E-Paper
Misleading buyer about GST to cost readymade garment traders ₹25,000
Excise dept has discovered through a survey that traders were either not reflecting the GST charged in the bills or levying the wrong rate of GST.
Launching a crackdown on evasion of goods and services tax (GST), the UT excise and taxation department has decided to challan readymade garment retailers, who issue bills to customers without displaying the GST charged and its break-up thereof (UTGST and CGST).
The UT action comes in the wake of observations made by the GST Council, which highlighted lack of invoices and improper invoices being the biggest source of GST leakage.
“The department, after a discreet survey, discovered that traders are issuing invoices to garment buyers without following GST rules. Some traders surveyed were found to be issuing bills by stating higher rate of GST without mentioning the exact amount of tax, while others were depositing lesser GST with authorities. Thus, apart from evading tax, many are indulging in unfair trade practices by misrepresenting the facts to the consumer,” said a senior department official, requesting anonymity.
For instance, the department discovered that the bill for a garment being sold for Rs 800 reflected a GST of 12%, whereas the rate of tax for apparel costing below Rs 1,000 is 5%. The tax deposited further was also 5%.
As such, the trader was found charging ₹96 from the consumer, but depositing only Rs 40.
To rein this in, the department will be imposing a fine of Rs 25,000 for each violation, including where a bill has been issued without displaying the correct rate and amount of tax, and where the GST has not been reflected at all.
“The retailer must mention on the bill, the percentage and the break-up between the UTGST and CGST. The UTGST on readymade garment below Rs 1,000 is 2.5% and the CGST is 2.5%. By not mentioning the break-up, as mandated by the GST Act, the retailer hides from the consumer the exact rate and the tax they have to pay,” the official said.
Significantly, the issue of incorrect bills by garment retailers was raised during the latest meeting of the trade welfare and advisory board of Chandigarh.
The committee, formed by the UT administration, comprises excise department officials and trader representatives. In the meeting, the department officials conveyed to the traders that cases of improper invoices were increasing, causing loss to the exchequer as well as consumers.
“The department had sought cooperation from traders in this regard, and issued a warning that it will initiate action in the matter if correct bills are not issued,” the official added.
