The Confederation of All India Traders (CAIT) in a communication to Finance Minister Piyush Goyal today 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 Mr.B.C.Bhartia & Secretary General Mr. 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, which forced sizeable number of transactions across Country to remain informal, causing loss of both direct and indirect tax revenue to the Govt and for this as a routine matter 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. Both Mr. Bhartia & Mr. Khandelwal suggested to levy GST only at three points in the entire supply chain. First, levy of SGST & CGST on first sale of a commodity in a State. Secondly, IGST on inter-state transactions and thirdly SGST & CGST on goods produced or manufactured in a State at the annual turnover of more than Rs. 50 lakhs. After first transaction in a 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 a 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 about 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 meted out. On the other hand, the consumers knowingly well that the goods are already tax paid and they need not to pay money for taxes will obviously demand the Bill while purchasing goods and will not be avoiding taking Bills. In this case the informal sale will be converted into formal sale which is bound to increase the revenue whereas more and more transactions will come under formal economy-said both Mr. Bhartia & Mr. Khandelwal.