Goods and Services Tax, commonly known as GST came into on 01st July, 2017. However, being a new law, there are various confusions being spread as rumour which makes this law unclear to the common man. Below are the major facts and myths related to goods and services tax:
common Myths and Facts about GST
MYTH 1: My business is compulsorily required to have GST Registration and I cannot start my business without the same.
FACT 1: A dealer is required to apply for registration within 30 days when he becomes liable for GST registration. Once he has applied for registration, a provisional GSTIN will be issued and there is no need to wait for final GSTIN number. Therefore, you can very well start your business with provisional GSTIN.
MYTH 2: Once registered for GST, I will have to file three returns.
FACT 2: Once registered for goods and services tax, you will have to file only one return, which has three parts.
– First part is details of all outward supplies (sales) made in previous month.
– Second part is an auto generated return consisting of details of all inward supplies (purchases) made in previous month
– Third part is assessment
MYTH 3: Details of every invoice is required to be uploaded on GST Portal.
FACT 3: If a dealer is doing only retail business, then there is no requirement to upload invoices on goods and services tax Portal. The invoices are needed to be uploaded only in the cases of B2B transaction i.e. where a business sold goods to another business. If a dealer is only selling goods to final consumers, then there is no such requirement of uploading invoices on GST Portal.
MYTH 4: Employee reimbursements are subject to GST.
FACT 4: The reimbursements to employees towards official expenses should not be subject to goods and services tax as the employee has rendered those services in the course of his employment. However, reimbursements to employees that represent purchases from unregistered dealers will be subjected to GST.
MYTH 5: Every dealer is required to generate through computers.
FACT 5: From October 1, 2020, e-Invoicing is mandatory for certain taxpayers whose aggregate turnover during the FY 2019-20 is more than Rs. 500 crore. By January 1, 2021, it will be available to taxpayers with an annual turnover over Rs. 100 crore. For such class of taxpayers, generating e-invoice becomes mandatory for every invoice, debit note and credit note issued by them. However, there are some exceptions to it.
MYTH 6: Unregistered dealer cannot purchase goods from the dealers of other states
FACT 6: There is no restriction in goods and services tax law to restrict inter-state purchases for unregistered dealers. But a dealer cannot do inter-state sale until he has obtained GSTIN by registering under goods and services tax.
MYTH 7: Small businesses will not be able to survive because of GST compliances, as they require internet more often.
FACT 7: The GST returns can be filed online or offline. Therefore, the businesses have an option of not adding the cost charges of internet for filing returns as well as for other compliances.
MYTH 8: GST rates are high and it has resulted in increase in prices of the commodities.
FACT 8: GST rates have been classified into 6 parts : 0.25%, 3%, 5%,12%, 18% and 28%. The GST has subsumed all the indirect taxes. Under the old regime, only VAT charges were visible to consumers and excise duty was not shown. Goods and services tax has only made the charging mechanism transparent and not expensive.
MYTH 9: GST to be levied even if customer sells old jewelery to jeweler.
FACT 9: Government has clarified that GST will not be payable, if a consumer sells his old jewelery to a jeweler. However, if an unregistered jeweler sells old jewelery to a registered jeweler, then GST will be paid under reverse charge mechanism.
MYTH 10: I have to pay tax twice if the transaction is done by credit card.
FACT 10: This has been the biggest myth ever around goods and services tax. You have to pay tax only once under goods and services tax irrespective of the fact whether the payment is made through cash or cards.
If you have any opinions or feedback related to this new tax reform : GST or Goods & Services Tax then do share it in the comment section below.
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