Question for any CAs or GST experts out there...
"Oh ok, if so, for the CI, do you need real value or undervalue? Many of our customers will put it undervalue in order to lower the tax"
Why does this keep happening to us? Every single new vendor in China or the far east asks us this. They say all Indian importers insist on undervaluing invoices.
But how does this work? If there is a ₹2,000 item that one undervalues to ₹1,000 and imports. Then at the time of import you pay 18% GST or ₹180, instead of ₹360. So you "saved" ₹180. But did you? Because when you sell the item, and you will sell it for more than ₹2,000. So if you sell at ₹3,000, you collect ₹480 as GST on the sale, take credit for the ₹180 you already paid at the time of import, and deposit ₹360 with the government. Right? Right? So how does undervaluing help? You could have paid ₹360 at the time of import and then paid ₹180 at the time of sale and you'd still pay the same amount of GST. What are these people doing?
And how do they reconcile their bill of entries with their TTs? How come the RBI and ED aren't breathing down their necks?
Why am I annoyed? Because I'm sick of the Chinese telling me that all Indians are unethical and undervalue imports. The last people I need telling me that Indians are unethical are the Chinese. (Yes, that's racist, but I'm not being racist, I'm being patriotic. They are the same thing; same same but different.)
"Oh ok, if so, for the CI, do you need real value or undervalue? Many of our customers will put it undervalue in order to lower the tax"
Why does this keep happening to us? Every single new vendor in China or the far east asks us this. They say all Indian importers insist on undervaluing invoices.
But how does this work? If there is a ₹2,000 item that one undervalues to ₹1,000 and imports. Then at the time of import you pay 18% GST or ₹180, instead of ₹360. So you "saved" ₹180. But did you? Because when you sell the item, and you will sell it for more than ₹2,000. So if you sell at ₹3,000, you collect ₹480 as GST on the sale, take credit for the ₹180 you already paid at the time of import, and deposit ₹360 with the government. Right? Right? So how does undervaluing help? You could have paid ₹360 at the time of import and then paid ₹180 at the time of sale and you'd still pay the same amount of GST. What are these people doing?
And how do they reconcile their bill of entries with their TTs? How come the RBI and ED aren't breathing down their necks?
Why am I annoyed? Because I'm sick of the Chinese telling me that all Indians are unethical and undervalue imports. The last people I need telling me that Indians are unethical are the Chinese. (Yes, that's racist, but I'm not being racist, I'm being patriotic. They are the same thing; same same but different.)