GST, Goods and Services Tax had been the most discussed topic of last year and this year too GST is being discussed by everybody. GST, the tax reform, which is all set to come into effect from July 1st needs all the e-commerce businesses, to register under the new tax regime. GST is barely one month away to get into effects, but people still haven’t taken any concrete steps to register there bussinesses according to new text regime. In a recent survey by CA Club India, a platform for finance professionals, only 38% of the 1,100-odd respondents said they were ready for the rollout on 1 July.
GST rates in various counrties and ease of doing bus.rankings pic.twitter.com/Ma2AMysjss
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“The GST is not just a tax reform or even a business reform. It is a lifestyle reform that will change the way business is conducted in the country,” says Minal Agarwal, a chartered accountant who advises corporate houses on GST compliance and related issues. “Nearly 50% of Indian businesses are not aware of the changes that GST will usher in. Most of them think it is just another tax regime,” says Bharat Goenka, Managing Director of Tally Solutions. The level of unpreparedness is even greater among small businesses. Many small entrepreneurs feel they can bypass the GST if their turnover is less than Rs 20 lakh. That is true, but this exemption comes with its own set of problems. “If you are not in GST, the businesses you supply to will have to bear the burden of your compliance. They may eventually switch to vendors who are registered under GST,” warns Minal.
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“The GST structure ensures that no link in the entire chain gets left out. This will not only prevent tax leakage but also make compliance more streamlined,” says Sudhir Kaushik, co-founder and CFO of Taxspanner.com.
GST will require a very high level of compliance. Out go the hand-written ledgers, accounting books and notepads. Everything will now be online and will need to be updated regularly. A business will have to file 37 returns in a year (three returns per month and one annual return) per state. If it does business from offices in multiple states, the number of returns will go up accordingly.
Chairing the 16th Meeting of the GST Council in New Delhi, June 11, 2017 pic.twitter.com/W9UOqhv6zR
— Arun Jaitley (@arunjaitley) June 11, 2017
GST is a small step taken by the government to create uniform market in India. In the 16th meeting of GST council that includes all the state finance ministers, Arun Jaitely (Finance Minister) told media that, ” A total of 133 representations were made to lower taxes for different categories of goods and commodities. The council has lowered the tax rates for 66 items.”
According to the revised tax rates, GST on packaged items like pickles, ketchup, toppings, instant food mixes will get reduced. Earlier we had to pay 18% tax on such items, but now we will pay only 12% tax on such items. Tax on insulin for diabetic patients will also get cheaper, earlier it was 12% and now we have to pay only 5% tax on insulin. Young children and kids have something to rejoice about GST as GST will make drawing books tax free, children can now enjoy drawings. Cutlery will cost less – with the tax reduced from 18 to 12 per cent – and so will computer printers and CCTV cameras. These items that attracted 28 per cent GST will now be at the 18 slab.
As you all know, entertainment tax currently is imposed by state governments. And the range is from 20 per cent to 110 per cent. The weighted average comes to about 30 per cent. But state governments also give exemptions to film in their own language,” said Mr Jaitley and added, “So we have now made two categories for entertainment tax.” A film whose tickets are priced above Rs. 100 will attract 28 per cent while those film with tickets priced at Rs. 100 or below would be in the 18 per cent slab.
Small scale manufacturers and traders are also big gainers. Those whose annual turnover was less than 20 lakhs won’t have to pay any tax. Entrepreneurs whose turnover is between Rs. 20 and Rs. 75 lakhs, will have to pay nominal taxes under the composition scheme. To those who are still unaware of the fact, what GST is ? Here is the answer to their query, GST is one indirect tax for the whole nation, which will make India one unified market.