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Tag: GST

  • India on the Rise: Achieving a $5 Trillion Economy

    After 75 years of independence from the British Raj, India has emerged as the fastest-growing and fifth-largest economy in the world. By the year 2020-2021, India’s per capita income has increased to INR 1.28 lakh. By August 2022, the country’s Foreign Exchange Reserves amounted to USD 572.97 billion and its GDP (Gross Domestic Product) rose to USD 3.5 trillion. India aspires to reach a USD 5 trillion economy by the year 2024-2025.

    Economic History
    Current Economic Status
    Way To USD 5 Trillion Economy
    Challenges & Obstacles
    Conclusion

    Economic History

    At the end of the 1st millennium BC, India was one of the largest economies around the globe which ended around the beginning of British rule. Under British rule, India experienced decentralization as well as the cessation of various craft industries. This coupled with accelerated economic and population growth in the west led to a steep decline in India’s share and by independence, the country’s GDP had been reduced to a mere 4.2%. India’s global industrial output also reduced from a towering 25% in the 1700s to a mere 2% in just a little over 200 years. The British left India in dire straits, dealing with a collapsing economy, poverty, high inflation, and an utter state of confusion.

    Post-independence, India adopted five-year plans concentrating on centralized economic and social growth programs. The first five-year plan focused on agriculture and irrigation and aimed to boost farm output and the second, launched in 1956 advocated rapid industrialization with a focus on heavy industries and capital goods. However, this caused the funds to be taken away from the agricultural sector leading to food shortages and inflation. In the 1960s Indian economy was worsened by the wars with China and Pakistan and the political instability within the country. This led to the devaluation of the Indian Rupee. Then, a little over two decades later came the oil crisis in 1991 resulting in a balance-of-payment crisis for the country. The global economic crisis of 2008 left the Indian economy deeply scathed and the country’s fiscal deficit rose to 6.4% of its GDP in 2009-2010.

    However, two economic events that have assured a place in history were the demonetization of 2016 and the implementation of the Goods & Services Tax (GST) in 2017. Demonetization was aimed at flushing out black money and striking out corruption and the introduction of GST introduced a uniform tax rate across all states paving the way for easier compliance.

    Current Economic Status

    Since the beginning of the 21st century, India’s annual average GDP growth has been around 6% to 7%. Between the years 2013 and 2018, India surpassed China and became the world’s fastest-growing economy. The country is the third largest unicorn base globally, being home to 100 unicorns that are collectively worth USD 335 billion. The country is also the third largest by PPP (Purchasing Power Parity) with an estimated USD 11.75 trillion.

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    Way To USD 5 Trillion Economy

    The country currently has strong economic fundamentals and is well on the road to becoming a USD 5 trillion economy. Various factors are working in favor of the country. These factors are –

    Diversified Economy

    India enjoys strong trade relations with many other countries. Its economy is well-diversified with healthy roots.

    New Technology Adoption

    In the past few years, India has quickly adopted newer technologies, especially in the manufacturing and financial sectors. This has led to higher quality and reduced production costs driving profitability. It has also led to increased investment in innovation.

    India's Gross Domestic Production
    India’s Gross Domestic Production 

    Increasing Off-Shore Opportunities

    As devastating as the effects of the covid-19 pandemic were, it has favored India, as the working culture shifted to remote teams. This led to developed nations finding it more cost-effective to work with people living in India.

    Young Average Age Population

    India’s youth population is the largest globally at approximately 356 million. This represents a high 64% working population that contributes to the country’s growth in GDP and per capita income.  It also presents a high consumer base for companies to thrive and grow.

    Shift to Renewable Energy

    India’s dependency on energy imports has lessened considerably with almost 40% of the country’s installed electricity capacity coming from non-fossil fuel sources. This has reduced operational costs for businesses and individuals.

    How India Will Take Over the World Economy In 10 Years

    Challenges & Obstacles

    India’s fast growth has persisted even in the face of the globally crippling pandemic coronavirus. The country, however, is facing several challenges on the path to becoming a USD 5 trillion economy.

    Supply Chain Bottlenecks

    Developed economies resorted to distributing cash to households to combat the debilitating effects of the pandemic. The supply-chain bottlenecks resulting from the pandemic have also not eased. These have led to soaring inflation across the world, which is exacerbated by the ongoing Russia-Ukraine war.

    Interest Rate Increase by the Federal Reserve

    The Federal Reserve has increased the interest rates to combat rising inflation. However, these threaten economic growth and may cause ripple effects within India.

    Strengthening Dollar to Indian Rupee

    The US Dollar is consistently strengthening against the Indian Rupee adding to inflation and can have a negative impact as India purchases oil and other imports in this currency.

    EU Energy Crisis

    The ongoing war between Russia and Ukraine has led to a severe energy crisis in the European Union. This acts as a growth inhibitor.

    China’s Covid Policy

    At one time, leading the global economic growth, China has continued to announce restrictions due to its zero-covid policy making international trade difficult.

    Conclusion

    India’s growth is unprecedented and its march is strong and sure. However, challenges like generating employment, curbing inflation, increasing foreign direct investment into the country, and maintaining macroeconomic stability must be successfully dealt with to make a USD 5 trillion economy a reality.

    FAQs

    How does the Indian economy compare to other economies in the world?

    India is the world’s fifth-largest economy by nominal GDP and the third-largest by PPP(Purchasing Power Parity).

    What are the key policies and initiatives taken by the Indian government to boost economic growth?

    The Indian government has implemented policies such as Make in India, Atmanirbhar Bharat, Digital India, Start-up India, GST, FDI liberalization, Pradhan Mantri Jan Dhan Yojana, and Swachh Bharat Abhiyan to boost economic growth and development.

    What is the role of foreign investment in India’s economic development?

    Foreign investment has significantly contributed to India’s economic growth by providing capital and technology, improving productivity, and creating jobs. The Indian government has implemented policies to attract foreign investment, which has increased exports and skills in various sectors.

    What are the main sectors driving economic growth in India?

    The main sectors driving economic growth in India are services, agriculture, and manufacturing.

