Amid rising complaints of tax evasion by restaurants, B2C entities, the government is working towards a way to catch the culprits with the help of a mobile application.
Owners of small restaurants and B2C entities are now under government radar as it looks to find out tax evaders with the help of a mobile application. Amid the piling consumer complaints that the small restaurants and cafes collect tax from the customers but do not return it to the government, the government has found out a way to catch the culprits.
“Several consumers have filed complaints through a mobile app — Iris Peridot — that GST was charged by small restaurants but the eatery neither deposited taxes with the government nor filed GST returns,” PTI reported. Developed by a GST Suvidha Provider, the mobile application scans the unique GST Identification Number (GSTIN) of a business and then informs the application user whether the business is filing the returns. The same information is then passed on to the tax department, it added.
However, restaurants are not the only tax evaders. Similar complaints have also been received for hardware, sanitary ware, furniture, electrical goods shops.
How do businesses evade tax?
Under the government’s composition scheme, businesses with an annual turnover of maximum Rs 1.50 crore can file the returns quarterly. Also, they cannot charge GST from the customers and it is mandatory or them to print the same on their invoice. Also, under the scheme, traders and manufacturers are directed to pay 1% GST on their turnover, the same is 5% for restaurant owners and 6% for service providers.
“Some customers have also flagged the issue of charging of GST by small local restaurants who otherwise would be under the composition scheme,” PTI quoted an official as saying.
While the government had passed several GST cuts, the majority of the Indian populace does not feel that the businesses are passing on the benefits to them. The same holds true for restaurants and FMCG brands with a general mistrust prevalent of these entities among the consumers, per a LocalCircles report. The respondents of this survey attributed the rise in the base price as the way out for businesses for not passing on the benefits with only 33% of them of the opinion that they are witnessing GST benefits now.
- First published at www.financialexpress.com on 29 April 2019.