CAIT suggests changes in GST

Source: The Hitavada      Date: 06 Feb 2019 10:43:34



Business Bureau,

The Confederation of All India Traders (CAIT) in a communication sent to Finance Minister Piyush Goyal expressed concern over shortfall in collection of GST revenue and has suggested structural changes to levy GST only at three points from the origin of goods till it reaches to consumer.

CAIT National President B C Bhartia and Secretary General Praveen Khandelwal in the communication said that there is a general tendency among consumers not to pay tax due to higher rate of taxes and thereby avoiding taking bills while purchasing goods. “Because of the this sizeable number of transactions across country remain informal, causing loss of both direct and indirect tax revenue to the Government. However, the trading community is blamed for evading taxes which is certainly not true. The non obtaining the bill due to tax component by  the consumers is the major reason for shortfall in the revenue,” they explained.

Both Bhartia and Khandelwal suggested to levy GST only at three points in the entire supply chain. First, levy of SGST and CGST on first sale of a commodity in the State. Secondly, IGST on inter-state transactions and thirdly SGST and CGST on goods produced or manufactured in the State at the annual turnover of more than Rs 50 lakh. After first transaction in the State, the rest of the supply chain should be relieved from levy of GST and the GST component should be merged in the price of the commodity so that when it reaches to the end consumer, the commodity becomes already tax paid. Since the goods will be purchased in State only after paying GST at first point itself, the possibilities of tax evasion will not arise at all.

In the entire supply chain duly registered under GST as of now, it is estimated that there are about one lakh manufacturers, about 5 lakh big traders, about 10 lakh distributors and more than one crore retailers are covered. However, the major chunk of revenue is derived from manufacturers, big traders and distributors whereas more than one crore retailers add minimal value addition to the supply chain and hence their contribution in revenue is minimal. If the above proposal is implemented, the Government will need to monitor and regulate only about 25 lakh assesses and the target of revenue will be achieved.

“On the other hand, the consumers would know that the tax is already paid and they would obviously demand bill while purchasing goods,” said Bhartia
and Khandelwal.