Confusing GST Slabs Help Merchants Cheat Small-Town Consumers

The GST aspires to be ‘One Nation One Market One Tax‘. But the existing multiple tax slabs in India’s new TAX law means that anti-profiteering practices are on the rise especially in places where GST awareness is minimal. One such incident which has come into the light is that of Merchants duping consumers by taking advantage of the different slabs under the Goods Services Tax (GST). The crooked practice, for the time being, is fostering unquestioned, thanks to the tactical ignorance of tax authorities as well as the naive consumers who are paying for the dubious bills at will.

While GST tax slabs on paper promise huge benefits to the common man, the ground reality is in contrast to it. As per reports, consumers in small towns and villages have been subjected to 12 percent GST rates even on garments whose net price does not exceed the Rs 1,000-figure. As per the GST provisions, only 5% GST can be levied on garments whose cost price per piece is less than Rs 1,000. 12% GST is applicable only on those garments whose price is above Rs 1,000. However, traders are playing on the naivety of the consumer to mint easy money.

In addition to this, there are reports of traders not issuing bills even for sales above Rs 200 although the GST provisions strictly prohibit such corrupt practices. In some other cases, there are reports that confirm that majority of the restaurants continue to charge erstwhile GST rates of 12 percent and 18 percent in their bills despite the GST Council’s order that fixed a 5% GST rate on restaurant food.

These merchants manage two separate account books. The account book used for giving out bills to consumers bears no legal identity. The legal account book, on the other hand, contains no records of these dubious bills and easily escape the notice of the tax authorities.

A Commercial Tax Official while explaining the next move of the Tax Authorities to curb down on such malpractices said, “We wanted to give a little cushion to the merchants to overcome the initial hurdles of GST. We will start inspections shortly”. It is high time that in the interest of the common man the officials from the commercial tax department now resort to frequent surprise checks.

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