Hyderabad: Within two days of GST coming into force, the government has got over 1,500 complaints of shops, hotels and commercial establishments selling products above MRP on the pretext of higher tax slabs.

The violation was found to be rampant in hotels where there was more confusion due to four categories of GST rates in AC and non-AC categories. Bakeries were found to be increasing prices of bakery products citing higher GST tax rates.

Interestingly, 70 per cent of the complaints are from semi-urban and rural areas in districts, while 30 per cent of the complaints were from the GHMC limits.

Officials said traders and shopkeepers were resorting to irregularities in semi-urban and rural areas where the consumer awareness levels on GST were comparatively lower over urban consumers.

Commercial taxes secretary Somesh Kumar warned traders and shopkeepers of severe action, if they resorted to irregularities. He said the GST Act empowers the government to cancel GST licences of such traders and shopkeepers.

GST
GST

“We have asked our officials and staff to focus more on semi-urban and rural areas, which are pro-ne to exploitation. They have been asked to take up inspection of shops and commercial establishments and interact with consumers to know their grievances,” he sad.

The implementation of GST in the services sector has been posing a major challenge to the government. Beauty saloons, photography laboratories unregistered cab services and mechanic shops were seeking payments in cash.

A complaint was made against a photo developing laboratory in the city that billed Rs 1,700 for enlarging pictures, but asked the customer to make the payment in cash to avoid 18 per cent GST.

Service sectors that have minimal or zero raw product exchange, no online transactions or no billing system have a high scope for evading tax.

Officials said goods could be tracked through transportation, production, depots, physical inspection and more. In service sector, it would be difficult to track transactions if the service provider and the customer came to an understanding over cash payments.