Simplifying GST: The dishonest Indian still cheats with full GST, half GST and no GST Bills

Corruption and the reluctance to pay taxes forced the Government to dish out a rigid GST framework. Retailers especially the small and medium business men should be mindful of the fact the Government can provide compliance relaxation only if tax cheating ends.

Written by Sandip Sen | Updated: October 16, 2017 3:43 pm
Make in India, simplifying GST , GST compliance, ease of business, Goods and services act, GST loopholes, corruption, Business news, indian express news An illuminated Parliament ahead of midinight launch of ‘Goods and Services Tax (GST)’ in New Delhi. (Source: PTI/File)

This Diwali, I wanted to purchase some small furniture for our home, and headed to one of the well-known markets of Delhi NCR. Despite soaring prices there was more crowds then the busy salesmen could handle. We waited our turn and soon were shown several pieces that was to our liking. When we started asking for the prices and discounts we found that we had liked more than what was in our budget.

So, started some more haggling and the thought of picking 3 instead of the 4 items that we had liked. The salesman then came up with a unique solution. We could buy two of the items with half GST and make up for the shortfall in cash. However, if it was a credit card payment it would have to be from the full GST bill book but if we were paying cash we could even buy without GST.

The dishonest Indian is back

A few days back when raids were conducted in Andhra Pradesh and Orissa, we had spoken against inspector raj and arbitrary fining by the raiding officers. We still believe that the raids should not be arbitrary. They should be process driven with notified penalties that are clear and transparent. Ensuring ease of business and transparency is the prime responsibility of the Government introducing indirect taxation. The resentment against the GST legislation should not be allowed to mount, as it is still early days for GST.

But at no stage can anyone condone any action like 3 bill books. One that helps steal taxes and where the consumer and the retailer take part in GST evasion. It is not only the shop keeper who is guilty here. The consumer here is as much guilty as the shop keeper if he or she buys goods without GST or with half GST. This reminds us of the days when people with black money used cash mules to queue up in banks. The dishonest Indian managed to deposit all his black money in multiple accounts during November and December 2016. No wonder at the end of the day most of the high denomination currency found their way into the banking system.

Punishment for offenders and relaxed rules for compliance is needed

Quarterly filing and lesser compliance are privileges. Retailers small and medium business men can think of getting special privileges only if they follow the law in letter and spirit. If they do not follow the rules and are caught evading taxes they should be subject to the rigid compliance procedures that big businesses are bound by.

It is necessary to tighten and standardize penalties for tax evasion instead of keeping it to the discretion of the raiding officer. Every procedure of ‘raid and penalize’ procedure should be standardized across the country and there should be a single authority in each state that should be empowered to raid. This should be under any one enforcement department only and not under various ministries.

Transparent and just but strict procedures should be framed as early as possible to ensure that there is no arbitrary action. Also, there should be two warnings after which the license to do business should be suspended for six months. Unless we create strong deterrents to GST evasion it will keep happening. And the nation can never progress if the dishonest Indian prospers.

Views expressed by the author are personal.

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