Loading…
Shrewd Traders Think Out-of-Box to Take Benefits of GST!

Shrewd Traders Think Out-of-Box to Take Benefits of GST!

Shrewd Traders Think Out-of-Box to Take Benefits of GST!

The Government of India implemented GST rollout to build a transparent system to curb corruption and tax evasion, but several traders look for nifty ways to avoid paying tax. Electronic bill is a crucial step taken to transform India as a digitally driven Tax Economy. Let’s have a look at ways traders and businessmen adopt to avoid paying tax.

The total amount collected under the Goods and Services Tax (GST) in November totals to Rs 80,808 crore, while it was Rs 83,346 crore in October and all-time smashing record of Rs 94,000 crore in July after the rollout of GST. One of the reasons for the sharp decline in the amount collected under GST is the wave off GST on nearly 200 items. Let’s look at some other reasons;

Under the GST regime, there exist multiple tax rates for varying prices under the GST which is also a loophole, which traders are taking advantage of.

Some products are free of tax, while others are levied tax at 5%,12%, 18%, 28% plus Cess, tax being divided among the CGST and SGST. For instance, a garment that’s priced under Rs 500 is taxed at 5% and garment priced anything above Rs 1000 is taxed at 12%. In order to save the tax, traders are selling different parts of a garment using different bills to avoid paying excess tax. It implies you get two separate bills for the same set of garments.

Finance Minister Arun Jaitley with the CBEC officials have introduced GST Rate Finder app, to end the confusion arising from the multiple tax slabs. About 55% of the consumers and traders are yet not familiar with the GST. This app is designed to bring awareness about GST rates for various goods and services. It’s a simple app which helps understand the respective GST rates and tax imposed.

Sources from reports claim there are multiple tax rates, which makes it easier for traders to invent ways to claim that their product is cheaper or a lower rate under the Goods and Services Tax (GST) to avoid taxes.

GST has rolled out to evolve India as a corruption-free nation, having some loopholes is defeating the purpose of its implementation. The GST Council and CBEC officials proactively need to take measures to build a robust system that curbs traders and other taxpayers from evading tax.