Seems like the Indians are getting cagey
Just 10 days into GST, Traders are finding innovative ways to avoid tax
GST India July 10, 2017 Â Â Â
Goods and Services Tax (GST) rolled out in India from July 1, 2017. This tax if properly followed would not result in price hike because credit of taxes flow through entire chain i.e. from manufacturer to whole seller to retailer to end consumer.
But it seems traders have opted to not follow GST in its true form by finding innovative ways to to avoid tax and save money. According to a report by ET, here’s a look at innovative ways:
Under the GST regime, footwear below the price of Rs 500 are being taxed at 5% while above that at 18%. So to save the tax, shopkeepers have started to make a separate bill for each shoe of the pair, as per the report. Similarly, in clothing, apparel under the price of Rs 1000 is taxed at 5% while above it will be charged at 12%. So, the sellers have decided to sell different parts of a garment on different bills. So, if a shopkeeper gives you separate bills for your kurta and pyjama, don’t be surprised.
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Another way to structure (if it can be said) is that branded rice is taxed at 5% while unbranded rice is exempted from it. India Gate, which is the largest selling rice brand in the country is already trying its best to exempt from paying goods and services tax (GST) as it didn’t get its brand name registered under the Trade Marks Act 1999. “This is to further clarify, declare and certify that ‘India Gate, Indian Farm, Lotus and Unity’ brands are owned by KRBL Ltd but since they are not registered in Class 30 under ‘Trade Marks Act, 1999’ hence ‘NIL’ GST rate is applicable on it,†KRBL Ltd, which sells India Gate packaged rice, said in an internal communication dated 3 July, as per a report by Livemint.
It is only about mindset that traders are not willing to understand that whosoever procures from manufacturer was not eligible to get credit of Excise Duty but under GST, credit of GST would be eligible and thus, costing has to come down. Instead of opting for such madeup innovative ways, if stress is given on proper ways to structure pricing, GST would be beneficial for all.
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