The Goan Network
PANAJI
In a bid to make Goa a cashless society, the office of commissioner of commercial taxes issued a circular that baffled the experts. In one paragraph, the circular makes an “appeal” to business entities to make use of non-cash modes of payment such as point of sale (POS) machines or swipe card system. An appeal, according to experts, does not mean that business entities are obligated to do so.
The circular goes on to say that dealers/hoteliers/proprietors should ensure that cashless modes of payments are installed within 10 days from the date of issue of this circular.
In the last paragraph, the circular says that commercial tax officers will visit business places to verify “compliance” and submit a report within 15 days. Experts were quick to react, stating that compliance without legal provisions is meaningless.
A chartered accountant said, “As long as cash is legal tender, people cannot refuse to accept cash. There is nothing in law, which prevents people from accepting or giving cash. This circular seems confused to me.”
He continued, “Due to demonetisation, there is a lack of cash in system. As a result, people are unable to pay in cash. Therefore, having POS machines or swipe machines will be helpful. To the extent this circular makes an appeal, it is fine.”
Another financial expert says appeal and compliance are two different things. An appeal doesn’t compel the other party to do something. And, for a compliance to compel people to do something, it has to be backed by the law.
Another chartered accountant said, “Commercial taxes department does not govern transactions between a business and a customer. How businesses take payments from their customers is entirely up to them. At the most, commercial tax department can say that businesses will have to pay tax online.”
A senior banker disclosed that various government departments have met business people and bankers in the last few days to “facilitate” cashless transactions, but said there is nothing preventing people to not use cash.
Sources also informed that businesses continue to pay taxes in cash, although there is provision to pay online. If the state government wants 100% business related taxes to be paid online, then it will have to amend a number of acts like Goa Value Added Tax Act and Goa Entertainment Tax Act saying that tax cannot be paid in cash.
In the absence of those amendments, commercial tax department’s recent circular will not have a legal backing.
