GST: Is your small business ready?
With GST implementation deadline closing in, by following some simple but effective steps you could ensure your business is GST compatible.
The rolling out of arguably India's biggest tax reform in the form of Goods and Service Tax is almost nearing completion. With the official deadline of GST implementation fixed at July 1, 2017, GST once implemented will help business flourish offering relief from various indirect taxes levied by the Central and State Governments and replacing it with a single and streamlined tax structure.
Although GST is targeted to rollout as per its deadline of July 1, 2017, Traders association Confederation of All India Traders (CAIT) has requested the government for an extension in the deadline. Here is an insight into ensuring whether your small business is GST ready and steps you could take to ensure your business gets GST compliant at the earliest.
The first step towards embracing the goods and service tax starts with registering your small business for GST and getting a GST number. All existing taxpayers of VAT, Service Tax, Central Excise as well as new business owners could register for their GST number at the official GST portal at https://www.gst.gov.in. The deadline for GST registration for businesses was fixed at April 30, 2017.
Three steps to ensure your business is GST ready
If you have already applied for a GST number or have received your GST number from the GSTN portal, here are further steps to ensure your business is GST ready.
Update technology by revamping ERP or accounting systems
Along with the annual returns, businesses will now need to file three returns each month for details of supplies, purchases and sales respectively. The enterprise resource planning (ERP) or company's accounting system must be tweaked for expense recording and invoice generation. Also under GST regulations companies are required to claim eligibility for input tax credit which should be managed by an accounting system compatible with GST bylaws and regulations.
Know the taxation rates for your goods or service
The taxation rates under GST have been fixed by the GST Council under a four tier tax structure. Taxation rates will vary from 5, 12, 18, and 28 per cent along with an applicable cess for luxury and sin goods. All goods will get a HSN code and service a SAC code for tax computation. Ensure you are aware of the tax rate applicable for your organization as per the product and service on offer and its relevant tax bracket under GST.
Make use of SME helpline
Adopting new tax reforms like Goods and Service tax may mean businesses and business owners may need to devote some time exclusively to ensure compatibility. Many of the small and medium enterprises especially those involved in dealing with the unorganized sector are finding it hard to adopt the new tax structure. If you are a SME, both Federation of Indian Micro and Small & Medium Enterprises (FISME) and Small Industries Development Bank of India (SIDBI) have launched a helpline to resolve all common and specific queries in a maximum time of 48 hours.
GST is important for every business enterprises. What's your take on this?