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January 13, 2021

Cloth trader hangs himself after receiving GST notice

by CA Shivam Jaiswal in GST

Cloth trader hangs himself after receiving GST notice

For the past 9-10 months the COVID 19 pandemic has forced India into a lockdown. Most of the countries small businesses which relied on physical availability of customers have had the most hit. Small business revenues have plunged everywhere hits. Due to the lockdown industries, shops, construction sites and businesses have also been forced to shut down. This has greatly impacted the workers and daily wage earners who depend on their daily earnings to survive.

The GST collections, one of the prime sources of revenue for the states, was also seriously compromised. Several state governments reported serious fall in collections that were as high as 80-90% some cases.GST Department has been sending notices to taxpayers, in order to boost up its collections. Recently a 50-year-old cloth trader from Isanpur, Bharat Chandel, committed suicide at his house by hanging himself after receiving a GST notice.

What led to the suicide of the individual?

  • Isanpur police which wasexamining the case said Chandel had no work for about three years.
  • Also due to the lockdown, the money he had invested in a cloth business also was not giving returns.
  • Chandel, who is survived by his wife and two children, had set up a warehouse for his cloth business three years ago at Balaji Estate in Isanpur.
  • On 24thDecember, he received a notice to pay Rs 2.44 lakh in goods and services tax (GST).
  • He was stressed about how he would be able to pay the tax,” a police source said.
  • On 6th of January, when his wife and children were on the ground floor of the house, Chandel went to a room on the first floor and hanged himself with a saree.
  • When his wife went up to wake him for tea, she discovered him hanging from a ceiling fan.
  • On hearing her screams, neighbours rushed in and took Chandel to LG Hospital but he was declared brought dead

Inspector J V Rana of Isanpur police station said they registered a case of accidental death and are probing the case.

It is important to remember that no matter how severe the situation is, suicide can never be the answer. In the case of GST, the liability to pay tax does not end with the death of a taxpayer. If the business is carried on by the legal heir/representative then the heir/representative will be held liable for the unpaid dues under GST.

If the business is discontinued, whether before or after death, the legal heir will be liable to pay the due amount. However, the heir will pay out of the estate of the deceased only to the extent to which the estate is capable of meeting the amount. The legal heir/representative will not be personally liable for the pending dues.

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