This refers to Sachin Menon’s statement that the goods and services tax (GST) would be a perfect platform to unearth black money and that the revenue forecasting will be better in GST (“Ficci to take up cudgels on behalf of GST,” August 19). GST evasion on business-to-business (B2B) transactions is generally not possible because of self-policing systems, but a loophole exists for the evasion on business-to-consumer (B2C) transactions. This can be plugged if consumers are given an incentive for insisting on tax invoices for the purchase of goods and services. The incentive can be a cash refund of a certain percentage. It may be added that consumers would not be required to carry out any paperwork or preserve originals of the purchase bills/invoices.
However, they would have to ensure that their UID numbers are recorded on their purchase bills, on the basis of which they could receive the refund, as in the case of income-tax deducted at source (TDS) from income. Practical application of this system, say, within the next two years, is not impossible in the present computerised and net-working environment. In this context, we should note that Canada refunds the indirect tax paid by poor citizens, who are not liable to pay direct tax.
K Mundanad, Navi Mumbai
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