NOVEMBER 21, 2017

By G Mohana Rao, Assistant Commissioner (Retd.)

INDIA International Trade Fair started on 14th November, 2017 and will continue till 27th November, 2017. Over time, this has become an annual prestigious event with the maximum footfalls amongst business visitors as well as consumers. The companies from different countries as well as the local ones showcase their products to prospective business clients and consumers.

First of all, due to continuing renovation resulting in space constraints, the stalls are lesser in number and smaller in size. Some of the gates are also not operational resulting in less public reaching some of the stalls. To add to the woes of the exhibitors, just one day before, Delhi government issued notice to ITPO, the organisers, asking them to ensure that each and every exhibitor is registered as non-resident taxpayer. The concern of the State government is correct as they stand to lose all the revenue if such goods are not taxed or if already taxed in other states, the taxes so paid need to be transferred to them.

As per the GST Law, such persons need to register at least five days before the start of the exhibition and need to pay the estimated tax liability in advance. Most of the exhibitors had not done so. While registering,the non-resident taxpayers require a local authorised signatory to sign on their behalf. In many cases, their direct interface is with the ITPO which refused to act as one. Meanwhile, some enterprising people seeing a business opportunity started a stall for helping the exhibitors in registering and filing returns. In many cases, the exhibitors were simply showcasing the products without supplying any goods. They are obviously not required to register as they will not be supplying anything.

In many cases, the exhibitors have paid duty at the time of imports and would be entitled to credit of Integrated tax paid at the time of import. The huge amounts of GST paid by them to the ITPO for booking the stalls would also be available as credit. Similarly those applying for casual taxable person would also have paid taxes on goods brought by them. In many cases, it would be CGST and SGST of the respective States where they are registered. They need to show this as stock transfers and convert the taxes so paid into IGST so that they can use the credit of the same while paying taxes in Delhi. They would also get the credit of GST paid by them for all the logistics employed by them like packing, transport etc. Net to net, they stand to gain on getting all credits and it would lower their costs as well. The exhibitors need to determine their estimated liability in advance based on these factors as well, so that they pay the right amount of GST before taking registration and do not have to go through the rigmarole of claiming the refunds later especially in view of the refund module being not ready and claiming the refunds in physical mode would again subject them to following the procedures which can be avoided if little carefulness is practiced.

It is not clear whether ITPO has informed the foreign exhibitors in advance about the need to register under GST at the time of allotting space to them. In fact, they should have informed about it, educated them about GST and helped them in registering for GST,wherever necessary. It is seen that they themselves were clueless of the requirement. The State government too instead of waiting for the event to start and create a chaos should have played a pro-active role and informed the ITPO about the requirements in advance. All these small steps go a long way in carrying the image of the departments, the government and the country as a whole. The carrot of credits by the exhibitors is good but the procedures for the same should not act as a STICK for them to neutralise the benefits. Pre-planning is essential and pre-requisite for the success of any international or national level event. A lesson needs to be learnt from this experience, so that such mistakes could be avoided in future!!!

(The author is Partner, Elysian Tax Advisors, Mumbai and the views expressed above are strictly personal.)