The Goods and Services Tax (GST) was introduced in India on July 1, 2017, yet there are still many myths circulating since the proposed legislation is not well understood by the general public. It’s only reasonable to witness a wide range of emotions. The basic reason is that individuals oppose change since it is difficult to adjust to new situations.
Tax Laws before the Implementation of GST
- Previously, the Centre and their state collected taxes independently. The tax procedures varied depending on the situation.
- Though, though import taxes were levied on a single individual, the problem was levied on another individual. Within the cases of direct tax, the taxpayer must pay the tax.
- Earlier to the intro of GST, immediate and indirect fees were present in India.
Functions of GST
The GST Network’s or GSTN’s key functions may be summarised as follows:
- It is in charge of paying the bills.
- It is in responsibility of the registration process.
- It is in dealing with debts and reimbursements
- That is in responsible of dealing with various types of income.
GST MYTHS BUSTED!
Myth1: The dealer cannot work without getting the final GSTIN.
Reality: If a dealer becomes responsible for registration, he must require registration within 30 days. As soon as he has requested registration, an eventual GSTIN will be given and there is no need to wait for the last GSTIN number. The Seller can start a company with provisional GSTIN as well.
Myth2: If you pay with a credit card, you’ll have to pay taxes twice.
Reality: It was the biggest GST myth until Financial Services Director Hasmukh Adhia came out and said it was entirely wrong on Twitter. Under GST, you just have to pay income tax once, regardless of whether you pay with cash or a credit card.
Myth3: The GST rates are high, and this will result in a rise in commodity prices. You can also activate a suspended GST number.
Reality: The higher GST rates of 18% and 28% lead to the conclusion that GST prices are high. However, this is simply not the truth as previously excise duty had not been obvious to customers. Only VAT was shown in their invoices. But, following the GST regime is complete indirect taxes is visible.
Myth4: Each dealer is required to generate bills digitally through computer systems.
Reality: The federal government has not made any rule to create digital invoices. The dealer can make invoices manually. The particular only requirement is the fact that the Government has approved a few details like HSN Computer code, Place of Provide, and so on which must be written on the invoice. Dealers can issue invoices personally also.
Myth5: You need to make three results per month
Reality: Another common misconception about GST is that you have to fill up the returns 3 times. Instead, it is merely one return that must be paid in three various components. The first element is filed by the dealer, while the next two aspects are auto-populated by the computer.
Myth6: Unregistered sellers cannot purchase goods from dealers of more states.
Reality: Right now there is no limitation in GST regulation to restrict inter-state purchases for non-listed dealers. A dealer, on the other hand, cannot make interstate sales unless he or she has received a GSTIN by registering for GST.
Myth7: Details of every invoice are required to be uploaded on GST Portal.
Reality: There is no need to upload invoices to the GST Portal if a dealer is only running a retail store. Just invoices must be published in case of B2B transaction i. e. where a business sales to another business. If a seller is just selling goods to final consumers, there is absolutely no such necessity of uploading bills on the GST Portal.
Myth8: After only tax payments on the full shares on June 30th can Composition Structure be chosen.
Reality: If an existing dealer is having old stock lying down in the property on June thirtieth and now he or she wants to choose a composition scheme under GST, it is not necessary to pay GST on the stock.
Myth9: GST to be levied set way up customer sells old jewelry to a jeweler.
Reality: The US government has said that if a customer gives his old jewellery to a jeweller, no GST would be charged. GST would be paid via reverse charge only if an unlicensed jeweller sells old jewellery to a registered jeweller.
Myth10: Employee reimbursements will be subject to GST.
Reality: GST will not be levied on repayments to employees, Federal has clarified that GST will not be levied on reimbursements given to employees. However, gift items exceeding Rs. 50000 in a given time given to employees will be subject to GST.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.