  • How to Generate an Invoice – A Guide for Small Businesses

    Generating an invoice doesn’t seem like an exciting idea for branding, possessing a well-designed, professional one can stand out in the eyes of your clients and help businesses get compensated on time.

    Clients want to be sure everything works with a reliable organization before sending any money. As a result, your invoices must be completely accurate, have a recognizable logo, and clearly outline a selection of excellent travel services.

    Regardless of whether you operate for yourself or a company, billing is a crucial component of any organization. You must understand and be able to use invoices if you would like to be paid. So, let’s start with the basics.

    What is an Invoice?
    What Makes Them Significant?
    How Does One Get Their Invoice Made?
    Methods of Delivering an Invoice to the Client
    Things to Give More Considerations Related to Invoices
    Are Invoices Enforceable in Court?

    What is an Invoice?

    An example- The typical invoice should be something like this.
    An example- The typical invoice should be something like this.

    Two entities purchaser and a seller—are involved in a typical business deal. The vendor wants to be paid for the products or services they have provided to the customer.

    This is a business deal. So, this is the main idea. The seller is therefore owed money by the purchaser, and how much precisely? And for what exactly are they making the payment? Or how much time will they have to spend? The vendor gives the buyer an invoice containing all of this data to address all of their inquiries.

    The purchaser is aware of their obligations, has a checklist of all the products and services they are spending for, and is aware of the conditions of the deal. They’re satisfied. As a result, the provider receives the payment, and the deal is done.

    The terms “bill” and “invoice” are synonymous. They’ve to do with the paperwork that the vendor sends to the customer to demand compensation for the goods and services that were rendered.

    The above graph shows the difference between the invoice processing cost by automating the invoice generation process.
    The above graph shows the difference between the invoice processing cost by automating the invoice generation process.

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    What Makes Them Significant?

    Sellers desire payment. Therefore, it is crucial to them that bills are issued as quickly as possible to prevent having to wait for the money. Bills are also crucial to the government. On purchases of taxable supplies, the majority of countries impose some kind of sales tax. Goods and Service Tax (GST), state or local taxes, etc.

    Some of these may be familiar to you. A sales tax split-out and identification are both included on an invoice, which is a document of the transaction. For deals with licensed enterprises, they are thus actually mandated by law.

    They’re significant from an accounting standpoint since they are what started the account balances in the accounts of both the purchaser and the vendor. Additionally, they are utilized to monitor accounts payable and receivable.

    How Does One Get Their Invoice Made?

    A cloud-based accounting tool providing platform QuickBooks
    A cloud-based accounting tool providing platform QuickBooks

    There are numerous approaches to creating invoices. You can create an invoice easily using the built-in layout in Google Sheets, but use cloud-based accounting tools like QuickBooks online or FreshBooks if the company would like to be more structured and be able to monitor transactions and generate reports.

    You must at least incorporate the following to make a decent invoice:

    Documents Title

    The document’s title is an invoice. Giving a title to your document is the most important thing as this would help you locate it as and when needed. It also gives the client a brief idea of what the data provided represents.

    Company Details

    The name of your company and your contact details. Contact details such as email, phone number, and much more so that your client can contact easily in case any problem arises.

    Invoice Specifications

    The date and distinct invoice number. Putting a date and invoice number on your invoice makes things easy for you as well as your client. It makes that particular invoice unique from other invoices.  

    Product Specifications

    Information on the goods or services offered and the amount due on them. A description of the products or services being offered to the clients in the form of a table helps your company keep a track of the stock and proof that goods were supplied to the client. It would help avoid queries raised by customers. Folks hate to call up again and again for queries and this puts your brand in a bad position by displaying poor customer service.  

    Clients Details

    The client’s name and contact details. Your client or company’s name, their address, and much more. If you have any concerns regarding the delivery of your product or the payment to be received from the client or want to get customer feedback having the contact details of the client makes your job much easier.  

    Discount or Coupons Specification

    Quoting a fair price on the goods or services provided is a hectic task for companies. You don’t want your company to be in a situation wherein you charge way more or way less than the actual value of your product or service. This might create a bad impression on your part and future sales could get affected by this significant element. Mention any coupons or discounts available at that time. This would be one of the factors in retaining your customers.  

    Amount Clarification

    The complete subtotal. The total amount to be paid is covered here. This should be in words as well. If you do any errors by writing your amount in numbers then you’ll have something to back you up and also people usually confirm both. Don’t forget to add currency because if you are working with international clients this could be a huge problem.

    Bank Details

    Add Bank details. Ask your client beforehand about the payment options as this would help you process the payment easily. You could mention your UPI ID for payments in India and if you’ve international clients then you can put your PayPal details there.

    Duration Limit

    A timeframe, if applicable. You need to add a deadline or a due date which states the date at which the payment should be processed.

    Methods of Delivering an Invoice to the Client

    You have a few alternatives for how to deliver your invoice to the clients. The invoice can be sent by postal mail or digitally via email or a site.

    You can send an online invoice by mail or straight from your bookkeeping or billing system. Due to the ability to send invoices to customers directly, this is a favored selling approach for many organizations. Online payments are frequently made for electronically sent bills. Email is a less typical method of payment.

    Keep in mind how long it takes for your bill to reach when sent via postal mail. In general, this option is more time-consuming than the other one. To satisfy the requirements of the targeted audiences, many firms continue to mail bills.

    There are many things that require special attention to minute details in the generation of the invoice. Invoices are not just a crucial part of each business but sometimes they do form an integral part of the legal procedures. some of the most common doubts related to Invoices are shared below.

    When should you send out invoices?

    According to the terms of the contractual relationship, invoices are typically sent out after the order fulfillment, but this is not always the case. In each case, though, the accounting treatment is varied.

    Are sales receipts and invoices interchangeable terms?

    No, in a nutshell. Nevertheless, there are some parallels, which make this perplexing. Both act as transactional proof. Both are created by the vendor and sent to the client. The essential distinction is that invoices are a call for money, hence it is given before the payment is done, but receipts are given after.

    Are a supplier or purchase invoice and a sales invoice interchangeable?

