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One year of GST: SME cash flows impacted, but story has a sunny side too

One year of GST: SME cash flows impacted, but story has a sunny side too

GST is going to be one year old on July 1, and the journey over the past one year has been a mixed bag. While the objective of GST to eliminate the cascading effect of tax and gst_1_Yearto simplify indirect taxation in India is noble, implementation of the new regime has been easier said than done. There have been continuous challenges in coming to terms with transitional requirements, filing returns on the portal, and equipping one’s business for the increased compliance burden that GST brought along with it.

However, it is heartening to note that the government has taken cognizance of the various transition challenges, and has lent support by extending return-filing deadlines and deferring certain aspects of GST, so that the multitude of small businesses across India adopt to it easily.

Given the rollercoaster ride GST has been through, it certainly calls for an assessment of how exactly it has been beneficial to the heart of the Indian economy – the SME.

While GST essentially brought a lot of businesses under the tax net for the first time, the carrot of input tax credit flowing freely through the chain, would have been good news for most. The elimination of taxes such as central sales tax, for which credit was not available earlier, and elimination of the cascading effect of VAT being charged upon the excise component, has surely enhanced the credit pool for most businesses. As a result, working capital has had a positive impact.

However, a number of factors have also come into play, when one sees the other side of the coin. To begin with, the average trade credit cycle in the Indian market generally spans beyond the GST payment due date of the 20th of next month. This means that more often than not, businesses have to pay GST on value addition from their own funds. Speaking of businesses that operate out of several branches, stock transfers have become a taxable event under GST, which means that paying GST has become a more frequent occurrence for them. While one may argue that input tax credit is available to the recipient branch, the fact remains that the GST to be shelled out impacts the cash flow at the console level. And then there are certain sectors, such as the fertiliser industry, where an inverted duty structure resulted in blockage of cash for businesses.

One of the debatable aspects of GST from a working capital perspective has been the composition scheme. While the intention always has been to provide greater relief to the composition dealer, the absence of input tax credit for such a business is bound to increase cost of business. However, the saving grace is that the low-end flat rate of tax is expected to balance out the total outflow from such a dealer. Last but not the least, the issue of delayed export refunds has resulted in a significant cash blockage for exporters, and the government is trying its best to release such refunds as soon as possible.

However, irrespective of the hiccups GST has seen in the past one year, one cannot altogether ignore the positives. State boundaries have dissolved, the taxation structure has become simpler and the national e-way bill is well on its way to bind the entire nation into one market. With the simplified return filing model days away from implementation, it can be expected that GST will become a far smoother process than what it is right now, promising a golden future for the SMEs in India.

Source: Business Standard
Disclaimer: The author is Chief Financial Officer, Tally Solutions Pvt. Ltd. Views expressed are personal. They do not reflect the view/s of XaTTaX.
Here’s how much the govt panel recommends lowering of GST rates for SMEs

Here’s how much the govt panel recommends lowering of GST rates for SMEs

Here's how much the govt panel recommends lowering of GST rates for SMEs
There may be some good news for small and medium businesses as a ministerial panel has recommended the lowering of the goods and service tax (GST) rates for them. It is also looking to extend the benefits to more such units in an attempt to reduce their tax burden and improve compliance.

The GST Council will be meeting on November 9-10 and could accept the changes in order to provide relief to small enterprises, eateries and traders.

The ministerial panel proposes a 1% GST for traders, manufacturers and restaurants, instead of the 1%, 2% and 5%, respectively, according to a Live Mint report.

The panel further recommended the increasing the ceiling for eligibility to enterprises with an annual revenue of less than Rs 1.5 crore from Rs 1 crore earlier.

Also Read: GST Council may fix single tax rate for similar product categories

The GST Council had on October 6 took the decision to increase the current ceiling from Rs 75 lakh to Rs 1 lakh. It also extended the deadline for the signing up for the scheme to March 31, 2018.

The ministerial panel which made these recommendations include Assam finance minister Himanta Biswa Sarma, Bihar deputy chief minister Sushil Modi, Jammu and Kashmir finance minister Haseeb Drabu, Punjab finance minister Manpreet Singh Badal and Chhattisgarh minister of commercial taxes Amar Agarwal.

