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| Best Price wholesale shop's retail trade with consumers causing huge VAT loss to J&K: CCI | | All business cards of mega shop issued to traders, consumers are fake; new cards be issued under supervision of Nodal Officer | | Early Times Report
JAMMU, Nov 17: Best Price, BhartiWalmart's first cash and carry wholesale shop in J&K, has of late been a topic of discussion among the J&K businessmen for at least two wrong reasons: First, it is the single biggest source of sales tax (ST) evasion in the state for directly selling its products to consumers and second, its retail trade with individuals is resulting in the gradual death of retail business in the region.
Chamber of Traders Federation (CTF) president Yashpal Gupta said though Best Price had the licence for wholesale business only, it was doing retail business also. "Apart from retailers, they have been selling their items to consumers also," he added.
J&K Sales Tax commissioner KifayatRizvi had termed the ST evasion by Best Price as "legal evasion" of taxes. Chamber of Commerce and Industry (CCI) general secretary Arun Gupta, however, has a different view. He said they were greatly concerned over the manner in which the mega wholesale shop was running its wholesale business operations. It has its sale outlet at Paloura here. It was opened in November 2011. Gupta said the mega shop was set up with the sole purpose of offering competitive wholesale prices on a variety of commodities to retailers only but now it was also selling its products in retail directly to consumers. "This is a wrong practice because it is not meant to do retail business in the state. It was not established for this purpose. Under rule, it can only deal in wholesale business with retailers. How can it directly sell its products to the consumer, bypassing a retailer? This is against the basic Best Price business norms. We are not against its business dealings with retailers but we oppose tooth and nail its direct business link with consumers. This is one reason of VAT (value added tax) evasion by it. For example, when a wholesaler sells something to a retailer and retailer to consumer, the government gets VAT twice but when a wholesaler is selling his product directly to consumer, the government will get VAT once only," he added.
Asked that traders were buying from Best Price the items which were not part of their trade and had been selling them in retail market, Gupta said, "How can a kiryana retailer buy a refrigerator from there and then sell it in retail? This is an illegal practice. This practice also leads to to tax evasion. For example, for selling a refrigerator legally, the kiryana dealer will have to add this item in the items already mentioned in his TIN/CST Number. And, when he transports the refrigerator from outside the state against his TIN No, he would pay tax at Lakhanpur, J&K's entry point, While selling this refrigerator to a consumer in retail, he would charge VAT from him and in return, pay this VAT to the concerned government department. But by buying this product from Best Price at a lower price, he is evading tax at Lakhanpur and also not charging VAT from the consumer, thereby causing a great loss to the state exchequer."
In reply to another query, he alleged that all the cards issued by Best Price to traders were fake. "Let these cards be cancelled and new cards be issued under the supervision of a Nodal Officer," the CCI general secretary said.
He said, besides some firms, several in-service employees and other individuals were also the Best Price business card holders. Instead of going to the retail market in Jammu, they were making purchases from the WalmatBharti's wholesale outlet. Gupta said the mega store had fixed Rs 1,000 as minimum shopping limit only for the convenience of individuals and not for retailers who "make purchases in bulk". "Let this limit be enhanced from Rs 1,000 to Rs 10,000," he demanded. "As the Best Price wholesale facility is at present easily available to in-service employees and others, retailers in Jammu have been suffering a lot. Let it be a sale outlet for retailers only," he said. Best Price is termed as one-stop business-to-business store that meets day-to-day needs of kiryana stores, restaurant owners, hoteliers, caterers, fruit and vegetable sellers, offices and institutions. It offers to its customers a variety of products and items of daily use. But all these items are being sold on wholesale rates by the store.
As per the laid down norms, a trader would get only those items from the store in which he deals, ie a kiryana dealer would get kiryana items only. But this is not happening, according to an office bearer of Federation of Industry, Gangyal. "At present, a kiryana dealer can also buy electronic gadgets and other non-trade items on his card from the store. The Best Price be barred by the government from selling non-trade items to firm owners. This is leading to the theft of VAT by traders and unintentional evasion of VAT by the store," he added. Rizvi said, "This type of tax evasion is called legal evasion. It does not come under our purview. Best Price is doing business and it solely depends on them how they do it. If a firm requires a refrigerator for its office it can buy it from Best Price store but if it takes it home of the company owner or someone else that amounts to misuse of the facility." He said he had received complaints in this regard earlier also but "they cannot do anything in this regard legally". |
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