UAE expats, cargo agents crumble under new Indian tax

Expats, the worst-affected, are apprehensive about using cargo services in future.

Thousands of Indian expats and cargo agents have been hit on the knuckles by the newly introduced goods and service tax system on imports.
Previously an expat could send up to 20,000-rupee (Dh1,140) worth gifts and goods tax-free to India but with new notifications on July 31, the exemption is applicable on goods worth 2,000 rupees (Dh114) only. The new 41 per cent revised tax imposition has seen service rates almost double up resulting in up to 500 tonnes of goods being struck at various Indian airports for lack of clearance.
And expats, the worst-affected, are apprehensive about using cargo services in future.
Abu Dhabi-based Rashid Ali said his cargo hasn't been delivered even after three weeks.
"I had send gifts and goods worth Dh600 or so. It was about 20kgs and the cargo company charged me Dh220 or so but now there will be a double burden of taxes. The company has said they will get the goods delivered but what about services in future. The company will pass on the charges onto people like me," Ali said.
Thomas Chacko, another expat, had sent all wiring and cable works for his new home through cargo services. "We people used to benefit from the cargo services but now this tax system has ended that too. Government airlines like Air India Express allow only 30kg. The new tariff is a shocker for all low-paid workers."
Meanwhile, cargo agents from the UAE and GCC region are camping in New Delhi meeting federal ministers seeking rollback in the tax structure.
Dubai-based Federation of Indian Cargo Agents (Middle East) president Muhammed Sadique said Indian expats, mostly blue-collared workers, had been primarily using door-to-door cargo services for sending goods home as gift items. "With 41 per cent revised tariff, all are feeling the pinch. We have 300 tonnes at New Delhi, 100 at Mumbai and 100 at Bengaluru airports," he added.
There are other groups in New Delhi like International Courier Agent Welfare Association, which are meeting various officials to find a solution to this vexed issue.
"There are some 2.8 million Indian expats in the UAE. A big percentage use cargo services but now who will pay this 41 per cent additional tax burden. The backlog is being cleared as we are paying for now. How can we charge customers extra, who had paid us at Dh11 per kilo but what about the rates in future," an agent asked.
The agents were also concerned that the delay in paying new taxes will have airport authorities impose demurrage that will worsen the situation.
ashwani@khaleejtimes.com