Being a Small Business, if you are having trouble keeping track of your money, you may think that an Accounting Software will solve your problem. Watch out! You might be heading towards higher complexity.
Look, you didn’t start your Business to track MONEY— you opened it to make MONEY. isn’t it?
Certainly, starting up on your own mean, you’ll need to run everything from serving customers, purchasing inventory, billing and many such tasks which is often a tough job for anyone. Along with that you also have to manage your cash flow which is an extremely critical task. Being a Business owner, making sure that the cash wheel is rotating smoothly could be a challenge. Continue reading “Are you counting cash instead of making cash? Business – say NO to Accounting!!!”
GST council on Friday has decided to fix the GST on Restaurants reducing tax brackets and hence the burden.
Here’s why eating out could become cheaper:
5% GST on…
- All independent restaurant Ac or non-AC.(which previously was 12% and 18% respectively)
- Takeaway food.
- Restaurants in hotels with room charge less than Rs 7500.
[No input tax credit for these Restaurants]
18% GST on…
Starting November 15, daily use items could cost up to 10% less than before. Take a look at those items which have been trimmed to 18% GST tax rate.
Summary of 23rd GST Council
The GST Council has reviewed the tax rates, returns filing cycle, Late filing fees and much more on 10th Nov 2017, bringing in some relaxation to businessmen, traders, and consumers.
All things considered, tax rates on 177 items are brought down to 18% from 28% to provide relief to consumers and businesses.
- Many of the items and services which were earlier taxed at 28% now attracts the tax of 18% only. The list includes wire and cables, Furniture, mattress trunk, suitcase, detergents, shampoos, hair cream, hair dyes, makeup, fans, lamp, rubber tubes and microscope. Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing powder, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches.
Do you wish to sell products/services directly to consumers? Well, then being a retailer is the right choice for you.
A Business or a person selling goods to the consumer, as opposed to a wholesaler or supplier is rightly called as a retailer. Not every manufacturer can provide end to end sales and similarly, consumers cannot reach out to manufacturers for their needs. Retailers are the link between manufacturers and end consumers.
To become a retailer one must finalize the finished goods to take to the end consumers. For example, some of the popular categories are food, auto-parts, general stores, apparel, home furnishings, electrical and electronic appliances and home improvement.
How to Become a Retailer?
Once a person chooses his or her products/services to sell, then there are legal aspects like registering a company, rent a space/shop, manage supply, delivery model, revenue model, tax management and compliance, etc.
Let us take a look at just the mandatory steps: Continue reading “Become a Retailer in India”
Reverse Charge is a system where the receiver of the goods and/or services is liable to pay GST instead of the supplier. Sounds simple? But it isn’t! Here’s a break down of its cause and effects.
Reverse Charge provision states as:
The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
GST for SME’s had been introduced to make indirect tax administration much more hassle-free. But, instead, it seems to have caused much chaos in the country. In fact, there have been many GST misconceptions running in traders minds, causing confusion & fear among them.
Well if you’re a trader or planning to become one, Consider reading these to feel like being on top of the world: Continue reading “Watch out! GST for SME’s can help as well as hurt”
GST India – Goods and Service Tax
What is GST India??
- GST is a combined tax replacing all the indirect tax levied by State and Central government of India.
- Basically, GST = Central Sales Tax + State Sales Tax + Excise duty + Service Tax + CST + Surcharge + CESS + Luxury Tax + Entry Tax + Purchase duty + Vat + Entertainment Tax and many more…
Who should prepare for GST India?
You have to register under GST India if your/you’re
- Annual Turnover crosses 20 Lakhs.
- Website exists from where the supply of goods and services takes place.
- Registered for VAT under previous law
- Making Interstate transactions
- Paying tax under Reverse Charge mechanism.
- The producer of the Final Product.
- A Service Aggregator like OLA, Uber
- An E-commerce Aggregator/Operator like Amazon, Snapdeal etc.
- A Supplier to ECommerce aggregator.
- A Casual Taxable person – self-employed.
- A Non-Resident taxable person having no place of business.
How does GST India impact you?
If you’re a business owner, you will witness a complete transformation of the taxation system.
- Firstly, all registered merchants get a GST registration number. Their permanent account number linked to it.
- Secondly, there will be additional 36 returns per year to be filed on a single registration.
- Moreover, every Financial Transaction will come under the close Scrutiny of the Tax Department.
- That being the case, a merchant will be answerable to even the Smallest Transaction he does without sufficient knowledge of intricacies of the law.
- Additionally, they will be increased Compliance Burden: Three returns in a month to maintain will make their job harder. In other words, they will need to maintain a proper account of everything they do.
- Eventually, the merchant would need to stay updated with technology since the way in which accounts are required to be maintained under GST, they can only be maintained if a Proper Technology is used.
Why GST and Why Not?
Well if you’re a small trader or planning to become one, here are some eye-openers about GST India that makes you smile:
- Starting a Business gets within your reach: Since there would be lesser fees of procedural requirements and zero complications of different indirect tax rules across different states.
- Small Traders become Small Taxpayers: There has been an increase in the basic exemption limit to 20 lakhs, which is a 75 percent relaxation in the limit for small traders and manufacturers.
- Speed delivery of your Goods/Services: As the entry tax at check posts and interstate borders is expedited.
- Happy Manufacturers as well as Consumers: Due to the reduction of tax both for the manufacturer and the end user. For the simple reason that the manufacturer gets the benefit of input tax credits and the end-user pays only the tax charged by the last dealer or the retailer in the supply chain.
Every advantage may seem to have its own disadvantage. When in fact, GST India need not negatively impact SMEs (Small to Medium Enterprises). Whereas, it could surely increase the burden of more compliance if you aren’t prepared well.
- Managing ambiguity might become the biggest challenge.
- Moving from current tax era to GST would be a Period of Pain and inconveniences if SME’s aren’t embracing technology and processes in their accounting work. To put it briefly, this would require SME companies to inevitably have an Accounting Software System for billing and filing.
Where’s the solution?
Expectedly, businesses failing to comply with GST are failing in business too. All in all, Is my business GST-ready? Is the question to yourself. At any rate, even high-performing rebels in your industry need to ‘Manage up’. To put in other words, you need to “Manage up” too.
Fact is that under GST India- ”The process of tax payment, Tax credit, and refund of GST would be carried out electronically”.
Evidently, being GST compliant needs updating your Digital Accounting System. Again, with nearly 70 percent of small businesses in the country are yet to adopt digital technology in their business format, it is going to be a huge challenge for them to computerized themselves in the shortest period.
Fortunately, there is Accounting & Billing software like VYAPAR, which is GST ready. For SMEs, using such accounting software could be a good starting point. Using such Billing software results in a reduction in paperwork and time wasted in paying taxes.
Click here to see how to install Vyapar App to your Desktop to remain GST compliant.