Tuesday, July 23, 2019

Posted at: Sep 15, 2018, 1:14 AM; last updated: Sep 15, 2018, 1:14 AM (IST)

Online shopping craze hits local shopkeepers hard

Sales drop, intricacies of GST forcing them to wind up

Bhanu P Lohumi

Tribune News Service

Shimla, September 14

The increasing craze for online shopping, especially among youth, coupled with demonetisation and intricacies of GST has hit shopkeepers hard as their sales have dropped by 50 per cent during the past two years.

As a fallout of this new trend, shopkeepers are winding up their establishments by renting out their premises to companies selling branded items. A large number of shopkeepers on the Mall Road are now acting as franchise of big companies or renting out their premises, while about 24 shopkeepers are waiting to wind up their business and looking for big corporate houses to hire their premises.

“There is no business, profit margins have reduced drastically and the complexities of GST has become a bane for small shop owners. The lack of parking facility is driving people to shop on the outskirts. Renting shops to big companies is a much better alternative,” Inderjeet Singh, president, Veopar Mandal Shimla, said.

“We have to pay overhead expenditures on employees, rent and payment of electricity water and other maintenance charges. We cannot match the huge discounts offered by online shopping sites which are attracting customers who are getting cheaper goods at their doorsteps. Online shopping is thriving at the cost of local businessmen,” he added.

“The situation has become so pathetic that even reputed shopkeepers are selling their goods on Sunday roadside markets. Adding salt to their wounds, food melas are organised during tourist season in which goods other then food items are being sold,” Inderjeet said.

The complexities of GST had forced small shopkeepers to close their business. The cost of Chartered Accountants and employees had increased financial burden while natural calamities, water crisis and frequent traffic disruption due to the four-laning of the Shimla-Kalka National Highway had further added to the woes of shopkeepers,” Amit Sood, a local businessman, said.

“The tourist season has reduced and the business has gone down by 50-60 per cent which has also hit the local markets as with reduced tourist implies reduced cash flow and even the buying capacity of locals, especially hoteliers, has been affected,” said MK Seth, president of the Tourism Industry Stakeholders Association.

Earlier, there was no VAT or GST on online sales, but bow the government has imposed 5 per cent tax on such sales, but it had not helped the local businessmen who are paying GST ranging between zero per cent and 28 per cent and absorbed in maintaining comprehensive accounts through a complicated process.


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