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Andaman Nicobar, Lakshadweep may see cost increase, post GST

Press Trust of India  |  New Delhi 

As gets ready to ring in the unified GST, people in tiny islands of and may perhaps be the sole exception who stand to lose out once the structure is implemented.

The islands do not impose any sales or VAT to make up for the additional cost required for transporting goods.

But with the launch of the goods and services (GST) from July 1, all goods and services consumed in the islands -- like elsewhere in the country -- will be levied a tax of 5, 12, 18 or 28 per cent.

In other words, this would make the goods pricey.

Prof Jagdish Mukhi, Lt Governor of Andaman & Nicobar Islands, at the meeting of the Council earlier this month flagged this peculiar problem.

According to the minutes of the meeting, he stated that Islands are situated about 1,250 km into the sea and as a result, cost of goods supplied to these increases between 5 per cent and 25 per cent.

In order to allow the local residents access goods at a reasonable price, no VAT is levied in the Union Territory (UT).

He stated that with the introduction of in the UT of Andaman and Nicobar, the goods would turn dearer.

Farooq Khan, Administrator, also stated that they had no octroi, and introduction of would lead to increase in prices.

Mukhi suggested that a mechanism should be devised to provide compensation to the UT.

The Centre assured to look into the problems separately.

Another issue facing the island is absence of any bureaucracy dealing with the tax matter. That explains the administration is training staff on possible tax implications.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 13 2017. 16:13 IST