Exactly at the stroke of 12:00 AM on 1st July 2017, a majority of eyes in India had glued to television sets. It was on this day that the nation made history. It was on this day that Goods & Service Tax or GST was introduced to the country, thus, personifying the phrase – One Nation, One Tax, One Market.
Now, rather than multiple taxes, the goods and services will fall under five tax percentages – 0%, 5%, 12%, 18% and 28%. As per the finance minister of India, the new tax system will help in curbing the inflation and non-payment of the tax will be difficult.
While GST has impacted the lives of common people by increasing and decreasing the prices of many goods and services, it has also influenced businesses and business owners to a great extent. There are clouds of doubts and confusion hovering over the heads of businessmen. While some are looking for the best GST accounting software for their businesses, there are others looking forward to availing consultancy services on GST.
Here are top ten things about GST that every business owner should know:
- GST Means Less Tax Burden, is it True?
Before you, as a business owner, go out and find GST billing software and get it incorporated, it is quite necessary to get the facts clear about the new tax system.
The Goods and Services Tax system aims at eliminating the cascading effect of multiple taxes. After utilizing all the inputs credit, it will bring down the burden of the tax down based on the usage of the credit. Also, the credit can be claimed once it matches the invoice of the respective suppliers.
- What Are the Components of GST?
Goods and Service Tax includes central and sales tax. Thus, on the bill, the tax structure is mentioned as:
- SGST x%
- CGST x%
Because GST has all taxes merged in it, state government and central government seek their share in it.
- I have a Small Business. Do I need to Pay GST?
It is quite important to know the eligibility criteria to pay Goods and Services Tax. Small businesses with their annual turnover of INR 20 Lakh have been exempted from paying GST.
- What About My Working Capital?
It depends on how much compliant your vendors and partners are when it comes to filing the taxes. In case your partners are non-compliant to filing returns, the requirement of your working capital increases. Also, in the long run, GST aims to vanish all those businesses that are non-compliant to filing their taxes.
- How Can I Prepare my GST Return?
It is prepared based on your invoices that have arisen in the previous financial period. You need to upload or showcase all your purchase and sales vouchers along with other information such as advances with which the returns are automatically generated. It is quite hard to remember and take care of all the sales and purchase registers manually, thus, many businesses have already implemented GST accounting software into their invoicing system. These are advanced GST POS systems that make the accounting quite easy.
- How Can I Make My Business GST Compliant?
You can do so by ensuring that all your purchase and sales transactions are recorded in your GST POS system and you report all them to the concerned authority. GST is a technology-based tax solution, thus, it is quite necessary to search and adopt a reliable GST-enabled billing software that could empower you in compliance.
- What is the Payment Procedure of GST?
After your GST registration online, you can file your return through GSTN. After the valid tax credits have been adjusted, you can pay the amount online.
- I am into Alcohol Business, do I need to Pay GST?
No. Products like alcohol, diesel, petrol, turbine fuel have been kept out of Goods and Services Tax as of now. The decision on these products will be taken later.
- I am into the Manufacturing business. How will the new tax system of GST affect me?
It’s quite early to comment on GST impact on manufacturing business. As a manufacturer, you might have to wait for few weeks to know the impact that GST will have on your business. The same applies to wholesalers and distributors. The manufacturers may have to revise their prices based on the GST impact. This could affect the consumers later.
- My Business is listed on Stock Market. Is there any GST Stock Market Effects?
There have been many highs in the stock market since the announcement of GST. However, the economic pundits predict that the market needs some time to adjust to the new tax structure. This could lead to partially damage and affect the corporate earnings in short terms but the earnings will see a new high in the coming time.
The Goods and Services tax is sure to revolutionize and transform the Indian economy. A better national market, ease of doing business, improved tax compliance, etc. are some of the biggest benefits of the new tax system. Further making the implementation easy for the businessmen are some of the leading free and paid retail POS software.
All in all be it, businessmen or consumers, GST will surely yield benefits for everyone who is a part of the Indian economy.