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Purchase without invoice

D G MOHAN (PARTNER) (171 Points)

25 June 2017

Public culture is to purchase goods w/o invoice to save tax amount. Now since gst rates are higher than vat rate 18 & 28% it may increase further. This will affect all honest dealers. How does gst act deal with this problem

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CA Akhilesh Kumar Kandpal (Proprietor A K Kandpal & Associates) (1442 Points)
Replied 26 June 2017

you are considering only vat, which is not the only tax levied on goods. when goods are first produced they are charged with excise duty which is normally around 12 %. then the same goods are charged with vat say 12 %. now the only tax will be charged is gst...which will be around 18 % of this category of item....hence overall tax burden will be reduced...in very few items, mostly of luxary nature, gst rates will be higher than the existing rates...but these are very few....hence voluntary compliance will only increase in gst.....in addition to this gst acts in itself have many clever provisions which will curb the existing practice of purchase without invoice...
in summary most of the honest dealer will be happy with gst...there are some initial fear in minds of dealer due to various roumer and inferior media information feeding, which will go away with time....