the GST or how it works,” Rahul said.

Devar, a trader who deals in onions and potato, was anxious about GST’s possible adverse impact as the new system unfolds. “Aaj to kuchh asar nhi hai kal ka kal dekhenge (Today, there may not be much effect, let’s see what happens tomorrow).” Umesh, another potato trader echoed Devar’s sentiments.

Old Delhi

In the by lanes of old Delhi, the routine bustle’s absence is hard to miss. Hundreds of shops often teeming with tens of customers haggling over sarees to shoes were shut protesting against the GST’s roll out in the current form.

The Delhi Hindustan Mercantile Association extended their ongoing bandh of three days against the GST by another day.

“I come from Shastri Park. The owner of the shop did not inform me about the todays strike. While coming here I saw shops in Mori gate, Lahori gate and Khari Baoli—all shut,” Hari Om, a worker in one of the saree shops in Chandni Chowk, said. “People from association are enforcing the strike everywhere,” he added.

The bandh was initially declared by the All-India Textile Association against levying of GST on textiles and cloth, which were tax-free until now. The strike call later got support from other trade unions active in the Old Delhi area.

There were a few traders though who kept their shops open defying the bandh call.

“No, there is not much effect. Government had given enough time to clear the stock,” Ashish Walia, the owner of one such shop, Bahuji Shoes, said,

“This would certainly affect the business. How will a buyer pay Rs 20,000 tax on the purchase of Rs 1 lakh,” said Laxmi Narayan, the owner of Anand Dry Fruits near Khari Baoli, criticising the tax regime. “We will certainly see a drop in the number of customers within two-three days,” the septuagenarian said.