The panel has in its earlier meeting this month had proposed that there be no distinction between air-conditioned and non-air conditioned restaurants and that they should be taxed at 12% as against 18% now.

The report further quoted a GST Council official saying that the ministerial panel has recommended the GST Council let small traders pay either 1% on their revenue of taxable items such as loose rise, pulses, etc, are exempt from GST or 0.5% tax on the total turnover.

Also Read: Glitches in GSTR2 filing process a concern for cash flows

Sharma said that on the allowing of enterprises in the composition scheme to avail of input tax credits on business transactions, the panel could not reach a consensus and the matter will be referred back to the GST Council.

This lowering of GST rates comes after the government has come under severe criticism for the burden facing small business and traders over the implementation of goods & service tax and bringing more businesses under the tax bracket.

Source : Zee Business
More relief for SMEs as GST Council set to reduce late filing penalties

More relief for SMEs as GST Council set to reduce late filing penalties

ease GST compliance burden on SMEs

More respite could be on the way small and medium enterprises (SMEs), with the goods and services tax (GST) council set to ease a string of procedures, including partial relief on penalties on late filing of GST returns.

The tax department’s proposal, if approved by the GST Council in its next meeting on November 10 on Guwahati, will lessen the struggles of small businesses still grappling to understand the nuances of the new indirect tax system that was rolled out from July 1.

“The idea is that an entity should not end up paying penalty higher than his tax liability,” a senior government official told Moneycontrol, adding that the government, however, doesn’t intend to waive off the entire late fee.

For instance, there have been cases, where businesses have not been able to file returns due to slowdown in the information technology (IT) backbone of the tax system GST Network (GSTN). A late fee was charged, which turned out to be higher than the company’s tax liability.

Similarly, a taxpayer might not have filed return as his tax liability is nil. However, such assessees are also subjected to penalty of late fee, the official explained.

Also Read: GST rates need to be overhauled to reduce burden on small firms : Hasmukh Adhia

The government does not want to penalise or pull up taxpayers who have missed filing returns, mainly due to technical snags on GSTN, such as slowdown of the system. In fact, small taxpayers are still not used to filing returns online and may have missed deadlines owing to lack of clarity pertaining to processes and the system.

The move is aimed at soothing frayed nerves of millions of small enterprises and exporters that have been battling with procedural irritants, delayed refunds and technical glitches on returns filing.

The easing on late fee penalties will follow the big changes that the finance minister Arun Jaitley-headed council approved on October 6 to iron out rough edges of the new tax system has been hit by multiple pain points since its rollout.

Currently, a late fee of Rs 100 each, under Central GST (CGST) and State GST (SGST) or Rs 200 per day is levied on an assessee. In addition to the late fee, an 18 percent interest per annum also needs to be paid.

Also Read: GST refund claims for exporters for August, September to start this week

“We are looking at giving relief to taxpayers so that they do not have to pay the entire Rs 200 per day late fee,” the official said.

Last month, the government had waived off the late fee of Rs 200 per day for taxpayers who failed to adhere to the deadline of the first set of GST returns for the month of July.

“Late fee for all taxpayers who could not file GSTR3B for month of July has been waived, but not the interest on late payment of dues. Interest will be applicable to all taxpayers who have not discharged their complete GST liability for July by August 25,” finance ministry said in the microblogging portal Twitter in September.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source : Money Control
GST rates need to be overhauled to reduce burden on small firms : Hasmukh Adhia

GST rates need to be overhauled to reduce burden on small firms : Hasmukh Adhia

Govt planning steps to ease GST compliance burden on SMEs: Hasmukh Adhia

Policymakers are considering steps to ease the compliance burden related to the goods and services tax (GST) on small businesses and to make product classification for taxation less complicated, said revenue secretary Hasmukh Adhia.

The simplification process may result in some readjustment of tax rates, including a possible reduction in some items that attract the highest tax slab of 28%.

