GST impact on Businessman: Reasons that Making Businessmen Fearful

Anmol Kumar

August 26, 2019

GST Impact on Businessman Traders

Goods and Services Tax has been effective since July 1 that will lead to GST impact on businessman and traders. There are many such provisions which are making businessmen fearful of this tax regime. Traders are also fearful that GST may lead to the infamous ‘Inspector Raj’ in the country.

In the GST law, there is a provision of arresting the businessman due to unlawful profits and tax inconsistency, it is being believed that due to this, the employees of the tax department will get special rights to inspect, raid and seizure on the business premises.

With these provisions, the field officers of the tax department will get infinite powers to raid businessmen in the country. CGST and SGST employees can do inspection and raid on any business or transporter or warehouse, only on the suspicion that the tax on the said Goods is being stolen or is likely to be done.

Read the Guidelines for GST Maintenance in Business

GST Rules That Are Possing Threat To Traders

  1. The Clause 171 in GST states that companies benefiting from input tax credits have to provide products at cheaper rates to the consumer. Under this rule, it is necessary that a structure should be set up in parallel to the GST structure, so that the profitability of companies can be closely monitored.
  2. Apart from this, tax experts on GST’s provisions believe that the rates of taxes of 5, 12, 18 and 28 per cent and many generate new differences between the traders and tax department. To avoid the realm of GST, businessmen will try to assess their product in the minimum radius of these rates. At the same time, the tax department will try to levy more tax under most of the scope of the products. Therefore, in such a situation, differences in business and tax departments is expected, and the role of the tax tribunal will be important for the settlement of these disputes. Under GST, there is a provision that any businessman can be sent to jail if he/she is caught for stealing tax or doing unlawful profiteering.
  3. According to a GST provision, if a commissioner-level officer in the Central and State Taxation Authority has enough reason to indulge tax evasion charges on a businessman, he/she can order for arrest. This provision of GST is a big threat to the traders and has been causing a lot of anxiety among them. They claim that due to this provision, the tax authority will be dominated by the businessmen and this rule is being believed to play the most important role in upholding Inspector Raj.

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Also Read: Impact of GST on Small Business in India

Some Other Reasons That Are Making Traders Skeptical About GST

Goods and Services Tax (GST) has been implemented for more than a week, but many traders are still not aware of the basic procedures like – how to log into the GST portal’s website. There are also many traders who after registering for GST have now forgotten the password, and does not know what to do now? These points have been mentioned by GST Network CEO Prakash Kumar on the occasion of Master class held for the new tax.

It must be noted that the Revenue Secretary Hasmukh Adhiya and CEO of GST Network, Prakash Kumar, along with many senior officers joined the Master Class held on Monday in the Press Center. These officers answered people’s questions about GST. Prakash Kumar said that out of 80 lakh units, 67 lakh have migrated to GST. Apart from this, there has been 2.5 lakh new registrations.

Traders feel that the process of registration of GST is quite complex and requires a lot of technical knowledge. However, Adhiya dismissed this fact by stating that this process is very easy and it takes only 15 minutes for the same.

Though, the process and structure of GST and its provision can make anyone fearful of its implications at the first sight. But, going into deep, it can be easily analyzed that the most of the reasons that are causing fear among the traders are void. First the whole procedure is online, secondly, all Goods and Services come with their respective HSN Code making levied tax very clear for everything.

So, in the light of these, it can be said that the GST is not going to pose any threat to the traders and is also not going to pave way for Inspector Raj in the country. The whole process of GST gives emphasis on making the business doing much easier and open for all the trades and businessmen.

Hope that the information included in the above article will help you clear your heads on the return of Inspector Raj in the country due to GST implementation. For any query regarding GST, do write in the comment section, we would be more than happy to assist.


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