From the time of its implementation in July 2017, GST has undergone many amendments and even today businesses need to put in efforts in undertaking GST compliances. Having said that, the government is taking steps to simplify the GST filing process to address compliance concerns of MSMEs. The intention is to make it simple and to keep up with the spirit of Digital India.
Importance of GST compliance: All taxpayers registered under GST need to comply with its rules and regulations. To monitor how businesses are adhering to GST regulations, the government is constantly updating profiles of registered persons on the GST portal which can be checked by PAN or GSTIN. Some details provided are status of the registration and compliance in return filing.
As a seller, one has to ensure invoices are rightly issued and uploaded in the GST return for the buyer to avail credits. As a buyer, one needs to ensure that invoices are correct so that there is no tax credit loss.
Challenges MSMEs face: While GST began with different forms for inward and outward supplies as well as a monthly return, at present taxpayers need to furnish two single returns on a monthly basis. To further ease compliances for MSMEs, the GST Council approved implementation of a new return filing system, whereby with effect from January 1, 2021, GST taxpayers having an aggregate annual turnover of up to Rs 5 crore are required to fill four GSTR 3B forms against the previous 12.
Educating taxpayers on this relatively new law is one of the challenges due to its ever-evolving nature. Some areas around GST compliance that are noteworthy are real-time uploading of invoices (e-invoicing, which is applicable to taxpayers with pan-India turnover of Rs 50 crore), and actions to claim input tax credit (ITC). A pain point here is that small businesses must devote time and have dedicated personnel for this.
Businesses that deal with multiple vendors have to ensure that every time they get an invoice, their GST number is accurately printed on it. When this does not happen, these invoices become non-compliant. Also, for non-compliance by vendors, businesses can end up losing 5-28% ITC.
Dealing with multiple vendors adds to the hassle of handling physical invoices and different formats. Businesses need to put in extra effort in keeping track of these invoices and uploading them on the GST portal. This further increases chances of error and the risk of being non-compliant.
It is here that e-commerce platforms can help MSMEs ease their GST compliance issues.
Source : Financial Express