Eater of Black Money: Goods and Service Tax (GST)
Black money is one of the most serious question of the Country. GST being the game changer, it is expected and presumed by the expert that after rolling Out of GST, the question of Black money will surely be addressed and as a result the GST will surely succeed in span of time to curb the black money in India.
As GST will be monitored by complete online process with GSTIN (Goods And Service Tax Identification Number) which will be linked to current PAN (Permanent Account Number),lt will be difficult to escape from tracking of your transactions in any case.
Rather it can be said that the person himself will not go for practice of hiding of transactions as “if a retailer has purchased goods from a whole seller and is not showing that purchase today, then he will not be able to do so after GST. Thus, to substantiate his purchase he will have to maintain the books of sales for which proper bills will be generated. So any trader after GST will not be able to sell products or goods without bills. Once a bill exists in the system, scope for black money reduces automatically.”
The dual monitoring structure proposed within GST, involving the Centre and the states will also curb income tax evasions. So, even if one set of tax authorities overlooks or fails to detect evasion, there is the possibility that the other overseeing authority may not.
Black money in our Country Is mainly generated in three main sectors
2. Real Estate
3. PrecIous Metals
As alcohol yet to remain out of GST for some time, it will be included afterwards. But Precious Metals and Real Estate both are to be taken under GST. Real estate, a sector which absorbs and generates maximum amount of black money, the uniform tax structure will ¡mprove tax compliance by developers, local builders, property dealers, investors and occupiers. The mandatory paper trail that GST will create will go a long way in improving tax compliance.
GST rate is higher so it will increase cost for local people i.e. 5000*1896= 900 so customer will pay 5900 in place of 5750 earlier.
Post GST in long term,
Business man now have to pay Rs. 900 as GST collectted from customer, but now he can take credit of Rs. 125 of whatever as credit as it will no more goods tax or service tax, it will goods and service tax(GST). Now Businesman can pass on saving of Rs. 125 to its customer by lowering price say 4875 or it can increase its profit by Rs. 125.
This way GST will be helpful for local people.
In addition to this credit of paid can be claimed online like its, if other party paid then only you will get credit for the same. It will also help in reducing tax evasion.
Black money Generation
Let us take a look at easy generation of black money from these Sectors.
First of all the Real Estate, the sector which generate the Black Money very easily by paying partly in cash and partly in cheque. When one go to buy a property, he pays the amount in part and only duty on cheque amount to be paid. So as a resuft the flow of Black money i.e. money goes from Buyer to Seller in Cash started and the Seller uses that money to purchase Gold or other precious metals that can be easily stored and hide and the chain remain continue.
Same way Alcohol.
Take an example of Gujarat which ¡s dry state. In Gujarat use of Alcohol and trading of ¡t is not allowed. But people use it silently. So in this case generation of Bill, paying of tax, recording of transaction, flow of money etc. nothing come in limelight so it leads to Black Money Increase.
It is said that all these sectors will be given special attention and provisions that no one will be able to escape from DUAL GST STRUCTURE. Though it will not be able to remove and curb whole black money as our Human Minds are so creative that will find the ways to escape from these clumsy provisions too, but it will surely help to reduce it ten current scenario.