How Surat’s Textile Traders Avoid GST By Smuggling Cargo Through Private Buses

Trade & Policy

How Surat’s Textile Traders Avoid GST By Smuggling Cargo Through Private Buses

Surat’s textile traders have started illegally smuggling out cargo worth Rs 10 crore to various client destinations across India like Delhi, Rajasthan and elsewhere by using at least 100 private buses every day, thus avoiding payment of GST, according to industry sources.

According to a trade association representative, the government is aware of this modus operandi but is not taking appropriate action due to the impending Gujarat assembly elections, which has begun to hurt traders who pay taxes.

The buses which are supposed to carry passengers are loaded with consignments of clothes and are sent across states without paying any cess under GST norms. Instead of transporting goods in trucks with the necessary documentation, they illegally smuggle out clothes worth Rs 10 crore every day through private buses, he said.

Private bus operators are only too happy to carry the goods without any GST number, Form 402 or any other document, as goods are loaded from 8 am in the morning to 10 pm at night.

Parcels weighing 40 kg to 50 kg are loaded in these private buses an hour and a half before departure. Private bus operators have also seen their income double instantly as a result, since they charge anywhere between Rs 300 to Rs 400 for such illegal consignments.

In the past, only urgent consignments were dispatched through buses but after GST came into force, this method has been widely adopted by Surat’s textile traders. The equivalent of 50 trucks of goods is sent in 100 private buses every day.

Private bus operators have also devised their own receipt system to identify goods and this illegal channel is resulting in huge loss for business owners across thousands of Surat’s small-scale trading, weaving and dyeing units, which together churn out around 40 million metres of fabric every day.