Indian goods and services tax affects expatriates in Oman
July 12, 2017 | 4:33 PM
by Syed Haitham Hasan / [email protected]
Textile traders take out a rally in protest against the newly introduced Indian Goods and Services Tax (GST) in Surat recently. Photo-PTI

Muscat: Many Indian expats in Oman are no longer sending items back home as a newly introduced Indian Goods and Service Tax (GST) now means popular items can sometimes end up costing more.

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India levied a flat rate of 28 per cent GST on imports from countries including Oman from July 1. Expats, mainly from lower income groups, have been drastically affected by this tax and the volume of goods exported has dropped. "There has been no clarity by Indian officials on this. They are supposed to charge a flat rate of 28 per cent GST but people are being charged 41 per cent, which includes duty," an official from Falcon Air and Logistics Services said.

"This has certainly affected exports to India. Most companies and people are now taking legal opinion to check how much they are supposed to pay for this before sending anything to be sure they don't have to struggle with extra taxes later."

Cargo exported to India mainly includes inexpensive items that are sent to family back home to their families.

"It is mainly household items like garments, chocolates and nuts. It is no longer affordable to send such items when taxes have jumped to up to 70 per cent in some cases. Volume of retail exports have dropped from 270-400 tons to nearly zero as people await more clarity and some have given up on sending anything back home as it is cheaper to get it there," an airport official told Times of Oman.

A lot of items are currently held up by customs in India, according to officials, as tax demands have not been met. This is likely to have a big economic impact on trade. "People are more careful about sending stuff back home. There is an effect but we are waiting on things to clear up and I believe it is in its initial stages so in a month or two it will become clearer," Suresh R. General Manager at a logistics company, said.

"It's not fair to have such taxes on imports of inexpensive items. The government is aware that a huge number of its citizens abroad are low income workers who mainly export items back home. Why target these people who struggle to make ends meet? I think GST must be relaxed on these items; like Oman is planning VAT (Value Added Tax) but exempting products that may affect lower income groups," Ashok P. a resident said.

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