The Complete GST Guide
GST has simplified taxation with a single unified tax. Businesses can manage GST taxes much more easily with low-cost software available. Further business can reduce GST expense with an Input Tax credit.
We covered the basic and complete GST guide. Let’s start our GST guide for small businesses with an easy GST filing process!
The Goods and Services Tax (GST) is a unified, destination-based indirect tax system practiced in India. This tax is levied on the goods and services, adding value at each stage of the supply chain. As goods and services pass from the supplier to the consumer, they are taxed indirectly. The consumer who is at the end of the chain has to pay only the GST charged by the previous supplier. This comprehensive tax replaces all other indirect taxes. The central excise duty, state VAT, central sales tax, purchase tax and many others are all covered. The GST returns is a document that the tax authorities for calculating tax liability. As a business person or firm, filing a GST return should be a priority. The GST law stipulates that traders, manufacturers or service providers in India register under GST to file returns. Details of their sales, purchases and paid taxes must be furnished with the administrative authorities. This process has to done electronically on the GST portal.
Only registered individuals can file returns. It is mandatory for every company or individual that supplies goods and services to register under GST. If your business has an annual turnover that exceeds Rs. 20 lakh you have to register under the GST Network. This is applicable to all Indian states other than the north-eastern states. A unique Goods and service 15-digits Tax Identification Number GSTIN will be given to you upon registration. This registration identifies you as a supplier who can avail input tax credit. It also allows you to collect GST from recipients of goods and services. To register, go to the GST portal.
GST returns can be filed in different forms based on the nature of the transaction and registration. The GST regime requires that businesses file two monthly and one annual GST return. The main returns to be filed are GSTR-3B and GSTR 1. GSTR 3B is to be filed every month and GSTR 1on a monthly or quarterly basis. The registered entities will be required to file GST returns even if the entity has not done any business during any period.
Types of returns under GST include;
You need to have records of the related sales and purchases invoices for the given period. This is because GST returns requires these monthly, quarterly or annually.
With or without sales, purchases or a turnover, GST return must be filed. It is used to show that you fall below the taxable income. As a result, you did not pay taxes during the period. If you have less than Rs.2.5 lakhs of income in a year, you are not required to file NIL return. However, it is recommended that you file NIL return, even if the taxable income is less than Rs.2.5 lakhs, if you had filed in the previous year. You will input zero values in all the relevant fields of your GST Return form online. Failure to file this on time will lead to a penalty of Rs. 100 per day.
As passed in March 2017 and came into effect in July 2017, GST is a form of indirect tax which places tax burdens on businesses with more than Rs. 20 Lakhs in turnover. Note that the requirement is Rs. 10 Lakhs in some states. In simple terms, businesses and individuals with annual turnover in excess of Rs. 20 Lakhs are captured under the GST tax regime. Upon registration, you will be provided a unique 15-digit GST Identification Number. Of the numerous benefits of registering for GST, being a legally registered and recognized supplier stands out. In order for you to have a seamless GST registration process, we have put together a step by step guide to help you register online.
Quite a number of businesses are captured by the GST regime, the following businesses, individual and entities are expected to register for GST online;
As part of the online registration process, you are expected to upload the following documents;
Failure to registered for GST will be treated as a tax offence and the tax offender will pay 10% of the tax amount subject to Rs. 10,000. When it is a clear case of tax evasion, the offender will have to pay 100% of the tax amount. There’s also a penalty attached for delay in registering for GST. Offenders will pay Rs. 200 daily for the period delayed but the maximum will be Rs. 5000. In all, there are 21 offences under GST, all of which have attached penalties.
GST exemptions are applicable for 3 cases – GST exemption on goods, the exemption granted on services, GST exemption granted to individuals/businesses.