Products are now classified into various subcategories—in many cases, different subcategories fall in different tax slabs—under a code called the harmonized system of nomenclature (HSN) that existed before GST was implemented on 1 July. Such a detailed classification is hard to follow for small and medium enterprises (SMEs).

Addressing concerns of SMEs and harmonization of items for better tax compliance is on the agenda, Adhia said in an interview.

Also Read: Items In 28% GST Rate Slab Needs To Be Pruned, Says Hasmukh Adhia

News agency PTI reported on Sunday said that the government is considering easing the compliance burden on SMEs. “There is a need for harmonization of items chapter-wise and wherever we find there is a big burden on small and medium businesses and on the common man, if we bring them down, there will be better compliance,” the report cited Adhia as saying.

The government’s willingness to calibrate the GST system is significant considering that tax compliance has been below expectations in the first three months since the new indirect tax was introduced. An easier compliance regime for SMEs is unlikely to impact the exchequer adversely as the lion’s share of indirect taxes comes from large corporations.

Mint reported on Saturday that a little over 3.94 million assessees paid the GST and filed returns for the month of September, slightly more than the 3.76 million returns received for the previous month.

The finance ministry had earlier said that it had expected 6.8 million returns for August.

“Adapting the HSN code to make it simpler will help everyone in the industry, especially SMEs. It could also result in rationalization of tax rates, including a possible reduction from the highest slab,” said Pratik Jain, partner and leader of indirect taxes, PwC India.

The GST Council is working on addressing the concerns of SMEs. A ministerial panel, which has been tasked with finding ways of making a liberal quarterly tax payment scheme for SMEs, is expected to meet on 29 October before presenting its proposals to the GST Council for approval. The council is scheduled to meet on 9 November in Guwahati.

Members of the ministerial panel include Assam finance minister Himanta Biswa Sarma, Bihar deputy chief minister Sushil Kumar Modi, Jammu and Kashmir finance minister Haseeb Drabu, Punjab finance minister Manpreet Singh Badal and Chhattisgarh commercial taxes minister Amar Agrawal.

Policymakers are focusing on easing the problems faced by SMEs as the tax reform implemented within a year of last November’s demonetization has rattled this segment, a major source of employment in the country.

SMEs also play a large role in economic growth, accounting for about 95% of industrial units in the country and about 40% of value addition in the manufacturing sector. According to a government survey published in 2011, SMEs account for about 80 million jobs in the Indian economy.

GST Ready Invoicing Software – Generate GST Compliant Invoice

Source: Live Mint

Could the Government’s initiatives make GST a simple affair?

Could the Government’s initiatives make GST a simple affair?

Make GST Simple

It’s been barely three months since the introduction of the Goods and Services Tax (GST), the good and simple tax law has been further simplified. The Hon’ble Prime Minister Narendra Modi also stated that the decisions taken by the GST Council in its twenty-second meeting have evoked the mood of Diwali festival for taxpayers.

The government was flooded with several representations primarily from the exporters as well as Small and Medium Enterprises (SME) on the varied challenges faced by them in the first quarter of GST implementation. The trader community especially merchant traders/exporters were facing serious concerns on account of blockage of working capital and delayed refund of the taxes paid on export of goods or services. The taxpayers were finding it difficult to undertake compliances correctly due to system issues and they were puzzled by the complications in the return filing process, reverse charge on procurement from registered suppliers, etc.

Taking a note of the increasing dissent in the exporter and trading community, the GST Council has taken several decisions which are expected to benefit the exporters and SMEs and is intended to ease the compliance burden. Some of the key decisions taken by the GST Council especially for exporters include the extension of the upfront exemption from IGST on procurements available under various schemes such as advance authorisation, Export Promotion Capital Goods Scheme and 100% Export Oriented Units (EOUs). The exemption will apply to the procurement of goods whether imported or sourced indigenously. However, the said benefit is not extended to the procurement of services. As the contribution of services sector increases in the economy, the exporters would have rejoiced had the scheme extended to cover the procurement of services as well. Further, in the absence of any specific notification, it is not clear whether the service export units (such as Software Technology Parks of India /Service EOU) can avail the said exemption.

