Suppose you want to do something constructive for your country; suppose you establish contact with a Paris boutique and get a contract to supply it with fashion garments.

Land as well as labour are cheaper across the border, so you decide to set up a factory in Noida, also known as the city of Gautama the Buddha. Before you start, let me give you a preview. You will think I am fantasising; but every one of the experiences I describe below happened to a real, flesh-and-blood exporter like you.

You call in a contractor to build you a factory. Make sure you deduct tax at source from whatever money you give him. The money is not for you; by the seventh of the next month you had better rush to the nearest central government treasury and deposit it.

Before you step into your factory, you had better register with the UP trade tax department. Nowadays it is called a sales tax, but it is governed by the UP Trade Tax Act of 1948. Go and get Form XV and apply to a trade tax officer for registration under Section 8.A (1) and Rule 54.

Compared to what will follow, this form is simplicity itself; it asks for particulars and addresses of the owners and directors of the business. After suitable persuasion the trade tax officer will grace your establishment with a visit, and give you a Certificate of Registration under Rule 55.

Now you find that you have to source all your fabric from Delhi. You had better make sure that every shipment from Delhi is accompanied by a bill, a challan, and  --most important -- Form XXXI in triplicate.

It must contain first the name, address and registration number of the supplier, then a description of the goods including their quantity, weight, value in figures, value in words, challan number and date; and finally, the registration number of the truck, the name and address of its owner, and -- most important -- the driver's full name, parentage and driving licence number.

All three copies must be signed by the supplier in Delhi, the receiver in Noida, and -- most important -- the truck driver. If your supplier forgot to send Form XXXI with the goods, they will be impounded. The trade tax department of UP will release the goods on payment of 40 per cent of the value. It would save money if you make an informal understanding with the concerned officer.

Suppose your Form XXXI is in order and the goods arrive at the factory. Do not, for goodness' sake, throw it away. Within 48 hours of its crossing the border, it must be delivered intact to the trade tax department. The clerk may hesitate to certify that it was so delivered -- if he does, you may have to make a bargain with him.

If you survive a year of form-filling and visits to government offices, you will get a notice from the trade tax department, asking you to give details of purchases (including bill numbers, dates, amounts, names of suppliers, quantities, weights, value of goods etc) from registered dealers within UP, from unregistered dealers within UP, of purchases

from outside the state (bill numbers, dates -- well, you have got the idea) -- to be accompanied by Form C, of goods worth less than Rs 5,000 from outside UP, and work contracted out (name and address of contractor, amount of contract, tax deducted, dated on which it was deposited etc), details of opening stocks, purchases and closing stocks of raw materials, work-in-progress and finished goods (distinguished by material, design, quantity, rate and amount), and of sales, distinguishing between sales in UP, sales in India outside UP and sales outside India.

When you do this, the assessing officer will tell you that you siphoned off some of the raw material and sold it in the market to avoid sales tax. You may give him a demonstration of input-output coefficients and show that the finished goods produced must have exhausted the raw materials used.

Then he will accuse you of not showing the entire production in the books and selling off a part without paying sales tax. You may want to start all over with the demonstration. But he may not have the patience; an informal arrangement may be preferred.

You do not have to pay the tax on exports, for which you must produce more details, such as challan, transport receipt, airway bill etc; but if the pretty Paris boutique owner does not send the money within six months, the trade tax officer will ask you to pay tax on the exports.

When you have satisfied all the babus and are just about to rest, you will get a phone call from government auditors in Lucknow. They will call you over to Lucknow and accuse you of the same things as the trade tax officer. Having satisfied him will not satisfy with them; informal understanding must be reached with them separately.

Suppose now that the beautiful boutique is not satisfied with the sequins you sewed on, and sends you ones to put on the next consignment. You will have to pay duty on those expensive sequins; but you can get a refund.

For this drawback you must apply in another form, which must be attested by the customs at the port of shipment. Chances are that the customs officer will write on the form: "Inspected lot and examined 5%. Checked description, qty. Checked AEPC validity. Fabric does not seem to be made of fibre claimed. TM of sequins does not seem to be French. Value, stated at 80 Fr Francs, appears on high side; Rs 80 may be closer. If approved, RS sample may be sent to Verification Sec. Signed L.K. Hungry, Dty AO. Countersigned I.M. Greedy, AO."

Well, you have had it; that shipment will not reach the buyer in time, who will not pay you, and you will have to close down. You should have had the foresight to reach an informal understanding with the customs before they got their claws into your lovely dresses.

If you survive that, your journey has just begun. For soon you will receive a notice from the central excise department asking you to register yourself, for the finance minister lowered the threshold for small textile firms in the last budget. You may ask for exemption saying you are an exporter.

But that shipment that customs held up: where will you sell it but to a kabadiwallah? And that will make you subject to excise duty -- or Cenvat as they call it these days. Get ready to fill Form Number A-1, and make sure your registration is in Form RC-1; it will take some gentle persuasion to get it.

You will have to file excise returns by the fifth of every month -- opening stocks, closing stocks, purchases, sales etc in agonising detail. And when you export, you had better call the range excise officer to seal the packages.

He will need to be persuaded, as also the customs officer, from whom he will want a certificate that the goods have left the country. Lucky goods.

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