30,000 Punjab traders ‘skip’ GST switchover

Chandigarh : In what may be a major cause for concern for the state government, nearly 30,000 traders in Punjab, earlier registered under the Value Added Tax, have failed to migrate to the Goods and Services Tax (GST) regime.
While some of them may be exempt from paying the GST — their annual turnover is less than Rs 20 lakh or they deal in goods exempt under the new tax regime — the Punjab Excise and Taxation Department has decided to verify such traders. The traders were given provisional IDs and passwords under the GST, but they failed to get themselves registered. Officials in the department say action will be taken against those who have wilfully not migrated to the GST by registering themselves, even though they are liable to pay tax. Of the 2.41 lakh traders that the state government estimates come under the GST regime, only 2.10 lakh have so far been registered.
In the previous tax regime, traders whose annual turnover was more than Rs 5 lakh had to pay VAT. The bar had been raised to Rs 20 lakh under the GST. However, officials feel there is a high probability of wilful default.
Even as the count of traders has fallen, there is still no assessment of how much State Goods and Services Tax (SGST) will be collected.
Though the state has been assured of a 14 per cent hike in devolution, on a compoundable basis, each year for the next five years, it is only after the first returns under the GST are filed on August 20 and again on September 5 that the real assessment of the revenues will be known.