GST-IT Linking

It appears that the “Sahaj” form available for Income Tax filing has now been revised, and one is required to give the GST registration number for business activities.

In a way, it is a good move to link IT with GST, so that the total inflows could be available to the government together, and avoiding the payment of taxes (IT and/or GST) will become difficult.

But as usual, the concerned department is sleeping, and is NOT aware of the basic facts.

For example, if a trader in stock market is trading in stock futures or index futures, then he/she is paying the GST amount while buying the futures and also while selling them. There is no credit made available for the GST paid while buying the futures, to be deducted from the GST while selling the futures.

And this activity, is kept under “Business” for Income Tax filing.

It has NOT been clarified,

- Whether such individual trader, trading online through a broker, all alone without any specific help from anyone, and is paying the GST as required, is also required to get a GST registration.
- If yes, will such trader be in a position to claim the GST refund for the GST paid while being the futures?

And as pointed out in my earlier message, why is Income Tax insisting on audit of the accounts for individual traders? The Loss made is any, (due to the stop losses getting hit) are added to turnover, only increases the turnover to make the audit compulsory.

Can the Income Tax & GST departments NOT work hand in hand?

For example, if the Income Tax allows the total future trading done in one particular scrip for a particular month in totality, to arrive at the net difference between the two to be considered as the turnover, and changes the requirements for the audit needs, then it is very possible, that all those, who try to keep their trading under control to avoid audit due to stop losses getting hit, will not bother about it, the trading volume shall go on increasing, and the govt shall be getting more and more GST, for alleged loss of Income Tax, which may really NOT exist.

Finance department needs to do it’s home work properly.

Because, audit means dependence on Chartered Accounts, who ask for heavy amounts of fees, which a small time trader finds very high.

Alternatively, the government must provide a team of Chartered Accountants for getting such audits done at a nominal cost.

But the actions taken without any such home work, are likely to meet criticism. What else? more