Patna, July 1: Shops without customers and desolate streets in business districts summed up Day 1 of the Goods and Services Tax (GST) that came into effect at midnight.

Several shops stuck to the old billing style, charging abolished taxes like VAT (Value Added Tax) and sales tax on the plea that it will take a few days more to change to the new billing method.

It was as if the "one nation, one tax" regime was yet to be accepted by customers and shopkeepers. Besides, nobody had any inkling on GST's actual impact. People are exercising a wait-and-watch policy.

Dadiji Store on SP Verma Road had less than usual footfall. Asked about dip in prices of various products, its manager Prem Prakash Sinha said it was to be done by manufacturers. "No company sent personnel to supply goods today," Prem said. "It is as if they have all gone into hiding. Since prices on most products are inclusive of taxes, the companies have to determine the prices afresh. Till now we are sticking to old prices. It seems customers are not venturing out as they are waiting for new prices to take effect."

But a few shopping malls in the city reportedly did brisk business before and after midnight. "Normally we shut down by 10pm but we kept open till 2am to welcome GST," a Big Bazaar official said on condition of anonymity. "People thronged our facilities to buy goods that were cheaper before GST came into effect. Some even waited to buy goods that would became cheaper after midnight. We had arranged for new prices in light of GST directly from the companies we procure products from."

Many shops either refused to give cash memos or charged the abolished VAT and sales tax from customers.

Rakesh Kumar Sharma, who has an LPG bottling plant, was taken aback when he went to Sweet Home, a confectionary shop, and bought four patties and two cold drinks. He was charged 15 per cent VAT. He again paid VAT and sales tax for shoe polish he bought at 9 to 9 Supermarket in Bandar Bagicha. "These people are still charging abolished taxes," Rakesh said. "I was asked to pay 15 per cent VAT on patties, whereas it should now attract just 5 per cent GST. I protested, but the manager at both places had the gall to tell me that they have been given four days' exemption. The government should crack down on those fleecing customers."

Raj Gupta, a staffer at 9 to 9 Supermarket, however, said VAT and sales tax may have been charged because of a technical fault but now "things have been rectified and bills are showing GST rates charged on products."

Some others did not see any rise or fall in prices. "Everything costs the same," said Sujata Srivastava, a homemaker from Bank Road in Patna. "There was no change in prices of milk, sweets, frozen vegetables, bread or anything. I wonder when it will happen."

Central excise and service tax department officials organised a celebratory function to welcome GST. But, asked when the new prices under GST will start reflecting or what was the deadline for companies to reveal the new prices, central excise and service tax chief commissioner Sheo Narayan Singh said there was no deadline. "This is a free market economy and the market will decide the prices," Sheo Narayan said. "There is no deadline. We have faith manufacturers will transfer the benefits of reduction in production cost to consumers."

Section 171 of the Central GST Act stipulates that if the tax burden on products decreases, then it has to be passed on to consumers as part of anti-profiteering measures. The same applies if the cost of production is reduced because of "input tax credit" claimed by manufacturers. Prices may also fall due to cheaper logistics and transportation costs.

The Bihar Chamber of Commerce and Industries president requested taxmen not to take punitive action against traders and entrepreneurs if they commit any mistake in filing returns for the next two to three months. He pointed out that there were many who want to pay taxes honestly but are afraid of harassment at the hands of taxmen.

Bihar Industries Association (BIA) president Ram Lall Khetan said with the change in tax regime, businessmen will face difficulties, so mistakes should be overlooked.

The state commercial taxes department (CTD) stopped checking vehicles at checkposts across Bihar from midnight and its officials welcomed the first goods truck driver to cross the "integrated check post" at Dobhi in Gaya with a garland. This was the first to enter the state without being checked by CTD officials.

Automobile manufacturers cut down prices on various models by 3 to 5 per cent to pa-ss on lower tax incidence on vehicles to customers. However, the dealers could not give a clear picture on actual reduction on different models. They said big cars and SUVs will see an increase in prices.

"I will not be able to tell about the new prices yet. All day I was busy getting software of my dealership changed to factor in GST," Maruti Suzuki dealer Narendra Kumar of Alankar Motors said. "A clearer picture will emerge from Monday onwards."