    In reality, they are interchangeable. Both are invoices. Depending on your viewpoint, they could have different names. You might refer to it as a sales invoice if you’re the seller. Also known as a vendor or purchaser invoice if you’re the purchaser.

    Are Invoices Enforceable in Court?

    They are not, generally speaking. An invoice alone has no legal significance. What might prevent you from sending bills to anybody you want and earning all the income if they were?

    The terms must be agreed upon by both the contracting parties for them to be enforceable. It is crucial that both parties have documentation of the deal, preferably in the form of a signed document but at the very least an email. You wouldn’t want to be the one who finds themselves in a scenario where the prospective customer won’t pay. That isn’t very pleasant, after all.

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    Conclusion

    Remembering to send invoices is, by far, the most crucial aspect of doing so. Although it may seem absurd, individuals frequently forget. Choose a convenient time each week to handle your billing. That could be the closing of the day or the weekend.

    Allocate that period, and then carry on. If creating an invoice is quick and easy, you won’t be as inclined to set it off. Use a smartphone app to create invoices while on the go. I hope you found this article an interesting read.

    FAQs

    Is there an invoice template in the word?

    Yes, there are multiple invoice templates made available in the word that one can take help from.

    Can we hand write the invoice?

    Invoices can be handwritten also, but it is not the best option to select from. Handwritten invoices carry a lot of risks with them.

    What is an Invoice?

    An invoice is basically a document that proves the exchange between a buyer and seller along with basic details such as time, date, items, etc.

    What are the types of invoices?

    There are many types of invoices available in the business, some of them are standard invoices, credit invoices, commercial invoices, mixed invoices, timesheet invoices, etc.

  • 10 Modest Tax Proposals to Consider for the Next Budget [Funny Take]

    Article to be attributed to Mr. Sanjay Dangi, Director – Authum Investment and Infrastructure Ltd., & Financial investor to many startups.

    Lately I have been reading about Pigovian taxes – the idea that carefully designed taxes can have an impact on people’s behavior. These are often sin taxes – pricing bad behavior (like smoking or gambling) out of the market making the overall social cost very high. Thinking about it, I make 10 tax proposals for next year’s budget here. I know that it’s a far-off thing and you are still recovering from the breathless media coverage of the budget presented in February. But a budget takes a lot of planning, and I want to get my ideas in early.

    1. A 10% Pakora Tax
    2. Doubling GST on Loudspeakers
    3. A 30% Stunt Bike Tax
    4. A 10% Suit and Tie Tax
    5. A 20% Congestion Taxes
    6. A 100% Great Indian Wedding Tax
    7. A 20% Glass Building Tax
    8. A 100% Fairness Cream Tax
    9. A 28% Dog-walking Tax
    10. A 15% Adjournment Tax

    A 10% Pakora Tax

    Fat and sugar taxes aim to make a society healthier by taxing fatty and sugary foods extra. They have been tried in many countries with various levels of success. In India, Kerala has been the first (and so far, only) state to introduce such a tax, at 14.5%. With some studies showing obesity and diabetes rising in India, it is time to introduce this tax countrywide. Weaning people off excessive fried foods will not only reduce medical bills, but also save foreign exchange on imported palm oil (prices of which have skyrocketed this year). Ditto for sugary drinks and festival sweets.

    Doubling GST on Loudspeakers

    Recently there has been a lot of noise pollution about the noise pollution caused by loudspeakers. But we Indians love our noise – from deafening DJs at weddings to raucous processions. Banning loudspeakers will only put additional burdens on the overworked police. I instead propose that the 28% GST and 40.8% customs duty on loudspeakers be doubled – or even raised to 100%. The extra money can be used to hire more police, making our streets safer.

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    A 30% Stunt Bike Tax

    3 AM on our roads attracts a certain class of idiot – who either on his baap ka paisa or on udhar, buys a premium bike for racing and doing stunts. Somehow, they think that waking everybody up will impress girls. A Hayabusa will cost them more than a kidney, while a perfectly useful bike like a CD100 is beneath their contempt. A 30% tax will probably not deter them, but might pay for the government to install sound barriers on major roads.

    A 10% Suit and Tie Tax

    In 2009, Bangladesh banned suits and ties. They are ridiculously unsuitable for tropical weather like ours. People who wear them have to keep the AC on all day, and pour liters of deodorant on themselves. Both increase our petroleum import bill. To make matters worse, most of these are ill-fitted to our paunches as well. A 10% tax will curb the wearing of these suits, and offices can spend less on electricity. Those who do pay the tax will contribute to paying our oil import bills.

    A 20% Congestion Taxes

    American cities have been built around the car – with wide roads and ample parking. European and Asian cities, many of which are centuries old, were built around pedestrians with narrow streets and congested buildings. With greater prosperity, Indians have filled their cities with cars, so even the smallest towns today have traffic jams.

    Many European cities have imposed congestion taxes and generally succeeded in freeing up the roads. We need to reclaim our cities for our communities and make travel easier for all. Congestion taxes also help pay for public transport – which we need a lot more of.

    A 100% Great Indian Wedding Tax

    Mehndi, sangeet, phere, reception, bidaai and countless other wedding-related functions keep our people away from workplaces for several days at a time. They also cause families to ratchet up huge expenses, often going into debt. This is simply because of peer pressure and keeping up with the Joneses.

    I propose a 100% tax on weddings that exceed INR 1 lakh in expenses. Those who can’t afford them will have simpler weddings which are good for us all. Those who can pay for them will enrich public coffers. Many states have schemes to help poor women get married, and these taxes can help fund those schemes.

    A 20% Glass Building Tax

    Studies have shown that buildings with glass facades increase local heat and are contributing to climate change. The sun’s heat is reflected off the glass, so the building itself is not heated. But on a street full of buildings like these, the heat is trapped on the street, making a summer day unnecessarily hotter. These buildings also need to be air-conditioned because of the lack of ventilation, which causes a huge increase in their carbon footprint. Lastly – and this is my subjective opinion – these buildings are ugly.