Another attempt made to alleviate the burden of working capital for merchant exporter was to reduce the GST rate on the procurements made by such exporters to a marginal rate of 0.1%. The GST Council has also announced that the refunds of the IGST paid on exports in the month of July 2017 will be paid/cleared from 10 October 2017 and that for the month of August 2017 will be cleared from 18 October 2017. The authorities also issued a Circular on 9 October 2017 clarifying the procedural aspects for grant of refund to exporters. Trade and industry will celebrate the festival of lights if the burden of working capital is made lighter by actual grant of refund within the timelines announced.

Also Read: GST composition scheme: GoM consensus on providing relief to small restaurants

Further, the decision to defer the compliance under the reverse charge mechanism applicable for procurements from unregistered suppliers till 31 March 2018 is a welcome relief. However, the trade expects that such reverse charge mechanism should be withdrawn completely and not deferred only for a few months.

Contrary to the industry demand for the abolition of the e-way bill system, the GST Council has decided to implement the same in a staggered manner from 1 January 2018 and on an all India basis from till 31 March 2018. The industry believes that given the stringent control and penal provisions for issuance of invoice/delivery challan for every movement of goods, the requirement for e-way bills could unnecessarily lead to additional compliance burden and not contribute to the ease of doing business in India.

Small enterprises can rejoice as the limit for composition scheme has been enhanced to INR1 crore in a move to provide relief to a large base of small taxpayers. Also, the SME sector has been granted the facility to furnish tax returns and tax payments on a quarterly basis instead of a monthly return/payment. However, all the taxpayers will have to file the monthly returns for the first quarter and the benefit of quarterly returns can be availed only from the quarter of October-December 2017. Thus, all taxpayers will have to experience the online matching concept and monthly return for the first quarter ending in September 2017.

Read: Are businesses really facing problems or is it just another political stunt with GST?

Unlike the erstwhile regime, the time of supply of goods also includes the receipt of advance and this has affected small dealers and manufacturers as they had to prepay the GST. Therefore, the GST Council has granted a waiver from payment of GST on receipt of advances. Now, small dealers and manufacturers having an annual aggregate turnover upto INR1.5 crore shall be liable to pay GST only on actual supplies of goods and not on advances received. This can also help eliminate the issue of non-availability of input tax credit albeit only for a small section of the taxpayers. Even the Tax Deducted at Source (TDS) and the Tax Collected at source (TCS) provisions are deferred till 31 March 2018.

Besides the above key measures, the GST Council has also rationalised the applicable GST rates for many products in line with the industry representation. The noteworthy items primarily include food items, unbranded ayurvedic/homoeopathy medicines, man-made and synthetic/artificial filament yarn, e-waste, etc.

Another crucial matter for the manufacturing sector is the uncertainty on the quantum of area-based incentives including incentives offered by states under the state industrial policy. Though recently a notification to the effect was issued in the public domain by the central government, the stand of state governments is not clear.

Read: Tracking the GST that you pay is now at your fingertips!

While some relaxations announced by the GST Council are a step in the right direction, however, the job is not yet done. These measures are primarily aimed at the SME sector and all other taxpayers who have an annual turnover of more than INR1.5 crore will still be required to comply with stringent compliance under GST. Besides this, there are several other challenges which the industry is facing especially with regard to a stabilisation of GSTN/technical glitches and it is expected that the GST Council will accord due importance to these issues to help ensure that the real intended benefit of GST is enjoyed equally by the trade and the consumer. These steps in a continuous dialogue between the government and trade can really make GST, in a true sense, a Good and Simple Tax.

Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Forbes India
GST: higher liquidity needs may weigh on SMEs’ credit ratings

GST: higher liquidity needs may weigh on SMEs’ credit ratings

GST: higher liquidity needs may weigh on SMEs’ credit ratings

Technology troubles notwithstanding, a key challenge that small and medium enterprises (SMEs) are faced with in the goods and services tax (GST) era is the need for increased working capital.

Ambiguous GST filing processes have caused temporary disruption for SMEs as their clients are delaying payments seeking clarity on invoice-matching process, resulting in stretched working capital requirements.

