Economy
Image Credit: Rebecca Conway/AFP/Getty Images
Now that the GST Constitutional Amendment Bill has been passed by the Rajya Sabha, and the marathon for its potential launch by 1 April 2017 has begun, one needs to ask, what’s in it for the “retail consumer”? The retail consumer is the final “payer” at the end of almost all “value chains”.
Experts largely believe that the impact of GST on most manufacturing sectors will be positive (great for Make In India), and for most service sectors will be negative, of course depending on the final rate that the GST Council eventually decides. All experts agree that the overall short-term impact on the economy will be inflationary, i.e., the retail consumer at the end of the chain will have to pay more.
So this begs the question, how can one make the retail consumer more “invested” in the GST process, especially that most “ignored” of consumers, the lowly individual taxpayer?
Efforts are being made by the government to ban cash transactions over a particular limit, and the recent struggle that the jewellers had done was driven by the fact that many retail consumers force the last-mile delivery of a value chain to indulge in cash transactions. No amount of sermonising will change this behaviour.
An idea worth considering is to give individual income tax payers a tax deduction of, say, up to Rs 2 lakh per annum against the GST paid by them on all purchases over a limit of, say, Rs 1,000. This will create a powerful incentive for consumers to move away from the cash economy, and act as a reward those who pay taxes regularly and stick to the “white economy”. All that the vendor needs to do is to capture the PAN number while making a sale and upload it on the GST portal at the time of the payment. All that the tax payer needs to do then is to download an end-of-year statement (like from Traces) and incorporate it into the IT returns annually.
This will have a significant impact on compliance, as the retail consumer will tell the final vendor to include his name and PAN number in the invoice while paying GST.
Unfortunately, retail consumers do not have a body of people equivalent to the “industry body” to advocate their concerns. Maybe social media can bridge this gap.
PS Views expressed above are strictly personal.
This piece was first published on LinkedIn and has been republished here with permission.
Also Read:
Support Swarajya's 50 Ground Reports Project & Sponsor A Story
Every general election Swarajya does a 50 ground reports project.
Aimed only at serious readers and those who appreciate the nuances of political undercurrents, the project provides a sense of India's electoral landscape. As you know, these reports are produced after considerable investment of travel, time and effort on the ground.
This time too we've kicked off the project in style and have covered over 30 constituencies already. If you're someone who appreciates such work and have enjoyed our coverage please consider sponsoring a ground report for just Rs 2999 to Rs 19,999 - it goes a long way in helping us produce more quality reportage.
You can also back this project by becoming a subscriber for as little as Rs 999 - so do click on this links and choose a plan that suits you and back us.
Click below to contribute.
Latest