    A tax proportionate to their carbon footprint will make sure that the government has money to pay for offset measures. It can also help fund architectural research into alternatives that are more aesthetic and sustainable.

    A 100% Fairness Cream Tax

    I would daresay this is self-explanatory. Our daughters should not be hurting themselves because boys have been taught to expect gori-chitti brides.

    A 28% Dog-walking Tax

    More than dogs today, dog-walkers have become a status symbol. What productive employment this gives to young men and women, I have no idea. I propose that dog-walking be brought under GST at 28%, in the hope that it will make people walk their dogs themselves and thus get some exercise.

    A 15% Adjournment Tax

    Tareekh pe tareekh is how most people will describe our justice system. Here’s a small idea that may help to reduce the 44 million pending cases in India. Every time a lawyer asks for an adjournment, they must pay a tax on their fees, that they cannot pass on to their clients. Judges may waive the tax if they feel the adjournment requested is legitimate. This might incentivize both bar and bench to wrap up cases quickly – and help pay for hiring more judges in our understaffed courts.

    Conclusion

    Will taxation solve all the above problems? Not by itself. Daru-cigarette taxes have been around for decades – and work only partially. Governments have learned through multiple experiments that outright prohibition only cause people to buy tobacco and alcohol illegally – often causing ‘hooch tragedies’. However, such ‘bad behavior’ taxes are a more democratic way of bringing social change in a country that bans things at the drop of a hat, or enacts draconian laws that often backfire. Taxes preserve people’s ability to choose – even if it is bad for them. They make things look bad, but don’t criminalize the people who do these things. True social changes need public awareness and participation – and such taxes can help fund these campaigns.

    There’s another benefit – both state and union governments can wean themselves off fuel taxes and give some relief to the common man. This is at a time when oil is taking a keen interest in USD 200 per barrel, and the public is looking for some relief from inflation.

    Looking forward to budget 2023.

  • What is Vehicle Scrappage Policy | How Startups will Benefit from Vehicle scrappage policy

    We all have had our own share of episodes of looking at rusty, old, vehicles covered in black, dense smoke bumbling past us, and we remarking, “how did it get past the usual security checks and roam about freely?”

    Well, this is how things used to be on the Indian roads where we could name a brand new Mercedes or a BMW and a polluting, dilapidated truck or van in the same breath.

    Out of the total air pollution that the Indians suffer from, a massive 27% of it is caused by vehicular emissions. Though a number of companies including Ola, Reliance, Tata, and others have started stressing about eco-friendly ways and have embraced Green Marketing to change the way how the industries and the vehicles run, we are yet to triumph over our greatest enemy, pollution.

    However, with the new vehicle scrappage policy that PM Narendra Modi announced on Friday, August 13, 2021, the Indian government aims to get rid of all the unfit and polluting vehicles as a stern measure to suppress vehicular air pollution.

    What is the Vehicle Scrappage Policy?
    Automobile Scrappage Policy Guidelines
    When will the scrappage policy start to come into effect?
    Main Objectives of the Vehicle Scrappage Policy
    What will the new Vehicle Scrappage Policy bring in?
    How will the Indian Vehicle Scrappage Policy Benefit the Startups of the Country?
    How will the National Automobile Scrappage Policy Benefit the Common Man?
    FAQ

    What is the Vehicle Scrappage Policy?

    Scrapping means “to throw away or get rid off” and the new scrappage policy is formed around the same idea.

    The vehicle scrappage policy, as announced by the Prime Minister of India at the Investor Summit in Gujarat, revolves around the idea of phasing out all the vehicles from the Indian roads, which are polluting and deemed as unfit.

    Here’s what Narendra Modi has remarked via his Twitter handle:


    Automobile Scrappage Policy Guidelines

    The scrappage policy for the automobiles of the country lists some guidelines following which the vehicles will be scrapped.

    On this, Union Minister Nitin Gadkari mentioned that according to the newly launched vehicle scrappage policy, the commercial and personal vehicles will be scrutinized, which are over 15 years and 20 years old, and will be scrapped if they fail to pass a government-imposed test. “They will be seized and destroyed,” added Gadkari.

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    When will the scrappage policy start to come into effect?

    The automobile scrappage policy will be coming into effect from April 2022, starting with the vehicles owned by the Indian government and its allied entities like the PSUs.

    Next, the government will consider mandatory testing for heavy commercial vehicles, which will start in April 2023. Finally, the testing will also include vehicles belonging to all other categories, which will come into effect from June 2024.

    Main Objectives of the Vehicle Scrappage Policy

    Among the main objectives of the vehicle scrappage policy, the reduction of air pollution is the primary goal that the government is looking forward to attaining.

    Reducing the Pollution caused by the Vehicles

    The main objective of the vehicle scrappage policy is to oust the polluting vehicles and lessen the overall vehicular pollution to the minimum. This will be a great help towards promoting a circular economy for the country.

    Creating Employment for the Indians

    The scrappage policy of vehicles would be a major project to undertake for the government of India in the upcoming years, the new scrappage policy would attract investments worth Rs 10000 crore.

    This will not only be a project for the government workers but will be a massive employment opportunity for the youngsters, poorly employed, and the unemployed section of the country.

    Encouraging Circular Economy in India

    A circular economy can be defined as a systemic approach to economic development, which will further benefit businesses, society, and the environment at large.

    The circular economy, as hinted by Modi, is regenerative and sharply contrasts the “take-make-waste” linear model, which further strives to rely less on the consumption of non-renewable resources.

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    What will the new Vehicle Scrappage Policy bring in?

    The vehicle scrappage policy strives to phase out the above-mentioned vehicles in an environment-friendly manner. Therefore, the whole initiative ensues the establishment of scrapping infrastructures like Automated Testing Stations and the setting up of Registered Vehicle Scrapping Facilities.

    How will the Indian Vehicle Scrappage Policy Benefit the Startups of the Country?

    According to Narendra Modi’s nationwide video conference, which also had Nitin Gadkari, Minister for Road Transport and Highways, the Prime Minister has also announced that the Indian government is also willing to collaborate with the budding companies or the startups, which is expected to be a significant boost to the pandemic-struck startup ecosystem.

