 |
This is a new form of implementing Goods and Services Tax, by which all the people who sell Goods and Services will pay GST, no matter if they are small businesses like a Barber Shop or a Stationary Shop, without fail. This is a simple system, that can be implemented without complex procedures or confusion. Immediate tax deductions can be done without waiting, and the merchants can get loans from banks based on their business performance.
I propose a simple Goods and Services Tax Regime by which there will be an enormous collection of Goods and Services Tax across all the sectors of the economy without fail. First, every business that is supposed to pay Goods and Services Tax should have a Merchant Bank Account. The Government taxes money deposited into this account at whatever percentage the Goods and Services Tax is, upon every deposit made by the consumer. All the money deposited into this account is taxable. It is not the total balance in the Merchant Bank Account at any moment of time, which is taxable. Instead, it is the money that comes into this account, which is taxable. Money getting out of this account is immaterial to the government. These Bank Accounts help Business Owners get loans if they perform well in their businesses because the volume and value of the transactions in these accounts reflect whether their business is healthy or not. These Bank Accounts should also be connected to the Unified Payment Interface ( UPI ) with QR Codes in countries like India, where they are scanned to pay money for the items purchased by the Consumer. For Small and Medium Businesses, these Merchant Bank Accounts can get money through Credit or Debit Cards. This makes these Merchant Bank Accounts universal across all sections of the Business Community. Consumers can identify whether an account is a Merchant Bank Account or not by a blue tick mark in the Payment App when they scan their QR Code. Consumers can also find a blue tick mark in the POS of a Merchant Bank Account if they purchase through Credit or Debit Cards. Online Purchases can also show a blue tick mark at the time of entering OTP in the Payment Confirmation Page.
Cashback and Lucky Draw
Consumers who want to buy goods and services should always do digital transactions through UPI or Credit and Debit Cards as it will be advantageous to them in the following way. Consumers who buy digitally will get a cashback of 8% on the total amount purchased and also can participate in a lucky draw every month, which will fetch them electronic products like Mobile Phones, Laptops, and Gold Ornaments. This way every Consumer would like to do only digital transactions because they will get a Cashback of 8% on the total amount purchased and can participate in a lucky draw. Money can get into this Merchant Bank Account only if a Consumer buys a product or service in his shop. So 8% is simply given back as cashback immediately after a consumer puts money into this account by way of purchase in his shop digitally. This 8% Cashback can increase the price of the goods and services initially at the time of launch of this scheme. But it will help the Government to bring everyone under the Tax net in the long term.
Scenarios Tackled
Now, We can look at the ways, Merchants can try to elude Consumers away from doing digital transactions. Let's say Goods and Service Tax is 18% across all products or it varies for different products. Different Taxes for different Merchant Bank Accounts based on the shop. Different Shops will sell different products like a jewellery shop and a Stationery shop, selling gold and books. First Scenario, Merchants are ready to pay 8% Cashback themselves and say don't do digital transactions. In that case, Consumers won't agree because of the lucky draw which will fetch them attractive prizes. Second Scenario, Merchants bloat bills increasing the price of goods and services they provide. This will backlash them in two ways, it will increase their Goods and Services Tax, as tax also increases with their bill. Also, There is competition in the market. People ready to do fair practice with lower prices will be at an advantage in drawing more Consumers to their Shop.
Lucky Draw at 1%
We can reserve 1% in the Goods and Services Tax for the lucky draw in case the Merchant is a Micro, Small, or Medium Enterprise like a Stationary Shop or even a Barber Shop. For Large multinational companies, we can reduce their Goods and Services Tax by 1%. This process enables a smooth transition towards a cashless economy, which helps better Governance and helps to take statistics across all sectors for better policies from the Government.
Multiple GST Slab
It is advisable to restrict GST slabs to two or three slabs. If the same shop sells goods that belong to different slabs, Multiple Merchant Bank Accounts for different GST slabs are needed for the same merchant. To be convenient to the customer and the merchant while billing products of different GST Slabs, Billing software segregates the products into different categories, according to their GST Slab automatically. It just shows QR Codes with the bill amount imbibed in the QR Code for every category, the customer purchases. If the customer purchases two products. one at 8% GST, and another at 18% GST, it will show two QR Codes in the Printout bill or POS Machine.
For Example, a Customer purchases two products in a Showroom of Mobile Phones and TVs. Mobile Phone costs Rs.5,000 with 8% GST, and TV costs Rs.35,000 with 18% GST. When he purchases both of these products. The Cashier gets out a bill (or POS Machine) with two QR Codes. The Customer first scans the first QR Code and the bill amount is automatically shown as Rs.5,000 as it is imbibed in the QR Code. He pays the bill and then scans the second QR which is Rs.35,000 the same way and pays the Bill. This way Customer is not confused about which amount to pay through which QR Code. The Billing Software automatically takes care of everything. He just needs to scan and pay.
To simplify it, different Color Ticks on the UPI App, POS Machine, or OTP Confirmation Page can be provided for different GST slabs, so that the customer easily find the GST Slab. In the example, Mobile Phone Payment will show a blue color tick mark for 8% GST on the Bill, his Mobile App, (or POS Machine) for purchasing the Mobile Phone. It will show a red color tick mark for 18% GST for his TV purchase.
Normally small customers who can't afford POS or Billing Software have only one GST Slab Product. The higher the GST Slab the bigger the Cashback and Lucky Draw amount. This will force the Merchant to do proper billing since Customers will demand it.
Payment and Assistance
Government agencies interested in implementing this method can contact me for assistance with the full implementation of this policy. I will also give lectures on economic policies like this one on request from Government Agencies. If you find this method useful to you, you are obliged to donate as per the benefit you obtained and the impact this method has had on your Government agency.
Photo Courtesy: thehindu.com
Support Us: https://supportusbydeepak.blogspot.com
Comments
Post a Comment