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SMALL BUSINESSES UNDER GST (PART-III)(Issues and Impact)

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 6-3-2017 - Invoicing A registered taxable person supplying taxable services shall, before or after the provision of service but within a period prescribed in this behalf, issue a tax invoice, showing the description, value, the tax payable thereon and such other particulars as may be prescribed. In case of traders or retailers, a memo or bill shall constitute invoice. A registered taxable person shall, on receipt of advance paymen .....

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d person: S. No. Return Periodic return to be filed for To be filed by Persons not opting for Composition Scheme 1. GSTR-1 Outward supplies made by taxpayer 10th day of succeeding month 2. GSTR-2 Inward supplies received by a taxpayer 15th day of succeeding month 3. GSTR-3 Monthly return 20th day of succeeding month 6. GSTR-6 Return for Input Service Distributor(ISD) 15th of the next month 8. GSTR-8 Annual Return By 31st December of next FY Persons opting for Composition Scheme 4. GSTR-4 Quarter .....

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required Information Technology support to this sector and as such, there lies a good opportunity for software industry from small businesses and retail trade. GSTN has appointed over 30 GST Suvidha Providers (GSPs) who will be the conduit or interface between the taxpayer and the GST network (GSTN). Small business can avail the services of GSPs to comply with the GST requirements including invoking / return filing etc. Rate of Tax Under GST law, GST Council has proposed four-tier rate structur .....

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vices through electronic commerce operator like Flipkart, Amazon, Snapdeal etc. to consumers, then e-commerce operator shall collect TCS @ 1% from the amount received from the consumers and then pay the balance amount to the traders/vendors. In such case of e-commerce transaction, there will be blockage of working capital in hands of traders. Impact on Small Businesses Small business would be positively impacted in GST regime as: There will be no dispute as to classification of goods and / or se .....

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Most of the forms used in VAT and CST will be withdrawn. On the fillip side, GST may impact small businesses / traders negatively owing to following - Rate of GST may be higher for certain goods / services Most of the exemptions / concessions may be withdrawn or rationalised Stock transfers, unlike present, shall be made liable to GST Return compliances will substantiality increase Job works may be made taxable where as presently, they are exempt against prescribed form. Administrative Control .....

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5 crore threshold will be divided equally between the Central and State administrations. The estimated number of total active indirect taxpayers (including those paying Value-Added Tax or VAT, Service Tax and Excise) is around 10 million, of which around 4,00,000 are common to the Centre and the States. This leaves around 9.6 million taxpayers, of which around 6.6 million are VAT assessees, 2.6 million are active Service Tax assessees and some 400,000 assessees are registered under excise. But a .....

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ting that there will be around 8 million taxpayers under GST initially. Most of the Service Tax assessees are in the range of ₹ 20 lakh to ₹ 1.5 crore and the CBEC will now administer only 10% of them. Way Forward With the implementation of GST, which is likely to be done by July, 2017 now, small traders and retailers will be benefitted as the implementation means a seamless integration of goods and service transaction across the states. It will have benefit at different stages of th .....

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ut tax credits can also help fetch better margins. Along with saving costs at back-end, GST implementation is seen as an answer to the major pain point for the industry -Rentals. Rentals are one of the main costs of retailing industry and it attracts service tax at 14.5 per cent. Currently, the retailers cannot set off these costs like the other industries. This is considered as an additional cost of operating in this industry which is unfair to them. Under GST, taxes on services would be availa .....

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iate optimal pricing that would lead to incremental savings. Though with the proposed structure of GST, dealing with multiple authorities implementing the law will be challenge for companies. Companies will have to think of procurement in a granular way. Right from third-party contracts to understanding supplier's cost structures to where he will get credits, each aspects will have to be studied minutely. And that would require a deep dive into even vendor supply chains, something that wasn& .....

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oothly. To drive savings and compliance, the supply chain and finance department will have to work in tandem. Core to success of GST compliance is the ability of the company's systems to capture correctly the right set of credits for what your are paying for and at the same time also ensure that your customers are able to claim their credits. For companies that have distributed manufacturing, consolidation can bring about more efficiency. After the regulations are finalized, companies will h .....

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