    How will the National Automobile Scrappage Policy Benefit the Common Man?

    Along with benefitting the startups and the unemployed, the scrappage policy will also greatly benefit the common man. Here’s how it is a win-win situation for them:

    • For all the scrapped vehicles the vehicle owners will receive a certificate to testify their scrapped car. Furthermore, the government will ensure that they will not have to pay registration fees when they buy a new car.
    • They will also receive tax benefits, which would include a discount on road tax. This way it would act as an incentive for scrapping an old vehicle.
    • The old vehicles would be seized for the person, which might seem to be a loss but actually would be profitable for the particular person. If one possesses an old vehicle, he would have to spend money on the maintenance costs, repair cost, and fuel efficiency of the old car, which he/she would be spared from.
    • The owners of the old vehicles would be eligible for the best price for car scrappage for all the workable parts like the tires.
    • Lastly, they will be eligible to buy new and advanced vehicles, which will be safer for their upcoming journey.

    FAQ

    What will happen to the vintage vehicles?

    According to the scrappage policy of the Indian government, it will scrape all the old cars except the vintage automobiles. Gadkari mentioned that no such guidelines have been formed for vintage vehicles as of now, adding they will also regulate the vintage vehicles with the upcoming list of guidelines.

    What will the incentives that the scrappage policy will entail?

    The vehicle scrappage policy will offer incentives for the owners of the scrapped vehicles. Once their vehicles are scrapped, they will be issued relevant certificates for the same. The old vehicle owners can show these certificates whenever they decide to purchase a new vehicle and can get up to a 25% rebate on road tax.

    Will there be a GST Rebate for the scrapped vehicle owners?

    According to the policy, it has been decided by the government that whenever a scrapped vehicle owner will go for a new purchase, he/she will be allowed a 5% discount on the basis of the certificate issued for their scrapped vehicle. Gadkari has further mentioned that he has also requested the Finance Minister to grant a GST rebate for them, which is pending approval.

  • How To Register For GST online | A Complete Guide For GST Registration Process Online

    If a seller wants to sell across India they need to register for GST. The GST is meant to replace a slew of indirect taxes with a federated tax. In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. The registration process is entirely paperless which means that it will take place online or digitally. Registering for a GST might seem confusing but just follow our Step by Step guide on how to register for GST online easily.

    How to Register For GST Online
    To Register For GST Online
    Documents Required To register For GST Online
    Steps To Register For GST Online
    Frequently Asked Questions About Online GST Registration

    How to Register For GST Online

    To Register For GST Online

    There are two parts in registering for GST online,

    Part A – Generate your GST Application form

    Part B – Filling in your GST Application form

    Documents Required To register For GST Online

    • PAN of the Applicant
    • Aadhaar card  
    • Proof of business registration or Incorporation certificate
    • Identity and Address proof of Promoters/Director with Photographs
    • Address proof of the place of business
    • Bank Account statement/Cancelled cheque
    • Digital Signature
    • Letter of Authorization/Board Resolution for Authorized Signatory

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    GST was implemented in India in July 2017. The GST was meant to replace a slewof indirect taxes with a federated tax. It has impacted almost all Industries,including start-ups. Startups are liable to pay taxes as they cross thethreshold limit are liable to pay GST from the moment they cross the t…
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    Steps To Register For GST Online

    Part 1: Generate Your GST Application Form

    First you need to visit official GST portal – https://www.gst.gov.in/ and under the services tab, choose Services > Registration > New Registration.

    On the registration page, enter all the requested details (including your PAN number), email address and mobile number. You need to select the option I am a Taxpayer.

    How To Register For GST Online - Step 1
    How To Register For GST Online – Step 1

    After entering the details click proceed. After that you’ll receive two different OTP on your phone and Email id for verifying the mobile number and the email id. OTP is valid only for 10 minutes. Enter the Received  OTP and click proceed.

    Once you click proceed your Temporary Reference number will be generated. Save and copy your TRN number it will be used for further filling of the form.

    This was the complete Part A of Registering for GST online. If you want some Help with tax preparation and planning, do read it.

    Now to use this TRN number, either click Proceed or Services > Registration > New Registration option and select the Temporary Reference Number (TRN).

    Enter your TRN number and the captcha text as shown on your screen. Click proceed and you will be asked to verify OTP again. (This is different from the previous OTP generated), Same OTP will be received on your phone and email id.

    Part 2: Filling Your Online GST Application Form

    Now click on action button on top right to start filling your GST application form.

    How To Register For GST Online - Step 2
    Filling in your GST application form

    The form contains 9 sections,

    Your Business Details

    Enter the details of your business. Enter the name of your shop under the Trade name and enter the constitution of business, private limited or partnership etc.

    How To Register For GST Online - Step 1
    Providing Business Details

    After you complete your registration click on save and continue to proceed further.

    Personal Information

    Enter the Required personal information and identity information. In identity information under designation, Add the designation of yourself. Suppose if you are proprietor add proprietor under that.

    How To Register For GST Online
    Providing Personal Information

    After you add all the details you have to upload your photograph, which should be in jpeg format of size maximum up to 100kb.

    Authorized Signatory

    If you are the proprietor of the company just click on primary authorized signatory and proceed further. If you are not the proprietor of the company then fill in the details of the proprietor of your company.

    Authorized Representative

    If you have an Authorized representative you have to fill in the details of your representative or else Click on save and continue to proceed further.

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    Principal Place of Business

    Here, You have to add the details where your business is located, if your business is in Delhi then add the location details of your business.

    How To Register For GST Online - Step 1
    Principal place of Business

    You also have to add nature of your business. Under the nature of possession of premises add the type of your business and provide the document proof of place of business. Suppose you have a Rented business so click on rented and provide the proof of rented agreement such as electricity bill.

    Also add the nature of business activity and click on save and continue to proceed further.

    How To Register For GST Online
    Nature of possession 

    Additional Places of Business

    If you have Additional places of business you can Add it or click on continue to proceed further.

