Be ready for an ‘unpleasant experience’ if you are a merchant not eligible for collecting Goods and Services Tax (GST) from customers. The Central Board of Indirect Taxes and Custom (CBIC) is working on a mechanism to deal with such entities.

Technically, an entity with a turnover of ₹20 lakh (₹10 lakh or more in Special Category States comprising of eight North-Eastern States and the two hilly states: Uttarakhand and Himachal Pradesh, but except Jammu and Kashmir) can collect GST from consumers. However, the same is not applicable for merchants enrolled under Composition Scheme — under which any trader or manufacturer has a turnover between ₹20 lakh and ₹1 crore.

CBIC Member John Joseph said on the sidelines of an industry event here that tax officials have managed to deduct tax evasion worth over ₹2,000 crore since July. Of this, ₹100-150 crore came into light in the last 2-3 days, Joseph said, adding that all these were done through fake invoices and other fraudulent activities. He asked the industry to help curb this practice.

One can easily check who is eligible to collect GST with the help of an app, ‘GST VERIFY.’ If there is a merchant who is not eligible, then one can send the complaint.

Mahender Singh, Member, CBIC, said the effort is to provide a system of receiving complaint. “It will go to the jurisdictional officer and the officer will then visit his/her premise (of non-eligible merchant) which will be unpleasant experience (for him/her),” Singh said in a conference on one year of GST here on Friday. Besides, if one is using the app and finds fake GSTN or notices fraud, one can take a picture and mail to

Earlier, responding to a query raised by representatives of e-commerce companies, Finance Secretary Hasmukh Adhia, who also holds charge of the Revenue Department, said the Centre did try to have a common registration for the service sector serving more than one State. However, the States were not comfortable.

“States say that we need to know what kind of services are delivered in our State, we need to charge tax on that. It's a question of States’ right to know as to how much services have gone into other states,” he said. Now the question was that can this be possible with a common address, Adhia said, “You are talking about place of business, so you don't want to hire a place of businesses….We can probably look at it.”

The government is thinking of reducing the number of tax slabs to 3 or 4 but that will take time. At present, there are four general slabs, 5,12,18 and 28 per cent while there are special tax rate of 3 per cent for gold and silver and 0.25 per cent for uncut diamond.