Several of the customers have filed a complaint that Goods and Services Tax has been levied by small restaurants as well as B2C entities but the same is not being deposited with the government. Customers have been addressing their grievance over the Iris Peridot mobile app, developed by a GST Suvidha provider, that allows them to scan the entities' GSTIN or GST Identification Number and track whether the company has filed GST returns or not.

To check this incidence of GST evasion by a large chunk of small restaurants and B2C companies, GST officers are planning a mechanism.

These complaints concerning non-filing of GST returns and tax payments by the entities charging GST from customers are sent for further steps to the department on a real-time basis.

Small businesses with a turnover of up to Rs. 1.5 crore per annum can choose the composition scheme and are allowed the provision to file GST returns quarterly. Nonetheless, they cannot charge GST from consumers and have to specify on their invoice that they have opted for composition scheme and thereby not supposed to levy GST on supplies.

As per the guidelines of the composition scheme, restaurants and service providers pay 5% and 6% GST, respectively on their turnover whereas traders and manufacturers have to pay 1%.

"We have received several complaints from consumers with regard to charging of GST by entities who have not been filing returns. Some customers have also flagged the issue of charging of GST by small local restaurants who otherwise would be under the composition scheme," an official is cited as saying in a PTI report.

And as the complaints are large in number, the GST officials are working out a mechanism to determine the amount of tax evasion, for referring it for further action by field offices.

"In absence of sufficient manpower to deal with such huge number of complaints with relatively small tax implication, it has become an administrative nightmare for the department," the official said, adding similar complaints have also started coming in against small B2C entities dealing in hardware, sanitary ware, furniture, electrical goods.

GoodReturns.in