New tax regime hits Gulf NRIs

By Author   |   Gulf Correspondent   |   Published: 17th Jul 2017   10:21 pm Updated: 17th Jul 2017   10:27 pm
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Riyadh: The NRI workers, who are returning to home amid job instability and rising cost of living in Gulf countries are now experiencing unexpected shock in the form GST. Due to the new tax regime, the cargo charges has risen to half with levying new taxes. The GST is likely to show an adversely impact on some thousands of Indian families who are preparing to return home for good. Most of Telangana NRI families using the service while returning home are facing difficulty with the imposition of new duties and tax.

Goods sent to India prior to introduction of new tax system were held up at customs warehouses at airports in India. The officials are now demanding them to pay the tax for release of those goods. In turn, NRIs are shelling out more money for release of their goods. According to sources, cargo facilities at airports in various cities of Gulf also having backlog load of such cargo waiting to be sent. Not only hike in charges, but the delivery duration also prolonged from two weeks now to a month and over.

According to door to door cargo business sources, approximately 1,000 tons of goods sent from Gulf is being held up various airports in India since July 1. The business executive expressed concern that if they delayed in paying new GST, airport warehouses would impose them demurrage charges that destabilise whole business. NRIs in gulf have been using the door to door cargo services for sending goods, mostly used items, to home as gifts. Since 1993, India has allowed sending gifts and goods (no electronic, gold jewelry or any other prohibited items) for personal use assessed worth up to Rs 20,000 from abroad with exemption of customs duty and any tax.

As per new rules effective from July1, 41 per cent tax has been imposed on goods that sent as personal gifts. The tax comprises 10 per cent customs duty, 3 per cent education cess and 28 per cent of GST, the highest tax bracket.

Unaware of GST looming over their head, many NRIs have sent goods to their families in India even a day before new tax system was implemented, yet forced to cough up unexpected tax duties imposed in overnight. Mohammed Adul Shaker, NRI hailing from Mahbubnagar said that he was disappointed when he heard about the price rise due to GST.

Many NRIs have been questioning the logic behind brining the subject into ambit of GST. “When gifts given by employers to their employees worth up to Rs 50,000 per year exempted in GST then why poor Gulf NRIs who were having Rs 20,000 exemption was reduced to merely Rs 2000 which is almost nothing”, asked Mohammed Yousuf, President of TAJ.