GST exemption for businesses/individuals is granted if they have less than the specific amount on their annual aggregate turnover. The GST exemption limit for the supply of goods for businesses has been increased to Rs.40 Lakhs, and for the hilly and northeastern states, the exemption limit for the supply of goods is Rs.20 lakhs. For business, the supply of services the GST exemption is Rs.20 Lakhs for all other states exempt hilly and northeastern states. Whereas for hilly and northeastern state remains Rs.10 Lakhs
Here follows the aggregate turnover of business exemption during calculation.
• If investors pay any of CGST SGST or IGST.
• Goods and services inward supply values.
• Reverse charge mechanism based on tax payable.
• Person making non-taxable goods/services supply.
The GST exemption for goods will change periodically. The rules of GST exemption for goods will vary depending on the goods whether it is GST exempt, zero-rated, considered as a non-GST supply, or nil rated. In most cases, process readymade apparel goods silk made are taxable and unprocessed goods are GST exempt such as raw silk.
Here follows GST exemption for services
If the person makes Non-Taxable/ Non-GST supplies, then comes under GST exemption. Eg: Petrol, Natural gas, diesel, electricity and so on.
If the person makes business with the common items such as unprocessed food (Eg: milk, rice, wheat, etc.,) education, healthcare excluding medicines, hotel or lodges with a charge of less than Rs.1000, traveling in train for both sleeper and local, Bangles/bindis/similar products, coloring/drawing books, all will be the exemption GST services list
Only small business people are eligible for small business GST concession. The following are the GST concession for small business entities,
• Cash basis GST accounting
• Instalment GST Payments
• Shared annual income tax
Truly, GST has changed in a big way how business is done in India. The GST tax reform was implemented with the primary intent to collapsing previous tax regimes into a single structure. Initially, the new tax structure left most confused mostly due to lack of knowledge as to how the new tax regime will function and help businesses. Nonetheless, more than ever before GST has made business analytics and taxation easier. It’s void of the complicated forms of taxation that businesses and individuals are subjected to. One interesting part of the GST is the Input Tax Credit which businesses are currently excited about. By registering for GST, you can also reduce your tax expenses by claiming input tax credit from the government. The beauty of Input Tax Credit lies in the easy process.
For every purchase you make for your business, upon which you pay GST, you are entitled to Input Tax Credit. With the credit, you are bound to pay lower tax to the government. Let’s create an analogy of how the GST works;
Anyone registered for GST is entitled to claim the Input Tax Credits, Even if your business doesn’t have the threshold of Rs 10 Lakhs in turnover, you can still registed for the GST and claim input tax.
In order to claim the Input Tax Credit, you have to file for the GSTR2 and GSTR3 Returns. For the GSTR2, you will input a record of all the business expenses upon which you have paid GST. This would have been automatically filled based on the information your suppliers who are also on the GST have provided to the government. Whenever you sign in to the GST Portal, you should have access to this records. Look over these records to ensure they are correctly filed. If there are adjustments to be made, make it and remit the form. For the GSTR3, this can be done after few days that you have remitted the GSTR2. The information on the GSTR3 is populated using information from the GSTR1 and GSTR2. While the GSTR1 has all the sales you’ve made and GST collected, the GSTR2 contains business purchases upon which you are eligible for Input Tax Credits. The GSTR3 puts it all together and shows your liabilities which is the total GST to be paid. Simply put, the formula is GSTR1 (Collected) Minus GSTR2 (Paid) to arrive at the GSTR3.
This is where things become complicated. You may not be able to claim input tax credits on all purchases even if they are made for your business. For the following, you cannot claim input tax credits;
In as much as you have the goods in your hands or they have been paid for, you can file for Input Tax Credit. So also, your supplier must have paid for the GST collected from you before you are eligible to file for the tax credit. This means that you may need to exercise some patience before filing for input tax credits. This is to allow for proper payment and filing of the records.
