Sunday, Jul 09, 2017

India’s Goods and Services Tax (GST) continues to create confusion, anomalies and despair although a week has elapsed since its implementation. While the government and the bureaucracy are still in a celebratory mood over sticking to the July 1 deadline for the nationwide launch, retailers and consumers are clueless on how the new tax regime will affect their lives.

As consumers and small businesses struggle to unravel the complexities of the new tax structure, confusion prevails among traders. Most traders are apprehensive about wrong billing. The law under the GST is strict. A shopkeeper found indulging in “under-invoicing” will be penalised — the penalty includes jail term. Consumers too are unhappy since they have to pay more. Complaints range from shopkeepers charging tax on maximum retail price (MRP) to issuing handwritten receipts with arbitrary GST rates. Many people said they were charged GST over discounted prices or sellers had changed the MRP. The government has warned against changing MRPs after receiving complaints that selling prices were altered on pre-GST stocks to comply with the new tax rates.

Given the massive size of the country, implementing a multi-layer uniform consumer tax structure is not an easy task. Following the rollout, initial teething problems are expected and some amount of confusion has been factored in by tax experts. With greater emphasis on compliance, some amount of panic among commercial establishments and traders is inevitable, but the consolation is that the new tax makes doing business easier and companies can gain substantial savings. What finally matters is the greater good of the greater numbers, and these issues will be ironed out in due course.

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