Under the new tax regime, SME exporters have to first pay integrated GST and seek a refund only after goods are exported. Also, firms with annual revenue of more than Rs20 lakh (Rs10 lakh in northeastern states), which are now under the tax net, will need additional funds. Add to that, higher compliance cost and greater interdependence on the supply chain to claim input tax credit.

Overall demand is subdued and margins are already under pressure due to surging raw material prices. So the fear is that the profitability and debt profiles of SMEs may get adversely impacted if they fail to pass on the increased tax burden to customers, particularly in the services sector.

Also, GST has come close on the heels of demonetization, which already impaired balance sheets of smaller and mid-sized firms, resulting in ratings revisions.

“There were downward revisions in cases where businesses were impacted post demonetization. Also, in our assessments, we factored in the anticipated slowdown in business growth during the second half of FY17 and impact on credit profile,” said R. Vasudevan, business head at Crisil SME Ratings.

Post-demonetization, during the six-month period from November 2016 to April 2017, CARE Ratings Ltd upgraded 165 SMEs and downgraded 185 out of total rating reviews of 1,721 SMEs undertaken in this period.

“The rating upgrade to downgrade ratio stands at 0.99 time, thereby reflecting higher number of downgrades as compared to upgrades have taken place after demonetization. On the other hand, the ratio of rating upgrade to downgrade was 1.05 times during the immediate seven months before demonetization,” said Yogesh Shah, director (corporate ratings) at CARE Ratings.

Though GST implementation was not a sudden event like demonetization, its complex rate structure, rules and automated filing system make transition to the new law challenging, especially for SMEs.

According to the government, 7.2 million taxpayers migrated to GST from the earlier tax regime and an extra 1.8 million new assessees were added. Of the 5.9 million who were due to file their returns by 25 August, 3.8 million—representing 64.4%—paid taxes by the 25 August deadline.

Several businesses may not have been able to file returns in time as clarity on transition credits was provided quite late, tax experts said, adding that some uncertainty on the level of compliance is likely to remain for now.

According to Vasudevan, organized companies are showing signs of smoother transition, but unorganized ones are facing a tough time. Sectors with a large share of unorganized firms including textiles, leather and logistics will require a longer duration to adapt to the GST ecosystem, he added.

To conclude, analysts are not ruling out credit downgrades for SMEs if they are unable to cope with the new business environment within a few months.

XatTaX: India’s most trusted GST compliance software – 100% accurate GST filing

Source :  Livemint
GST impact: Maharashtra may revise incentives plan

GST impact: Maharashtra may revise incentives plan

gst impact : psi

The Maharashtra government plans to revise the Package Scheme of Incentives (PSI) offered to attract investments in the state for industrial development, and to promote employment generation.

This is necessitated due to the launch of the Goods & Services Tax (GST), as beneficiaries from various sectors, including automobile, steel, cement, textiles and mirco, small and medium enterprises (MSMEs) may lose the permissible quantum of refund towards Value Added Tax (VAT) and central sales tax (CST) under the VAT regime. The state industries department has already launched an extensive review of the GST impact on various sectors. The department will then introduce a revised PSI. The present PSI, brought into effect in 2013, is applicable till March 2018.

An industries department official, on the condition of anonymity, said under the proposed revised PSI, industrial units will get interest and power tariff subsidies apart from the exemption in stamp duty, octroi duty and electricity duty. These benefits are generally granted as subsidies based on the quantum of payment of VAT and CST by companies to the state government according to their manufacturing activities over a specified time period. The state’s annual outgo towards refund paid to auto, cement, steel and other units is of the order of Rs 3,000 crore.

”Presently, industrial units get a VAT refund on 20 per cent of local sales (within Maharashtra) and a 2 per cent refund of CST on nearly 80 per cent of inter-state sales (outside the state). The CST is also paid to the state government (being the originating state) as it is calculated towards the incentive.

GST Compliance – Register Now To Get Free Demo

However, with the shift to the GST regime, the benefits will now be restricted to 20 per cent of local sales, with the units standing to lose out on a refund for 80 per cent of sales outside the state,” said the official. He added that various sectors made a strong case for the protection of their benefits during the GST regime, and called for an increase in its tenure beyond March 2018.

