Yet another #GSTHorror story. A highly reputed business family running one of the most popular shops in a town for generations. Monthly turnover must be in crores. They get a notice for a tax demand for petty amount. A few thousands. They respond to the notice disputing the claim. The tax officer sends orders to the banks to freeze the businesses' bank account. The bank manager immediately calls up the family to inform them and helplessly tells they have no choice but to comply. The family is shell-shocked. The reputation they had built up over decades would be in tatters when their cheques don't get honoured. All for a few thousand rupees when they pay millions as GST every month. Shaken, they settle the demand. Dear @nsitharaman @narendramodi this is the kind of tax terror that goes on in the name of GST - the 10th year of the Good and Simple Tax. Few things to note: - neither the bank manager nor the bizman knows whether the tax officer has the powers to do this. - but that doesn't matter. It's the asymmetry in power and outcomes. Look at what the bizman gets to lose (and it is immediate) vs what the tax officer would lose (after a long drawn out process) if he is shown to have broken rules. High time we curtail the discretionary powers of this parasitic, bloodsucking babudom. When is Modi going to get this?

Since this post is going viral, here is another #GSThorror story There are some elaborate ways of defrauding the system of taxes involving ITC which is also facilitated by loopholes in the tax filing process – discussing that would require a 5000-word post, so I will desist. But for those interested, you can read up about bill trading. One of the ways in which the system combats this menace which potentially causes trillions in tax losses, is Rule 86-A, which empowers the taxman to block ITC of any businessman if he has “reasonable cause” to believe that the ITC was fraudulently availed. Ok, now on to the story. A few months back, a bunch of businessmen operating in the steel sector in my city – including one of my personal acquaintances – were slapped with notices under this rule, blocking ITC aggregating to Rs.60 million, for transactions related to the period 2021 to 2024. The stated reason – Supplier X from whom these people had purchased goods (and taken ITC credit) was declared to be “non-existent” and hence all those purchase transactions were fake. But here is the thing – the supplier was very much “existing” during the said period. There was concrete evidence of the same – power bills for the factory running into tens of millions, his GST filings, company annual returns, income tax returns and so on. The supplier had closed down his business in early 2025, not in small part due to the pain of GST terror and compliance burden. The panicked recipients of the notices went to meet the taxman, taking along the supplier and with all the aforementioned evidence. The taxman was unmoved. So next they moved to the court but the latter dismissed the petition asking them to exhaust the appeals process via the department first. Before filing an appeal, 20% of the blocked ITC needs to be deposited. The legal costs in this case would have added another couple of million Rupees. Having figured out that legal process was not worth the effort, the group sent a message to the taxman requesting a deal. Initial demand-Rs.12 million. After lots of hard bargaining, it was finally settled for Rs.8 million.. There is a lot to unpack here. I will leave out the technical and legal aspects. One, there is just a stunning level of discretionary powers vested with our tax babus, who exercise it with a singular focus on national building and punishing the tax evaders in a parasitical manner – for personal enrichment and of their political bosses – indulging in rampant rent-seeking and shakedown of the taxpayers. They have the power to severely disrupt the business operations of an average businessman for the most frivolous of reasons. And there is very little downside for such abuse of power. Two, the presumption of guilt with regard to ITC flouts all principles of natural justice. In this case, for example, all the customers of the Supplier X are assumed to have colluded with him in the “fraud”. The law leaves no scope for a presumption that many customers might have been unwitting victims of the fraud. And this rule is not just applicable in case of fraud. Even in case of legitimate transactions, if the supplier fails to deposit the tax paid by the buyer, the department can go after the buyer for the unpaid dues (and this rule persists even after court judgements have held it to be untenable). Three, the corollary to the above is that the primary responsibility for tax evasion/fraud across his supply chain rests with the businessman. In other words, the tax department has outsourced its job of enforcing tax compliance on to private citizens. The repeated message from Nirmala Seetharaman and her finmin babus to industry groups complaints regarding ITC has been very clear – the businessmen must ensure that they trade only with genuine parties.

#GSThorror 👇👇 Then you wonder why everyone invests their savings in gold and real estate instead of investing in new businesses, after Modi & co do everything possible to kill the animal spirits.

#GSTHorror 👇👇

Blood boiling stuff. The indignity that these rascals make the taxpayers building this nation suffer. This is on you @narendramodi @nsitharaman You have unleashed these babu goons on us with unlimited powers. #Gsthorror

I am also having huge tax demands on a business that I already closed down. All these demands are due to denying input credit for taxes that I paid directly the department on Reverse charge, so there should be no basis for such an order. Ridiculous! #GSTHorror @FinMinIndia @Infosys_GSTN

🚨#BreakingNews: A new #TaxJustice battle is brewing! 💼 A brave bus operator across multiple Indian states took a stand against the 1st respondent (Deputy Commissioner, ST, Special Circle, Chittoor Division). Why? Because the taxman was overstepping his bounds! #GSTHorror 🚫👮‍♂️

Now we are well before the deadline... you will rectify your system on last dates and then say dont work on last dates... #GSTHorror

Well done @narendramodi & @arunjaitley You have spurred on #SabkaSaathSabkaVikaas with killing precision. #PrimeMoron #PetTommy #GSTHorror