Post-GST, unbilled sales on the rise : The Tribune India

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Post-GST, unbilled sales on the rise

CHANDIGARH: Have you bought goods lately and denied a bill by the shopkeeper? If yes, you are not the only one.

Post-GST, unbilled sales on the rise

Reports of many retailers overcharging customers by demanding GST, even as they have included the tax in the net price, are being reported from various cities in the region. Tribune file Photo



Ruchika M Khanna

Tribune News Service

Chandigarh, October 18

Have you bought goods lately and denied a bill by the shopkeeper? If yes, you are not the only one. Ever since the Goods and Services Tax (GST) has been rolled out, a substantial portion of sale and purchase of goods is happening without the customer being given a bill. The unaccounted-for sales or “number do ka kaam” (illegal sale) seems to have increased manifold.

Inquiries made by The Tribune across Punjab and Haryana have brought out that there’s been unbilled sale of the construction equipment, hardware, steel and even readymade garments.

This means that neither the customer pays the additional tax (GST) on the cost of goods nor does the dealer show the actual amount of sale. Since several traders in the exempt category (those having sales turnover of less than Rs 20 lakh per annum) and those who pay composition tax are unable to collect the GST from their customers, they are avoiding getting invoices from their suppliers too.

As a result, goods being received by many of these traders are without bills. Reports of many retailers overcharging customers by demanding GST, even as they have included the tax in the net price, are also being reported from various cities in the region. Trade and industry insiders, obviously innovating faster than the taxmen, admit that under-billing (billing of much lesser amount of goods than you buy or sell) is happening in a big way.

The modus operandi, explained one of the big hardware suppliers in Ludhiana, is to make a computer bill for any sale. “When the goods are delivered to the customer without getting checked — as is happening in the wake of delay in the roll our of e-way bill (electronic way bill for movement of goods worth more than Rs 50,000), the bill is deleted from the computer. If by any chance, the goods are checked physically, the bill is generated and has to be paid. The customers or end users do not want to buy things at higher rates,” he said.

When Value Added Tax (VAT) regime was in place, the tax was between three and four per cent on most goods, the supplier said, adding that post-GST, several goods had been kept in the 18 per cent or 28 per cent GST bracket — leading to a sharp increase in prices of goods. “The customers themselves offer to pay three to four per cent on the retail price, in case we do not account for the goods sold to them.”

A leading chartered accountant in Sirsa explained another “innovative way” adopted by traders to circumvent paying of the GST.

“Iron rods manufactured in Uttar Pradesh are first despatched to dealers in Delhi and then sent to sub-dealers in Hisar. From there, it is sent to several retailers in other cities. The bills generated on this transit of the iron rods, if it escapes the notice of taxmen, are again sold to the main dealer in Delhi. So, the same bill (or just one bill generated ) is re-used for selling several consignments of iron rods by just changing the date of despatch and, in a few cases, the details of the transporter,” he said, requesting anonymity.

Bajrang Dass Garg, general secretary, Akhil Bharatiya Beopar Mandal, disagrees that a lot of trade and business is unaccounted for to evade GST. “The high rate of taxes has been a dampener. The economy is witnessing its lowest-ever downturn,” he told The Tribune.

Most others, especially those working in the unorganised sector (80 per cent of trade and industry in this region is in the unorganised sector) agree that trade, wherever it is happening, is largely because it is unaccounted for.

Badish Jindal, president, Federation of Punjab Small Industries Association, said the shift in business from accounted for to unaccounted for was the maximum in steel products.

“If 30 per cent of steel trade was unaccounted for before the GST, it has increased to 60 per cent now. In fact, steel traders/ manufacturers are now offering products by asking us to pay Rs 500 to Rs 1,000 per tonne as additional cost for not generating bills. In fact, a new business has emerged. Small traders, mainly those in the exempt category, are selling the bills to exporters, who, in turn, take input credit by presenting these fake bills,” he said.

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