Sales Tax Refund System Best option against corruption

Introduce Sales Tax Refund system- the Best Option against corruption

Of late India is gearing up to cleanse the system out of corruption and so many important and bold steps has been adopted which has brought the country into a transformative phase. All the steps are being implemented with good intention to stengthen Indian economy by cleansing fake and black currencies from the system.

I strongly feel that if the following suggestions are introduced immediately after the demonetisation phase along with the introduction of GST into the Indian system then it may create “WONDERS” to Indian tax system as well as it may become a catalyst to help curb accumalation of black money. Indian government must introduce a system of “Sales tax refund” similar to “Income Tax refund”.  

The introduction of the same must be in a such a way that for all the purchase with a valid bill through debit or credit card will enjoy a 5 % refund to the buyers bank account on monthly basis or quarterly basis as it may deem fit. This may prompt people to buy with orginal Invoice. The following things need to be implemented without fail to make it a huge success.

• 2%  charges levied on the shopkeepers on use of cards as a mode of payment must be waived permanently so that shopkeepers must whole heartedly prefer to accept digitial payment option from the buyers which is the most important to make it success.
• A procedure must be there in place to ascertain the MRP of any product and the product must carry the details of factory cost, retail price and final MRP which includes GST. ( Government must increase 5% tax extra in GST which must be refundable)
• All the GST account holders irrespective wheather small business man or huge corporate must have a their respective GST account linked with the GST portal official government website and all the business Invoice must be generated online where in the Invoice must clearly mention the GST account number of the seller as well as that of the buyer (Retailer or the dealer). This Invoice must reflect not only place and date(obviously) but also time of the Invoice generated which should be carried along with the products on way of transportation. ( This will eliminate  the culprits “ from obtaining “way bill” which they destroy once the good reach the destination safely and in case the goods was noticed or caught during tranportation then they make the Invoice permanent) By generating online Invoice at the time of despatch which will reflect time apart from date and place of orgin will not only minimize the malpractise in the system but also it may help to make the malpractise almost impossible.
• Having implemented the online Invoice system with time and date mentioned on the same, the  officers on duty to verify the transports must be made accountable to have a strict watch on the same and some rewards must be there to the officers who will manage to locate any misdeeds. The heavy penalty must be levied on the culprit thus it can be one of the easiest way to further minimise the malpractise of bribeing to the officers on duty to carry without Invoice. ( It means the penalty on finding any goods without Invoice must be huge so that nobody will prefer the same)
• The best penalty can be to levy a tax of 5 % extra for the whole business for the financial year along with a permanent 10% increase in tax for life.( When a person can be imprisoned by taking away the right to freedom for what so ever crime, then leving 10 % extra penalty tax for life or for 10 years or for 5 years is only technical business decision less harsh compared to the former) ( Only fear can be the motiviating factor to which may encourage them to eschew from commiting tax crime.. nothing else can stop them)
• 5% Extra GST must be charged from the end consumers which will be refundable on monthly or quarterly basis directly to their bank account which must be linked to PAN as well as Aadhar. (Just like Gas subsidy) As any purchase in cashless mode with an Invoice must get the refund which will prompt all the consumers to buy every items through cards of other cashless options.
• The consumer will be aware the amount of refund he is going to get due to the reason the details of the tax is mentioned on the products in details like factory cost, middle man margin and taxes including refundable taxes.
• Government must make it strict to pay all the payment like salaries, even DA, petrol etc by card strictly.

These are a few basic steps that on implementation could have a great control on the entire tax system. The matter is as symbol as that motivate people to buy through cards and there can’t be a better motivation factor than 5% Sales Tax Refund system. But it must be made sure that the MRP must be common wheather you buy with cash or with card.

Apart from the all above it is basically the intention of the Nation which may help to uproot the corruption and black money. Let us eliminate black money by not allowing it to generate rather than allowing it to accumulate first then taking painful step to getting it out of them.  Let us avoid cancer by not smoking rather than smoking and getting ready for a chemotherapy.

May God bless all.

Jai Hind

Sudesh DJV

Indore / MP / India

19^th Dec 2016 / Monday.

9:15 AM

CC  Honourable Prime Minister of India Shri Narendra Modi

CC  Honourable Finance Minister of India Shri Arun Jaitely

Sudesh DJV writes on contemporary subjects in the form of Articles and poems which is in the interest of the Nation in particular and for the Mankind in general.