    Goods And Services

    Here you have to add if you are selling goods or services. If you are selling physical goods add the HSN code. (HSN is a six-digit code that classifies more than 5000 products, arranged in a legal and logical structure)

    State Specific Information

    Providing this information is up to you because it is not mandatory. Click on save and continue to proceed further.

    How To Register For GST Online
    State Specific Information

    Final Verification

    This is the final step of GST form. Once you fill the details you can choose to submit with EVC or DVC. If you select EVC you’ll receive same OTP on your mobile no. and email id. If you have a digital signature you can submit with DVC.

    How To Register For GST Online
    Verification

    On completion, an Application Reference Number (ARN) will be generated and sent to your mobile number and email id. You can use this to track your application status (Services > Registration > Track Application).

    This was the complete how to register for GST online step by step.

    Frequently Asked Questions About Online GST Registration

    How do I get a new GST number?

    • Go to the official GST portal – https://www.gst.gov.in/ and under the services tab, choose services > Registration > New Registration.
    • On the Registration page, enter all the requested details (including your PAN number), email address and mobile number.
    • After entering the details, click proceed. You will receive two different OTPs on your mobile and on your email for verifying the mobile number and the email id. OTP is valid only for 10 minutes. If required, you can regenerate the OTP.
      Your Temporary Reference number will be generated at the end of this process.
    • To use this number, either click Proceed or Services > Registration > New Registration option and select the Temporary Reference Number (TRN) radio button to login using the TRN.
    • In the Temporary Reference Number (TRN) field, enter the TRN generated and enter the captcha text as shown on the screen.
    • After this, you will be asked to verify OTP again. This is different from the previous OTP generated, please enter the new OTP received. The same OTP will be received on the verified mobile number and email id.
    • This will take you to your “My Saved Application” page. You will have to fill in all the form details and submit them within 15 days. After this, your number and saved form will be deleted.

    Is GST registration free?

    The GST registration is absolutely free of cost. The registration process is entirely paperless which means that it will take place online or digitally. Registering for a GST might seem confusing but just follow our Step by Step guide on how to register for GST online easily.

    Is GST applicable for online business?

    It is a mandatory GST Registration for all Online Sellers. Under GST, all online sellers must register and pay GST. This means that even if you only bring in Rs 1 lakh, you must go online and get a GSTIN. In addition, you’re required to file monthly returns and pay taxes on all qualified sales.

    How do I file GST online?

    Registering for a GST might seem confusing but just follow our Step by Step guide on how to register for GST online easily.

    1. Go to the official GST portal – https://www.gst.gov.in/ and under the services tab, choose services > Registration > New Registration. You can also apply for GST online using our exclusive offer for Amazon by clicking here.
    2. On the Registration page, enter all the requested details (including your PAN number), email address and mobile number.
    3. After entering the details, click proceed. You will receive two different OTPs on your mobile and on your email for verifying the mobile number and the email id. OTP is valid only for 10 minutes. If required, you can regenerate the OTP.
      Your Temporary Reference number will be generated at the end of this process.
    4. To use this number, either click Proceed or Services > Registration > New Registration option and select the Temporary Reference Number (TRN) radio button to login using the TRN.
    5. In the Temporary Reference Number (TRN) field, enter the TRN generated and enter the captcha text as shown on the screen.
    6. After this you will be asked to verify OTP again. This is different from the previous OTP generated, please enter the new OTP received. The same OTP will be received on the verified mobile number and email id.
    7. This will take you to your “My Saved Application” page. You will have to fill in all the form details and submit them within 15 days. After this, your number and saved form will be deleted.

    Can I sell on Amazon without GST?

    Yes. if you are selling only GST exempted categories, then this may not be required. However, If you are listing taxable goods, GST details are required to sell online. You need to provide a GST number to Amazon at the time of registration.

    Do I need a GST number for my small business in India?

    If a seller wants to sell across India they need to register for GST. The GST is meant to replace a slew of indirect taxes with a federated tax. In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person.

    What is EVC in GST?

    In the GST portal, a person can authenticate the user using an OTP (One Time Password). The OTP is called the Electronic Verification Code (EVC) and a person who wants to do the user authentication using an OTP can select this method.

    What are the documents required for GST registration?

    To complete GST registration, you will be needing the documents like PAN, Aadhaar, business address proof, cancelled cheque, bank account statement, business registration proof or the incorporation certificate, digital signature, photograph, address proof and ID proof of the director or promoter, board resolution or letter of authorisation from the authorised signatory.

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  • GST Guide: Introduction, Compliance, Updates and Many More

    Goods and Services Tax(GST) has been introduced and implemented in India to reduce the anomalies caused by the previous tax system. GST, or Goods and Services Tax is a tax that customers have to pay when they purchase any goods or services, such as food, clothes, electronics, items of daily needs, transportation, travel, etc.

    The concept of Goods and Services Tax is that it is an Indirect Tax, i.e., this tax is not directly paid by consumers to the government, but is rather levied on the manufacturer or paid by the production centres and the providers of services. The sellers add the tax expense into their costs, and the price the buyers pay is inclusive of GST. Therefore, in most cases, people end up paying a tax even if they are not an income taxpayer.

    GST Guide

    GST is levied on the basis of the destination principle. Exports would be zero-rated, and imports would attract tax in the same way as domestic goods and services.

    Addition to the IGST in respect of the supply of goods, an additional tax of up to 1% has been proposed to be levied by the central government. The revenue from this tax system is to be assigned to the original states. It is proposed to be levied for the first two years or for a longer period, recommended by the GST Council.

    It is predicted that the tax base will be comprehensive, as virtually all goods and services will be taxable, with minimum exemptions. GST would bring in a modern tax system to ensure efficient as well as effective tax administration. It will bring greater transparency and strengthen monitoring, thus making tax evasion difficult.

    It is important for the industry to understand the impact and opportunities offered by this tax reform. GST will have effects on all industries, irrespective of the sector. It will impact the entire value chain of operations, manufacturing, distribution, warehousing, sales and pricing.