At this point, the Goods and Services Tax should not be a news to you anymore. Being the biggest tax reform ever in India and It was implemented in India on 1st July 2017, thereby replacing 18 indirect taxes. Upon implementation, there came different confusion which is expected of such a huge tax reform. However, in order to douse the tension and solve the problem of tax payers, scores of GST mobile apps were launched both on Android and iOS platforms. These apps were touted to be able to make tax payment on the new tax regime easier, simpler and faster. Importantly, these apps also intends to provide information to businesses and individuals on the new tax structure. We’ve carefully selected the best GST mobile apps that could simplify and cut out the stress involved in GST payments;
At the upper most of our list is the MyBooks app. Millions of Indians including businesses fell in love with MyBooks majorly to the GST features. MyBooks as one of the best GST mobile apps have helps thousands of businesses avoid every form of errors in filing their GST. Unlike every other GST apps out there, MyBooks is equipped with GST features that enables automatic self-billed invoice, creating invoices with the tax amount, full attention to interstate and intrastate tax payment and many other features. That’s not all, MyBooks is also simple to use and flexible with an unrivalled performance.
Another darling of individuals and businesses is the Vyapar GST mobile app. Many of it’s users will agree it’s not a mistake that it’s one of the best GST apps. Vyapar as a GST app is made completely ready for use for any individual and business. Being GST compatible, creating and sharing invoices is in compliant with GST structure. More importantly, financial reports can be precisely generated while taxes are automatically generated. This is in addition to swift filing of GST tax returns. All of these added to the short learning curve of using Vyapar, and without a need for prior accounting knowledge.
Another GST app that deserves a place on our list is Zoho Books. There’s a lot you can get done using Zoho Books but the GST compliant features stand out. If all that matters to you is getting it right with your GST issues, it matters to Zoho Books also. This is why they have made it easy for you to manage every of your business accounting needs right from your mobile. Imagine being able to stay on top of your invoicing, tax filing and accounting books from your fingertips. While there are many things Zoho can do for Indian businesses, recording e-Way bills, auto-populating GST transactions and helping to document tax records seems to be the most notable.
It doesn’t matter if you are on the move or in the corner of your office in New Delhi, Quickbooks gives you the state of your accounting and tax books from anywhere. All you’ll need is a mobile phone and you’ll have it. While there’s a regular Quickbooks app, Intuit intentionally created a GST compliant version just for Indian businesses. Even though it has basically all the features of other GST mobile apps, the international appeal that Quickbooks possess makes it easy to break into the Indian market. For Indian businesses already using the Quickbooks apps before GST implementation, transitioning to the GST compliant version was seamless and without extra charges.
Touted as a GST ready mobile accounting app, BookeeparApp is domiciled on Android, iOS, and Windows operating system. If you are already using the BookeeparApp on PC, adapting and migrating to the mobile app will come easy. With BookeeparApp, you can create customizable invoices, bills and fix your other accounting needs like never before. If you are interested in hard copies of accounting statements, BookeeparApp allows you to print in any format that suit your needs. The BookeeparApp team provides you with free update, support, syncing and license transfer.
The panic created by the July 1st 2017 implementation of the Goods and Services Tax (GST) regime is long gone. Individuals and business owners have moved to the era of looking for resources and tools to better adapt to the new tax regime. One of such search is for the best GST accounting software. A GST software that can help in invoicing, billing, filing and distribution in line with the new structure. Topping the search criteria for the best GST accounting software is the ease of use, the cost of deployment, bank integration, putting together other accounting books and as a matter of importance, generation of GST invoices. To help you, we have put together 5 of the best GST accounting software that could help you and your business;
If you have ever used the myBooks accounting software, you’ll agree that it’s in a class of its own as far as bookkeeping is concerned. Thinks of it as am efficient accounting software. The edge myBooks have over others is that it is built and targeted for the Indian economy. Equipped with all the bells and whistles that will make every Indian business stand out completely in addition to being 100% GST compliant. Imagine being able to send a GST compliant invoice via email in just a few clicks along with your customized logo. Don’t forget, you are also able to file from your GSTR1 to GSTR9 using myBooks.
