VAT - The Reality

There have been long arguments if the VAT / Sales Tax is a good thing for consumers or not, and how the VAT is utilised to build the City and there by the country. From my point of view, the Government has the right to Tax people, and I fully agree with it, though What I don't understand is why Have Double Taxation (Like we have on software, when you buy software, you are taxed 4% VAT and 12.36% Service Tax, because it is unclear to our folks, if this is a product or a service, or a service disguised as a product). Though leaving this discussion apart, there has been a new consumer learning that happened for me a few days back. Though I think this is a very stupid thing to point out, but I think there are a lot of smarty pants out there to make a fool out of us.

For those of you who grew up as Kids in the 1980's 1990's, you would recall a program called Rajni on Doordarshan, that used to teach about consumer rights, and recently there have been a lot of advertisements for the campaign Jago Grahak Jago, but still there are these cheap skinned people who are out to make a fool out of you and make a Quick buck.

So what is the lesson. A few years, I don't recall when, all the prices on products moved to Tax Inclusive, i.e if a Product said, Price: Rs. 100 (Inclusive of All Taxes), no one could charge you anything above this.

Then came along a Store, I will not want to name it, but you will know, which promises to sell everything for 99 bucks, now they sell the same product, with a 100 Rupee MRP at Rs. 99 + 4% VAT = 102.96, i.e making Rs. 2.96 more than they are supposed to charge, and they just told you, that they were actually giving it to you a buck cheaper.

We are building a new office, and I had to recently buy Godrej locks, and I bumped into a wholesaler, here in Lajpat Nagar, who offered me 8% discount on all my purchase, now what is the catch

Price of Lock: Rs. 110 (one of them) this is MRP on the Box Inclusive of Taxes
Discount: 8% i.e 101.20
Tax: 12.5% (Now this is another area, how does a consumer know if the tax on this item is 12.5% or 4%, anyway), so 12.5%
Total Price: Rs. 110 Less Discount 8.80 = Rs. 101.20 + Tax (12.5%) 12.65 = 113.85

So you thought you got an 8% discount, and the guy fleeced you.

The Next Big trick is these guys who sell Paint and Hardware. WOW the game that they play. Most of these Big Paint Showrooms now have jazzy looking girls at their billing counters (an eye wash / distraction) and PC's with LCD Monitors / Thermal Printers, that print your bill, since most of the times you are in a hurry or buy cash, you get the thermal print out, take it to the paint mixer, take your paint, reach home.

Put it in your account books, in a few months you look at the account books, and what do you find, chances are if the thermal print survived, it reads "ESTIMATE", so you were sold material, and given a bill, which reads Estimate.

Now you go back to the store, after some ruckus, the guy says, hey buddy, you know what, I will need to charge you Tax (again 12.5%), so you say, ok, I bought Paint worth Rs. 10,000 / Tax: 1250, wow man that's high, and some of us just come back, but realize this, the Paint that he sold you was Tax Paid, so even if he had to give you a bill, he can't charge you an additional 1250, yes, he can charge you 8750 + 12.5%, thus still taking 10K. But why would he do that.. Right

So next time, check your bill, and Jago Grahak Jago

Thanks to this lovely store in GK, who pointed this out to me, and gave me a great discount of 10% on my purchases, lovely guy.

This fleecing is happening across the city, from the manufacturers (Who don't print prices clearly) to retailers who are out to make a quick buck (no wonder they have pictures of stars visiting their shops, obviously you have so much money to blow away).

The worst part, if you want a bill, they actually have to do it hand written, as the computers, are just a show off, only to generate those thermal prints.

Just my 2cents of a lot of irritation :)

G

PS: I think there is a simple alternative, stop buying anything on cash. Buy it either cheque / credit or Debit Card. Since the retailer now get's the money straight into his Bank, he will have to file taxes, and see how our country will grow.