Goods and Service tax – Basics and Compliance

1. What is Goods and Service tax i.e. GST?

Goods and Service tax is an Indirect tax levied by State Government and Central government on supply of Goods and Services.

As GST has subsumed many indirect taxes in earlier regime like VAT, Excises duty, Service tax, import tax etc. and removed differentiation between Goods and Services for taxation purposes, it is also commonly marketed as Good and Simple Tax.

GST is a taxing mechanism on supply of goods and services under which tax is collected by supplier and transferred to government.

Amount of GST to be transferred to government is calculated considering GST collected on supply of goods and service and GST paid on purchase of goods and services.

GST mechanism works in following simple steps

1. Collect GST on supplies made to buyers
2. Pay GST on purchases made for the business i.e. avail GST credit on purchases
3. Calculate the net amount to be payable or excess credit 
4. File GST returns showing supply and purchase of goods and services.

2. How much Good and Simple is the GST and what are the compliances?

Any businesses crossing specified turnover requires to apply and get GST identification number (GSTIN). Once the number is obtained, registered GST holder is required to comply with below on monthly / quarterly basis.

1. Charge and collect GST on Sale of Goods and service
2. Provide GSTIN to vendors to whom GST is paid and avail GST input credit on such purchases.
3. Prepare a summary of GST collected and paid during a month
4. File GSTR 3B for each month showing above summary.
5. File GSTR 1 on monthly or quarterly basis disclosing invoice wise sales made during the month or quarter along with details of GST collected.
6. Download GSTR 2A on monthly / quarterly basis and compare that report with GST input credit availed during the month or quarter.   

So, above stated 6 simple steps can complete your monthly compliance with GST. So yes, it really is a GOOD and SIMPLE Tax mechanism!

Ok, but we have not seen the other side of the coin.

Why GST becomes cumbersome or sometimes and headache to small businesses.

Here are some of the common problems

1. Which registration should a businessman to opt, Composition scheme, monthly scheme or quarterly scheme? Whether to obtain separate registration if having offices in two different states?
2. There are about 22 to 26 returns to be filed on yearly basis. That’s a huge number for a common small businessman. Further, delay in filing attracts huge penalties and interests
3. What is the rate to be charges on Goods and services sold? What are the details to be mentioned on Invoice? What if my invoice got cancelled? What is I don’t recover money against Sales, where I need to pay GST on that? 
4. How much GST input credit can I avail?  My GST credit no appearing in GSTR 2A
5. What are exempt services, what are zero rated supplies, what is GST cess
6. Can I take CGT credit against SGST or IGST or vice versa.

And list of queries can go on and on as one gets registered under GST and start its compliance.

3. You own a Vehicle; you need a mechanic too!

We all have one object in our life is to earn income, achieve financial goals. To reach that we run a successful business. Business is nothing but a vehicle to achieve our financials goals as fast as we can. GST is a speed-breaker whose compliance required you to reduce your speed and if you try to dodge, it can damage the vehicle. Regular speed breakers can make your vehicle weak and results less performance. So better go to a mechanic on regular intervals. 

We, the AVENIR ADVISORS are the Mechanic to your business vehicle. We have team of GST experts, team for GST compliance and Chartered Accountants associated firms for regular compliance of GST Annual return and GST Audits.

We offer services for your GST compliance in following ways

1. Advisory and assistance in getting GST registration suitable to your business. Discuss with our experts, understand various GST registrations types and analyze the best suitable for your business.
2. Support and assistance in filing your GST returns on monthly/ quarterly basis. We used to allocated dedicated compliance manager as a one point contact person for each of our clients. So, you know to whom to talk and get your queries resolved.
3. Report on reconciliation of GST credit availed with GST credit as per GSTR 2A is prepared at regular intervals and shared with clients as part of our service without any additional costs.
4. We offer a dedicated GST manager who will be in regular contact with the business owners to resolve any issues or challenges that can in implementation and compliance with GST related matters. 

Do visit our page on GST compliance services for monthly plans suitable to your business. 

Remember, cost of compliance is much more lesser than the interest and penalties for non-compliances.

Don’t stop at speed breakers and take a help of a good mechanic!

We, AVENIR ADVISORS with team of GST experts always thinking about Ideas that lies ahead.