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NO EASE OF BUSINESS FOR SELF EMPLOYED AND SMALL ORGANISATIONS- GST WILL MAKE LIFE DIFFICULT

Goods and Services Tax - GST - By: - CA DEV KUMAR KOTHARI - Dated:- 20-6-2016 Last Replied Date:- 26-6-2016 - Ease of doing business: Government of India (NAMO government) is promising ease of doing business. However, feeling of business men is that doing business is becoming very difficult day by day. More formalities and obligations are being cast on businessmen - even on small self-employed people. No ease of doing business for small supplier and service providers

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se of business will be robed by GST from such self-employed entrepreneurs- suppliers/ traders and service providers. Annual monetary limit under model GST: As per model GST any person doing business of supply of goods and services will be required to get registered if his gross receipts during a year is Rs four lakh in NE region and Sikkim, and ₹ 9 lakh for other part of India respectively. Playability of GST will be just after having gross turnover of another one lak .....

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en a small business has some fixed expenses on account of rent, interest, depreciation of assets, electricity, employee/ outsourced services cost, up-keep repair and maintenance of business space and machines, mobile and other phones, local taxes etc. For examples, even a rickshaw puller has to pay rent to the Rickshaw owner, rent for parking, repairs expenses for rickshaw, local tax, road tax etc. Now-a-days even a Rickshaw Puller is required to have mobile phone so that his passenge .....

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NE Region is itself a difficult place to live and work. The limit of ₹ 4 lakh is not at all justified. A small traders at turnover of Rs.400000/- in NE India will not have any income, rather he may be incurring loss. In such cases an additional burden of getting registered for GST on achieving turnover of Rs. four lakh and paying GST once gross receipts exceed Rs. five lakh is not at all justified. Other parts of India: In other parts of India also a smal .....

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mits will be increased substantially to at least ₹ 20 lakh. However, the same remained unchanged and now in GST also same amount is kept with further substantial reduction for states in NE and Sikkim state. In various states also for Sales Tax / VAT the exemption limits ranges around Rs. ten to fifteen lakh per annum. And these limits also require revision. Therefore, threshold limit for liability for registration and GST payment need to be revised. Presum .....

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viders because for achieving breakeven itself, a turnover of 15-25 lakh is required. Only after achieving break even one derive net profit. Estimation of income vis a vis turnover / gross receipts: In case of supply of goods, major part of turnover goes into cost of goods sold purchases price plus expenses. Then fixed and variable expenses are to be met out. In case of service also fixed and variable costs are involved. Breakeven point is to be achiev .....

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of services Rs.12,00,000/- Turnover required to earn taxable income: In case of self-employed people assuming a gross profit of 10% in case of trading and 15% in case of service the turnover required for earning income at least equal to basic exemption under Income -tax Act will be as follows: In case of supplies: Turnover required for break even i.e. 18,00,000 + (2,50,000 / 10%) = 43,00,000/- In case of services: Turnover requir .....

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ion and to reduce compliance cost and make business easy. UP ward revision of thresh hold exemption for GST is required: There is no justification of burdening with GST requirements such small traders and service providers who are not even able to earn income which enjoys basic exemption. In case of NE and Sikkim about half of normal exemption limits has also no justification because in those areas already it is more difficult to carry business due to lack of inf .....

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h For service providers ₹ 25 lakh The above are just half of limits prescribed for tax audit report u/s 44AB. - Reply By SANJAY MEHTA - The Reply = Now a days a normal business entity whose turnover is 40 lakhs annually needs following expenses to run his business at lowest smooth level.1. Rent of the shop. 2. Electric charges.3. Salary of the staff at least 2 nos.4. Trade licence fees both shop and Godown. 5. Profession tax.6. Accounting charges.7. Charge .....

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