Rahul Mehta Gandhinagar LsCandidate

NaMo's new law ---- If B buys goods from A, then A has to collect VAT from B. And if A doesnt deposit VAT in govt account, then B has to pay to govt again !! And then he can file a case against A !! (see newspaper links in 1st comment)

End result will be --- buyers will prefer large suppliers over small suppliers. So small-business-owners will be out of business.

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NaMo made a VAT law , called as section 11 (7) in VAT act , effective 1-apr-2013 that

1. say B buys goods from A worth Rs 1000
2. then A will charge as Rs 1000 plus Rs 100 VAT, and so B will pay Rs 1100 to A
3. Say B sells it to C for Rs 1050. Then B will collect Rs 105 VAT and charge Rs 1155 to C
4. Now B had to deposit Rs 5 to Govt as B has already paid Rs 100 of VAT to A
5. But if A doesnt pay Rs 100 to govt, then B will have to pay Rs 100 as well !!!

So if A defaults or escapes or becomes untraceable or never had any VAT number, then B is royally ruined !!

Its like --- if employee doesnt pay income tax, then employer has to pay on his behalf !!!

End result will be -- say one of ten small suppliers default, then buyers will lose faith in ALL small suppliers. And so much of the business will go in the hands of big suppliers !!

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Solution I propose :

1. Eliminate VAT, service tax , excise
2. Impose 1% wealth tax, 33% inheritance tax, reduce income tax

see chap-25 of rahulmehta dot com / 301.htm of see FB notes in first comment