    Component analysis of GST Gross Collection
    Component analysis of GST Gross Collection

    Items outside the purview of GST

    There is a set of items which are not covered by GST. The following items are:

    • Alcohol for human consumption is not covered under GST. On alcohol, the authority to tax remains with the states.
    • GST was not imposed on five petroleum products like crude oil, diesel, petrol, natural gas and ATF.
    • The Central Government, along with GST has the power to levy additional excise duty on tobacco products.
    • The authority to decide entertainment tax levied by local bodies remains with the states.
    • Even Electricity is out of the purview of GST.

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    GST Compliance Rating

    The GST compliance rating is a rating given by the government to a business so that other businesses can review how compliant they are with the government tax department. This score will be calculated based on parameters such as timely filing of monthly and annual returns, furnishing details of input credits used, taxes paid, etc.

    These scores will be updated at periodic intervals, and their details will be published in a public domain that all businesses can access. This allows small businesses to choose the most GST-compliant vendor for their business endeavours.

    Under the previous tax system, businesses often delayed filing return and payment of taxes to gain time. Continuing this practice under GST will result in a delay in input tax credit across the chain and severely affect the working capital of businesses. The rating system will prevent the delay of credit for buyers due to the non-compliance of certain persons.

    The Impact of GST on the Indian Economy

    Following are the ways in which GST has a positive impact and will help improve the economy of India.

    Reducing in tax burden for manufacturers which will encourage quality and more productivity. The earlier system of taxation was ill-structured with a magnitude of tax clauses which prevented the manufacturers from providing optimum production, hindering growth. However, GST after implementation will relieve manufacturers from those problems by issuing tax credit to manufacturers.

    All the various tax difficulties that prevailed such as long queues at check posts and toll plazas, resulted in wastage of products which were being transported. A single GST taxation system will surpass all these hurdles and prevent unnecessary wastage which caused huge losses in costs for supplies.

    A common consumer will know how much taxes they are charged and on what grounds, which will pave way for a just and transparent tax system.

    The extension in the tax base under GST will be compounded to the revenue of the government.

    When the taxes are paid by producers for the supply of goods or services, GST will provide a tax credit. This feature will encourage producers in purchasing the raw materials from any of the registered dealers which will eventually gather all the vendors and suppliers under the GST roof.

    Customs duties which were applicable to the export of items will be removed and it will increase the competitiveness of the exporters to be at par with foreign markets.

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    Benefits of GST

    GST eliminates the cascading effect

    GST is an indirect tax that was designed to bring indirect taxation under one roof. More significantly, it is going to eliminate the cascading effect of tax that was evident earlier.

    Composition scheme for small businesses

    Under GST, small businesses (with a turnover of around Rs 20 to 75 lakhs) can benefit as it gives an option to lower taxes by using the Composition scheme. This step has brought down the tax and compliance burden on many small businesses.

    The unorganized sector is regulated under GST

    In the pre-GST period, it was often seen that certain industries in India like construction and textile were largely unregulated and unorganized.

    However, under GST, there are provisions for online compliances and payments, and for availing of input credit only when the supplier has accepted the amount. This has brought in accountability and regulation to the businesses.

    Higher threshold for registration

    In the VAT system, any business with a turnover of more than Rs 5 lakh was liable to pay VAT. Also, note that this limit differed state wise. Under the GST regime, this threshold has been increased to Rs 20 lakh, which exempts many small businesses and service providers.

    Wrap Up

    Change is necessary but definitely never easy. The government is trying to smoothen the path to GST. It is important to take a leaf from global economies that have implemented GST before us, and who overcame the teething troubles to experience the advantages of having a unified tax system and easy input credits.

  • Is GST better than the previous tax system?

    The question of which tax system is better is debatable. Before GST was introduced, the VAT system was followed in India. GST not only brought an excellent revolution in the Indian economy and society but also it increased the government revenue. Is GST practically better than the previous tax system?

    What is GST(Goods and Services Tax)?

    GST is considered as the most economically influential post-independence tax reformation in India as it has redesigned the whole concept of taxation. Being a consumption-based system, it is completely transparent and convenient than the previous tax structures. It has disregarded to society like tax-evasion and corruption on a greater level.

    In a longer period, it did not only brought an amazing boost to the Indian economy and society but also the government revenue increased. It practically removed the main problem of the previous tax system which was cascading effect.

    GST is a value added tax that is collected at every level in the supply chain process. In the earlier indirect tax time, in certain cases, the tax paid on commodities or services were not available for setting off the output tax liability. For example, the excise paid by manufacturers were not available for set-off against VAT.

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    What is VAT(the previous Tax structure)?

    Most people are accustomed or aware of the VAT system even if they don’t run a firm or business. For instance, if you purchase any product or go to a hotel, in the lower part of the bill, you are likely to see an extra cost in the form of a percentage. This is called the value added tax, VAT.

    VAT is a consumption tax levied on a product at each stage of the supply chain. VAT has been a major reform for India’s tax system when it was introduced around 2005. This change was desperately needed due to issues with India’s previous taxation system, where the cascading effect of taxes had a negative effect.

    Is GST better than VAT

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    StartupTalkyArbaaz sayed

    Educated Consumer

    Previous tax regime was loaded with multiple taxes at the state level which included VAT, Entertainment Tax, Luxury tax, Taxes on lottery, betting and gambling, State Cesses and Surcharges, Octroi, Entry Tax and purchase tax. Multiple taxes at the central level were also levied which included Central Excise Duty, Additional Excise Duties, Service Tax, and Additional Customs Duty.

    This multitude of levied tax kept the consumers confused and unsure on taxes being charged. Consumers were unable to check or verify the correct levy and payment of taxes, leading to consumers being overcharged on account of false taxes. GST is based on a PAN-India model tax system, consumers have become vigilant before paying taxes. GST being a “ONE NATION ONE TAX”, has helped rationalize and revolutionize the whole economy.

    Reduction in Logistic cost

    A leading logistics company recently said that after the implementation of the E-way bill and GST, heavy transport vehicles i.e. Trucks are covering 10-15% more distance as compared to earlier regime. In earlier regime trucks were hovering around 300-350 km per day, however, after the implementation of GST this distance has increased to 400-410 km per day. This has helped in the reduction of logistics costs. This reduction has brought India at the edge of a logistic revolution.

