Would you spend 2808 or 2165 for your Car repair?

My dear sharp minded car owners,

You will find it implausible, if I say... that I have discovered this...

You all know it very well... as it is as plain as nose on your face...

But that won't stop me yapping this...

Somewhere, in one of dailies...

I read that a team of reporters went to a dealer who was a registered dealer under GST and enquired him about price of some parts of a car and this is what they found out –

Headlight - 830

Taillight – 280

Side mirror – 160

Bumper – 1088

Grill – 450

Total – 2808

Next, the reporters went to a shop located barely at a distance of 400m and enquired about the price...

Here is the price list of the same items –

Headlight – 700

Taillight – 40

Side mirror – 125

Bumper – 900

Grill – 400

Total – 2165

I am sure, you must have noted difference in price? It is of Rs643... that is approx 29.63% viz approximately equal to the GST of 28%, applicable on many of the motor parts...

The daily claimed that:

- The first dealer was registered under GST and the second was an unregistered dealer... So, first one was charging GST, where as another was selling without charging any GST...

- The end consumers naturally go to the shop where they will get cheaper products.

- So, shops of registered dealers wear a deserted look whereas unregistered dealers are making merry.

- To counter this, many trader associations have come forward and appealed to government to either reduce the GST tax rate or bring all the dealers into the ambit of GST.

Clearly, GST has created a sorry sorry situation for many GST complied shopkeepers... Or can I say, that if GST has thwarted the business of tax complied dealers?

But sharp minds, this is not only what we should be worried off....

There is something more serious, real to be worried for...

I am unable to understand one thing...

...for once I may assume that last dealer is a small supplier (with a turnover less than Rs20lac) and does not have to get registered under section 22(1) of the CGST Act...

... but... the manufacturer and other suppliers in the hierachy... should generally be having a turnover more than maximum limit... and thus be a registered dealer(s)

... and as GST is a destination based tax, with fool proof reverse charge mechanism (RCM), operating under section 9(3) and 9(4)... those registered dealers must have charged GST from unregistered dealers... under RCM...ie full GST would already been have charged... much before it reaches the unregistered dealer...

Then HOW is the last supplier selling without any GST????

That is what is worrying me...

I pray that my worry gets solved... as soon as GSTN gets robust... and the GST department matches ... GSTR 1, GSTR 2, GSTR 3 and other returns... and questions all the suppliers... about the discrepancies, mismatches... and asks them to plug their holes...or whatever...

But what if the parallel economy starts brewing much before our GSTN gets robust? or if charlatans discover their own ways to break the system?

Whatever... lets do our bunch... which could actually stop them..

and that could be... not buying anything in Kachha bill... and buying everything against a Pakka bill...

And here are the tips... to distinguish...

A pakka bill is -

·       The one which is issued by the shopkeepers which clearly shows the price of items along with the tax charged on it.

·       This is the bill which we get when we shop in big retail outlets like Big bazaars etc. All of the MNC’s like McDonalds and showrooms like Croma issue a pakka bill.

·       It is called Pakka because it is genuine, authentic and valid according to the government.

·       It is computer generated.

Opposite of the pakka bill is Kaccha bill. It is the one which is

·       Issued without charging the tax. Issuer of kaccha bill does not collect tax.

·       In it, only the price of items is mentioned. There is no tax component.

·       Kaccha bill is issued in small shops and local general stores.

·       It is not recognised by the government.

·       It is always hand written.

Wishing you very good luck....

Thanks,