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:
- Legal Aspect under GST: Registering the company under GST is the foremost things required for any business in 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
A Supplier to ECommerce aggregator.
Case 1: If your annual sale is below 20 lakhs, you’re exempted from registration, in other words, you don’t need to pay GST. But, obtain a GST registration if sales are likely to cross 20 lakhs.
Case 2: If your annual sale is between 20 – 50 lakhs. You can opt for GST Composition Scheme, which allows you to pay a flat tax ( likely to be in the range 1–2%) based on turnover.
Case 3: If your annual sale greater than 50 lakhs – You have to pay GST like a regular dealer.
2. Associating with good Wholesalers and Distributors.
These wholesalers should be well connected for reducing the supply time. One must keep enough variety in the stock to make sure the customers stay in the shop and appreciate the backend efforts. The more efficient the supply chain and logistics is, the better is the retailer placed to come up with offers and discounts.
3. Accounting, Billing/Invoicing, Taxation and Filing GST Returns:
This is where the actual trouble lies. Business is not just about dealing with profits and losses, it’s much more than that. Especially under GST, starting a business is easy, but the real challenge lies in the management of it.
Under the previous indirect tax regime, Retailers usually escape the tax liability as there was no mechanism by which their actual purchase and sale can be traced. Most of their transactions were done in black, meaning no invoice is issued to the buyer, and eventually, no entry is posted in the books for such sales.
Whereas, under GST, tracking every incoming and outgoing transaction is important to make sure that business runs on an optimum level. It is also widely agreed that GST will affect in a series of changes to how businesses will operate and the Retail Industry will be no exception.
Accounting books under GST
Record keeping and compliance in GST is more elaborate and hence we need a complaint accounting software. GST accounting entry is one of the main issues that you will have to handle. All business can now maintain the following records in their place of business.
- Manufacture of goods
- Inward and outward supply of goods and door services
- Stock of goods
- Input tax credit
- Output tax payable and paid
It is important to maintain such records for years and it is much easier to hold them in an electronic form.
Two types of Invoices to be issued under GST
Supplying goods or services to another taxable person under GST will require issuing an invoice in a prescribed format.
- The taxable invoice which is issued to pass GST credit.
- Bill of supply has to be issued when the supply is exempted or the supplier is under composite scheme i.e no GST credit is passed on.
1. What is the time limit for issuing invoices?
- Providing services GST invoice must be raised within 30 days of offering services
- In case of goods, an invoice must be raised at the time of removal of goods from your premises.
2. How many copies of invoices will be required?
In case of providing services,
2 copies of invoices: 1 – Recipient, 1 – Supplier
In case of selling goods,
3 copies of invoices: 1 – Recipient, 1 – Supplier, 1 – transporter
3. How to raise GST compliant invoices?
To issue a professional GST invoice and make compliances easier you will have to adopt the current generation technology. In case you have been using an accounting software, for now, it is time to upgrade to a GST ready software.
But, Beware! Businesses should focus on business and not on accounting.
Unfortunately, most of the accounting software is built for accountants, not for a businessman. As a retailer you will not want to spend time on your accounts rather you would want to spend the time to improve your business. Moving to GST ready Vyapar accounting software, the preferred accounting online software would be a smart choice to get free of accounting tension. Raising professional GST invoices can be Hassle-Free. Moreover, it calculates GST automatically. Vyapar App certainly takes care of the taxation because it is already GST compliant. To learn more about Vyapar GST accounting click here.
The Vyapar app comes with inbuilt features like inventory management, transaction recording, GST enabled invoicing and many more. Vyapar app helps retailers keep a track of all types of transactions and generate custom reports and balance sheets. To operate such software, you don’t need an accounting degree. At the last, if you’re spending time on learning accounting rather than spending the time to grow your business, make a move to Vyapar App today!!!
Well, all in all, to be a profitable retailer, you will have to learn the rules of the business and then you have to play better than anyone else. It is more important to do what is strategically right than what is immediately profitable. Moreover, you cannot get into retailing for the fashion of it. No matter whatever retailing you do, you can’t be profitable/successful unless and until you’re passionate and responsible about it.
Adopt right technologies to ease up your GST burden and run your retailing business Hassle-Free.