Prepaid Cards in VAT
(Written on 6th July 2015)
On any purchase made by the public from a vendor, the vendor charges the VAT (VAT - Value Added Tax) also at a rate fixed by government, but the customer is never made known whether and when it has been deposited in the government exchequer. And even if the amount of the VAT is remitted to the government exchequer, it is done after nearly a month and by that period of deposit; this huge amount is used by the shopkeepers as their own working capital. Therefore, the finance department should issue prepaid cards for VAT (in multiple of Rs 500) with a statutory provision of compatible software installed in every shop having turnover above a certain limit. The customer shall not pay the VAT to the vendor, rather swipe his VAT card and necessary amount of VAT will be deducted from his VAT card. These cards would be rechargeable after the amount of cards get used up. This system of VAT collection will have multiple benefits. The government will receive the VAT amount on almost every purchase, and, that too, IN ADVANCE. Shopkeepers and vendors will be able to dispense with intricate and cumbersome book-keeping and files-maintenance of VAT amount and consequently with the requirement of filing of their VAT returns, audits thereof; and to get rid of inspector-raj. Most important, the customer will be satisfied that his contribution towards VAT has been deposited in the government Treasury. This change in system of collection of VAT should result in simpler government processes, customer satisfaction (of both, vendor and purchaser) and good governance coupled with economic development of the state.
