Traders, mostly those operating on a low-scale, are hopeful that the State Government will do away with the practice of Test Purchase carried out by the Commercial Taxes Department, under provisions of the Goods and Services Tax.
In Tiruchi district, the department is stated to have conducted Test Purchase at about 165 outlets over a three-week period following the issuance of guidelines at the start of last month under sub-section 12 of Section 67 of TNGST Act, 2017.
According to it, officials of Commercial Taxes Department effect purchase from the business premises of any taxable person, to check the issue of tax invoice or bills of supply. On return of goods, the amount paid towards the goods has to be refunded after cancellation of tax invoice / bill of supply issued earlier.
The Test Purchase is carried out by field officers in Intelligence Wing and in exercise of the powers conferred under Section 168 of the TNGST Act, 2017, to ensure compliance with Section 31 that mandates issuance of tax invoice or a bill of supply for every supply of goods or services or both.
“Though as per the Standard Operating Procedure, the Test Purchase should be done on rare occasions, where there was a strong proof for evasion of tax, it was conducted even on those traders who did not come under the ambit of GST,” said V. Sridhar, district unit president of Tamil Nadu Vanigar Sangangalin Peramaippu.
The traders are now able to breathe free after apparent intervention by the Commercial Taxes Ministry, in deference to the representations made by trade organisations, Mr. Sridhar said.
The traders had carried out State-wide protests during the last week of November stating that the ‘Test Purchase’ resulting in levy of fines up to Rs. 20,000 was unjustified as they were already paying taxes for their original purchases.
The stand of the Tamil Nadu Vanigar Sangangalin Peramaippu is that such an operation ought to be carried out on enterprises that operate on a large scale, or on those bringing in products from across the country, at the State borders, rather than on small-scale traders who operate on meagre margins.
The traders strongly believe that the Commercial Taxes department will not revisit ‘test purchase’ in future on the ground that such a practice was not prevalent in other States.