Quite a popular one among Indian businesses. Tally has been around for over two decades, long before GST was even conceived and implemented. It is established itself as a leader in providing Indian businesses with tools and resources to stay profitable. Upon implementation of the GST tax regime, it joined the race for providing businesses with a GST accounting software that can be relied upon. So far, it has not failed to deliver on it promises of handling the most difficult accounting processes and routine. The only shortcoming of this GST app is the difficulty of usage for a non-accountants. So also, the software is only accessible via PC.
What stands as the weakness of Tally ERP is the strength of the Marg GST accounting software. Another strength of this software is the low cost of deployment which makes it a choice among small and medium enterprises which it actually targets. Using Marg GST, creating invoices, purchase orders, sales receipt, and bills is easy and even customizable. There’s even room for maintaining personal directories. There’s also features for interest calculation, scheduling for creditors and debtors, and many others. Unlike other GST accounting software, Marg GST does not allow for remote access, if offers no cloud based accounting offered by myBooks.
This should not come as a surprise, Quickbooks is popular everywhere not just in India. Long before GST was implemented, Indian businesses and individuals have trusted Quickbooks for their automated accounting needs. Despite being a US based accounting software, it has fully adapted itself to the needs of Indian businesses. Which was why it launched a GST complaint version for the Indian market. Of course, there’s plenty of GST inclined features including creating of invoices and bills. Using Quickbooks, you can easily monitor Input Tax Credit in order to save tax expenses. There’s also a 30 days free trial period for businesses.
Competing with Quickbooks in terms of incentives with its 14 days free trial period, Zoho Books also has a place in the heart of India entrepreneurs. Majorly, Zoho Books is equipped to send GST compliant invoices, tracking of inventory, generating reports and help in reconciling bank statements. One important feature of the GST software is being able to file GST returns with a few clicks. It will cost you less than Rs. 2500 to enjoy all of these and many other benefits of Zoho Books as an organization. Zoho Books isn’t limited to being a web-based GST app, it can also be deployed on Android, iOS and Windows app.
An e-way bill is an electronically generated document or invoice required for the transportation of goods. E-way bill is short for electronic waybill. Under the e-way billing system, businesses in India are required to file when moving their goods. These goods must be worth more than Rs. 50, 000 and movement may be interstate or intrastate. The implementation of this system is to capture the movement of goods in India. The government believes that this would act as a deterrent against the evasion of taxes.The Indian government introduced this e-way billing system in April 2018. The e-way billing system is under the goods and services tax GST. Its primary aim is to ensure transparency in taxation and hassle-free movement of goods. The e-Way bill replaces the Way Bill which is a physical document for the movement of good during the VAT regime. With the current mechanism, transporters do not need separate transit passes for movement across state borders. This is due to the fact that the e-way bill is valid throughout the country.
Every interstate movement of goods worth more than Rs. 50,000 in a motorized conveyance must be taxed. Goods to be transported through a non-motor vehicle are exempted from the system. However, certain goods are mandated to be taxed regardless of their value. An inter-state transport of handicraft goods by dealers exempted from GST must be taxed. Also, the movement of goods to the worker by the registered worker will be tasked.
It is quite easy to generate an e-way bill via SMS or the online e-way bill system. This bill must be generated before the goods are moved. You need to be registered on the EWB portal and the invoice of the goods must be available. If transport is by road, vehicle number or transport ID must be known. For rail, air or sea transport, transport ID, documents number and date are required. The online method is a step-by-step easy method. You log in using your details and then click on generate new option. Thereafter, you will be required to fill in information related to the goods and their transportation. You can then submit and print out the e-way bill you generated.The validity of an e-way bill depends on the distance of transportation. If the distance is less than 100km, validity is a day from the bill’s generation. For every additional 100km, an additional validity of 2 days is offered. You can cancel an e-way bill within 24 hours of its generation if transit has not been verified.