    Eliminate The Cascading Effect

    Cascading effect is a phenomenon of taxation that puts an extra burden on the end consumer. With the cascading effect in place, the taxes were levied on the value on which the previous buyer has already paid the tax. Thus, GST removed this tax on tax by bringing the concept of input tax credit that can be claimed at every stage by the seller or service providers.

    Simple Online Procedure

    The GST has brought in a new digital era in the Indian taxation system. All the process, right from the registration to the payment of taxes has been made online. This uniform e-registration is a considerable change as compared to the earlier decentralized multiple registration mechanisms.

    Destination-based Taxation

    With the onset of GST, the taxes were charged on the point of consumption, unlike the former tax structure that levied taxes on the place of manufacturing. This change from origin-based tax to destination-based tax has also significantly altered the revenue generation of producer states as well as consumer states.

    Real Estate

    The government has rationalized tax rates in the real estate sector from 12%/8% to 5%/1% also giving one-time option for ongoing projects to adopt the tax scheme. Home investors were forced to pay multiple taxes on real-estate buys in the pre-GST era, and in the post-GST period, they were forced to pay full taxes without benefit of ITC being passed to the consumers.

    Thereby commodities were always overpriced. With this new tax scheme, consumers are ensured that they are bound to pay an amount with a full benefit of Input tax credit flowing to them without any discretion of suppliers.

    The reduced tax burden on Tax Payers

    The tax burden before GST on taxpayer was considerably high. With GST adaption, the tax burden has reduced significantly since all taxes are integrated, and the burden is split equitably between manufacturing and services. Certain taxes became part of the cost. Therefore, with the simple mechanism of GST, the cost burden has reduced by removing such effect and providing credit.

    GST revenue Collection
    GST revenue Collection

    The GST components

    CGST

    Central GST is referred as CGST, applicable on supplies within the state. Tax collected to be shared with the Centre.

    SGST

    State GST is referred as SGST, applicable on supplies within the state, whatever tax collected will be shared to State.

    UTGST

    Union Territory GST is referred as UTGST, applicable on supplies within the union territory.

    IGST

    Integrated GST is applicable on interstate and import transactions. Hence, tax collected is shared between the Centre and State.

    Conclusion

    By implementing GST, the Indian government is looking forward to improving the economy by eliminating the cascading system of tax and controlling corruption in the business processes in India which were possible in the previous tax system.

  • Impact of GST on Startups and Small Businesses in India

    GST was implemented in India in July 2017. The GST was meant to replace a slew of indirect taxes with a federated tax. It has impacted almost all Industries, including start-ups. Startups are liable to pay taxes as they cross the threshold limit are liable to pay GST from the moment they cross the threshold limit (Rs 20 lakh or Rs 10 lakh as the case may be).

    India is the third-largest startup ecosystem with over 27,916 startups, as of February 1, 2020. Startups play a vital role in the development of the country. The success ratio of new startups is hardly 1%, with GST startups may find it easy to comply with taxes and focus on building and managing their startups. In this article we will focus on Impact of GST on Startups and Small businesses in India.

    Impact of GST on Startups and Small Businesses

    Positive impact

    1. Reduced logistics cost

    GST has reduced the transportation cost levied during the interstate transport of goods. CST and octroi are the two taxes that were levied during the interstate transportation of goods. these taxes are collected by individual states. After the introduction of GST, It has replaced CST and octroi which has reduced the transportation and logistics costs. Many states avoid supplying goods to other states due to octroi. The reduction of delivery time and logistics cost had a great impact on startups.

    2. Reduced Tax Burden

    Earlier businesses with a turnover of less than Rs. 5 lakhs do not have to pay the VAT registration fee. The limit has been increased to 20 lakhs which gave a huge relief to Small businesses and startups.

    3. Cascading Effect

    The cascading effect is the effect on which tax is imposed on previously charged taxes. for example, a product on which excise duty has been paid can also be liable to VAT. Imagine a situation where a manufacturer produces a certain item for Rs.100. He charges excise duty at 12% and sells it to the shopkeeper at Rs.112. The shopkeeper sells the same item to a consumer at Rs.126 after charging VAT at 12.5%. in this case the consumer has to pay additional VAT on the product. GST has mitigated this cascading effect as only one tax is applicable.

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    4. Ease of Managing Business

    Before GST, businesses have has to get registered with various tax authorities and maintain many documents. they also needed to file different tax returns to different authorities. Post GST, there is single registration and very less paper work required. due to this businesses now can focus on productive businesses operations rather than taxes.

    5. Expansion of Business

    Most businesses restricted their business operations to one state due to interstate taxes and complicated tax procedures. Post GST inter-state tax complications and transport/shipping cost has reduced.

    Want to register for GST online. Follow our step by step guide to register for GST easily.

    impact of GST
    Impact of GST on Excise and Sales Tax

    Negative Impact of GST

    There are also some difficulties and problems which have affected the startup ecosystem.

    1. Decline to freelancers

    If you do not have a fixed place of business or you are a freelancer you have to register yourself as a casual taxable person under the GST. The 20 lakhs limit is not applicable in this case. even if you don’t have a fixed place of business you have to register yourself under GST.

    2. Tax overburden on Startups

    Under GST it has become mandatory to upload invoices and make an e-way bill on a real-time basis. Startups have to focus on tax compliance regularly which affects their innovation capabilities.

    3. Small Startups under Tax net

    Earlier manufacturing units having a turnover of fewer than 1.5 crores do not have to pay or get registration. Post GST the threshold has been bough down to as low as 20 lakhs. This has bought many small startups under the tax net.

    4. Reverse charge mechanism

    If the goods delivered by a small business who is exempted from GST, supplied goods to a firm registered under GST. In this case the buyer has to pay the GST by self invoicing.

    5. Technology challenges

    As all the GST compliance as all filings and registrations have become online, some small businesses and startups might face some problems.

    GST has its challenges and has impacted the startups and small businesses in both positive and negative ways. It’s clear that the positive impact of GST outweighs the negatives that have paved the way for the national market.