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12:33, 24 November 2017 Friday
Update: 14:24, 02 July 2017 Sunday

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Rai is one of hundreds of thousands of small traders fearful of the goods and services tax (GST) launched Saturday that aims to create a single market in place of a labyrinthine system of more than a dozen national and state levies.

World Bulletin / News Desk

India has vowed that a new nationwide tax will transform the economy by bringing more businesses into the digital system and filling state coffers, but for shopkeeper Sanjay Kumar Rai, who has never used a computer, the transition is terrifying.

Under the new regime, businesses must register with the GST network and file invoices and tax returns online at least once a month.

Prime Minister Narendra Modi has compared the changes to getting used to a new pair of eye glasses. Ministers say there will be teething troubles but India's army of small business owners like Rai are in a digital panic.

At his shoebox-sized stationery store in central Delhi, Rai carefully notes down all sales in a traditional thick ledger book in Hindi. He has no laptop and says he would not know how to use one if it was placed in front of him.

"I'm uneducated," he told AFP. "I don't know English. I only know Hindi so how do I navigate this new system?" Till now he has made all tax returns on paper.

In theory, traders like Rai with annual revenues of less than two million rupees ($31,000) do not need to register on the GST network.

However, the bigger clients which buy paper and pens from him want suppliers to be in the GST system or they will go elsewhere. The government is pressing for proof of all sales, regardless of size, so that it can go after tax cheats.

Analysts say the GST has been set up to force compliance in a country with a poor tax base and a reputation for avoidance.

"It's a very clever system design," Credit Suisse managing director Neelkanth Mishra told AFP.

"There will be an automatic compliance upstream because it's up to the companies to ensure that all their suppliers are GST compliant."



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