Traders across Gujarat are raising serious concerns about the actions of both Central and State GST officers. They claim that these officials are misusing Section 67(1) of the GST Act. This section allows officers to inspect business premises but does not give them the power to seize goods or demand payments on the spot. However, traders allege that officials are threatening them with seizures and legal actions, claiming authority they do not have.
Reports indicate that GST officers often conduct inspections with vague warrants. Many traders are unsure whether these inspections fall under Section 67(1) or the more severe Section 67(2), which allows for the seizure of goods. This lack of clarity leads to panic among small business owners, especially the elderly, who fear they are being raided.
In some instances, officials reportedly take mobile phones and access financial records during these inspections. Such actions go beyond the legal limits of a simple inspection. After these visits, traders claim that officers demand large payments under CGST and SGST, using threats of further action to pressure them into compliance.
A formal complaint has been submitted to CGST Chief Commissioner Sunil Kumar Mal, highlighting these practices. The Ahmedabad Traders’ Federation has called for reforms in the inspection process. They suggest that instead of surprise visits, traders should be summoned to GST offices for fair inquiries.
The Federation has proposed several changes to ensure fair treatment:
1. Allow traders to have their tax consultants present during inspections.
2. Require officers to clearly state the type of warrant being used.
3. Educate traders about the differences between inspection and seizure powers under the GST Act.
Traders believe that minor errors are often exaggerated by officials to extract money. They argue that a more constructive approach would be to help traders understand and comply with GST regulations rather than resorting to threats.
The issue has sparked a broader debate about the balance between tax enforcement and supporting businesses. With the GST system designed to streamline taxation, these allegations highlight the need for fair and transparent practices.
In addition to this, there are alarming reports of state GST officers allegedly selling traders’ data to competitors. This information includes details about purchases and sales, which rivals can use to undercut prices and harm businesses. A Chartered Accountants’ Association has sent a letter to the Gujarat government urging intervention to stop these practices.
The letter warns that if this data trading continues, it could undermine the entire GST system. Reports suggest that GST return data is being sold for significant sums, creating a black market for confidential business information.
Moreover, traders are facing harassment at check posts where their goods are being stopped and penalized. Officers are applying severe penalties under Section 129, which can be as high as 200% of the tax amount. This misuse of power is causing distress among traders, who find it difficult to claim Input Tax Credit (ITC) on these penalties.
The allegations do not stop there. Traders have accused GST officers of collusion and corruption, particularly in the manual refund process. They assert that officers manipulate refunds and impose harsh penalties for minor infractions, further adding to their burden.
In conclusion, Gujarat’s traders are calling for urgent reform in how GST inspections are conducted. They seek clarity, fairness, and support to ensure they can operate their businesses without fear of harassment. The government must address these concerns to maintain trust in the GST system and protect the livelihoods of traders across the state.