With the introduction of GST lot of new variables have come into the equation and the form of compliance with the law, which for years had been going in a settled way, is all of sudden being disrupted and the trajectory of the same has been changed.
It is inevitable, the new trajectory is going to pose challenges to small business owners and professionals but the same can be handled with quite bit of prepration. GST is asking for change in the way every small business works and small business have to be ready for the same.
Get your invoices right:
In the GST regime invoice formats have drastically changed. GST envisages 6 types of documents which can be issued under the GST regime namely:
- Tax invoice– Normal Invoice
- Bill of supply– Invoice to be issued while selling exempted good/services or under composition scheme
- Receipt voucher– To be issued on receipt of advance
- Refund voucher– To be issued when advance is received but no supply is made
- Payment voucher– To be issued when making purchases from a URD
- Revised tax invoice and credit or debit notes
The format for the above mentioned documents have been set out in the Invoicing rules issued by the GST council and without the particulars as mentioned the invoice will be treated as an invalid document and the purchaser cannot take the input credit of the same.
Get your returns right:
With GST the Government is not the enforcer but the businesses are themselves enforcers of the law. Without proper returns benefits under GST cannot be availed. GST is clear-cut in that aspect.
Hence a return by the supplier will be matched with the return of the purchaser and vice versa and any inconsistency will be highlighted. Hence the returns form a critical part of ensuring that your business runs smooth under the GST regime.
The returns are so exhaustive that if you receive an advance, the same has to be mentioned in the return, if you dont pay your supplier the money you owe , the same has to mentioned in the return.
Hence returns contain each and every aspect of your business and not filing one- is not even an option in GST!
Get your HSN/Accounting Codes right:
HSN codes are codes given to each product category under the GST. HSN are basically codes which are universally accepted and laid out by GATT( Now World Custom Organisation).
Accounting codes are codes given to each identifiable class of services under GST.
Each HSN/AC codes have different rates under GST hence the HSN/AC under which your goods/services fall should be carefully picked out. If there is a mistake in HSN/AC code you might just end up paying more tax.
Let me reiterate rates depend on HSN/AC so be careful about classifying your goods/services. There are litigation which have reached Supreme Court just for the classification issue( Just to give you a glimpse on the seriousness of the matter).
Get acquainted with Valuation and Place of supply:
GST Invoicing rules lay out that in every tax invoice value of the supply and place of supply should be mentioned. For each and every product/service place of supply might change.
For determining place of supply of goods, movement of goods and location of goods are to be considered. Whereas for services the factors vary from service to service. Hence it becomes critical that business get their homework done and get acquainted with all the place of supply and valuation of goods/ services.
Get ready with your DSCs:
GST has explicitly mentioned that a digital/electronic invoice signed through DSC can be issued. Hence it’s a good enough initiative by the government to make business go paperless. Hence start using invoices electronically. Till date there was no explicit mention of the same and with GST the doors to making offices paperless have truly begun.
“Readiness is mother of luck!”