GST Bill : Here’s what you need to know

Sophie

The Goods and Services Tax (GST) is an indirect and comprehensive tax that was introduced in 2017. The GST bill was implemented with the intention of subsuming the indirect taxes that were imposed at every step of the production under the previous tax structure. Unlike prior taxes, GST is collected from the point of consumption.

How does the Goods and Services Tax work?

Businesses that provide goods and services must complete the GST online registration and acquire a Goods and Services Identification Number (GSTIN) if their yearly turnover crosses a particular stipulated threshold.

If you are running a business in the GST era, keep in mind that you may claim Input Tax Credit on the taxes you pay for the supply of goods and services only if you have registered your business for a GSTIN. If the output tax is greater than the input tax during the taxable period in question, the difference goes to the Government. However, if the input tax exceeds the output tax, you can expect the Government to send you the difference.

Keep in mind that you must issue a GST invoice that is compliant with the GST rules whenever you charge GST. The invoice must show the GST amount charged along with the cost of supplies. Also, be sure to issue this invoice within 21 days from the date of supply.

Another thing you ought to be aware of is the GST invoice format in excel.

Here’s what you need to include in the GST invoice:

  • Date of issuance of GST invoice
  • The words ‘Tax Invoice’ clearly specified
  • The serial number of GST invoice
  • Number of products or services provided
  • Name of the supplier along with the address and GST number
  • A clear description of the goods and services provided
  • Discounts offered if any
  • Name of recipient, along with the address
  • Total payable amount excluding tax, tax rate, and the total chargeable tax, all shown separately
  • The total payable amount that includes the total tax amount chargeable

What are the Advantages of the Goods and Services Tax?

The Goods and Services Tax has a variety of benefits to its credit. Here are a few important ones:

The provision of composition scheme for relatively smaller businesses

The GST Composition Scheme lets small businesses avoid the regular procedure for GST filing and, instead, pay the tax at a fixed rate. You may avail this scheme if your business yields a yearly turnover that is less than Rs. 1CR. The composition scheme is known to incentivize small and medium-sized businesses to become GST compliant.

Straightforward and Easy to follow GST online Registration

The GST registration can be carried out online, which saves you the trouble and time of physically visiting the Income Tax office and waiting in line to get this done.

Clear rules and regulations for E-commerce operators

Under the previous tax structure, E-commerce tax laws in the country were vague and difficult to comprehend. However, the introduction and implementation of GST have remedied this issue. If you are using E-commerce for your business, you should have no trouble following the rules that govern E-commerce.

What are the Disadvantages of the Goods and Services Tax?

While GST has a bunch of advantages, there are some demerits you ought to be aware of. Here are the main ones:

  • One of the primary disadvantages of the GST regime is the increase in capital and time to update the accounting software or purchase all new software to ensure businesses are GST compliant.

  • Additionally, companies have to onboard tax professionals to make sure employees operate under the stipulated GST rules. In other words, this is an operational expense.

  • Small and medium-sized businesses have to face a hike in tax because the yearly turnover threshold to register for GST is Rs. 20 Lakh.

If you are new to the world of Goods and Services Tax and are looking for a decent grip on how things work, this should be enough to get you started on everything that is GST-related. If you have a business, make sure you complete your GST online registration to avoid penalties.