The officer said the textile sector has brought to the state government’s notice that it would have to bear an additional burden following a 5 per cent GST on cotton. Therefore, it has pleaded for a protection of benefits under the GST regime. Further, the small units, which are not entitled to benefits based on gross taxes paid, but on net taxes paid, have hinted that they would be hit badly.

KPMG, a leading auditing firm, in its recent analysis on the GST impact on PSI said the picture changes dramatically. There will be a two-fold impact on the quantum of incentives, therefore, inter-state sales will not contribute to the incentives under GST, and the effective tax rate could also be lower.

XaTTaX: Cloud and On-Premiss Based GST Filing Software For India

GST to be positive for auto, retail sector; negative for SMEs: Fitch

GST to be positive for auto, retail sector; negative for SMEs: Fitch

GST: Fitch-Ratings

New indirect tax regime Goods and Services Tax (GST) is likely to be beneficial for auto, cement and organised retail sectors, but will have a negative impact on oil and gas, and SME sectors, Fitch Ratings said today.

In contrast, the impact would be broadly neutral for property, electricity, telecom, pharmaceutical and fertiliser sectors, it said.

“The national service tax (GST), is unlikely to lead to rating changes for any of Fitch’s internationally rated corporates despite being negative for certain sectors,” it said.

However, implementation risks will remain over the next 12 months due to the complexities of adopting the new system amid a culture of poor compliance, particularly among the traditional retail and SME sectors.

GST Ready Software – For Small And Medium Business

Implemented on July 1, Goods and Services Tax (GST) replaces over 17 different taxes, including excise, service tax and VAT.

“A number of near-term challenges for the larger corporates are likely to persist until all trading counter parties are on the system and familiar with the different tax rates that will apply to their goods and services,” Fitch said.

Under the GST regime, a corporate will only be able to apply GST input tax credits after its supplier of goods or services has first settled its GST payment with the government. This means that the burden of non-compliance by the supplier will rest with the purchaser and not the government, the US-based agency said.

“Accordingly, GST tax truancy by financially weak and non-compliant companies lower down the supply chain could limit the amount of input tax credits available for the larger and financially strong corporates,” Fitch said.

Ease Your GST Filing & Invoice – with XaTTaX GST Software

Source: India Today
Still haven’t got the hang of GST? With technology in place, you’re ready to roll

Still haven’t got the hang of GST? With technology in place, you’re ready to roll

GST- Software

It has been twelve days since India overhauled its entire system of taxation; however there are many businesses and traders who are still under a cloud of confusion regarding the modalities of the new system. While the Goods and Services Tax became a reality on July 1, several small and medium businesses are still undergoing transitional issues.

ET reported on how several small retailers are still selling their existing stock at pre-GST rates as they are not ready to move on to the new system. An increase in the reporting and filing requirements has made GST compliance a troublesome and costly affair for the SME community.

Reluctant they may be but it will not be for long that SMEs can afford to ignore GST. While compliance and technicalities are issues they need to confront, SMEs are not alone in the struggle. There are several companies which have launched software products to smooth the path of compliance for SMEs.

We bring you a list of solutions to help you navigate GST smoothly and be compliant. 
Thomson Reuters’ OneSource: Thomson Reuters’ tax-content calculation-to-compliance solution provides the logic to accurately calculate GST based on the place of supply rules for the sale and acquisition of goods and services for intrastate, interstate, import, export, and stock transfer transactions. It also includes:
a) The logic to enable CGST, SGST, and IGST calculations for domestic sales and purchases as well as imports and exports
b) Calculation of output tax in the seller’s location and input tax credits in the buyer’s location
c) Support for the GST Compensation Fund Cess on luxury and sin tax items
d) Integration with the GSTN, supporting notifications, signatures and required validations
e) Automation of the import of data from existing ERP systems and management of issues with data integrity.

XatTaX: India’s most trusted GST compliance software – 100% accurate GST filing

Masters India’s Auto Tax: “Client’s data security is more important to us. To control the data access, various measures such as RBAC, Database Activity Monitoring and dual access control have been implemented. Database encryption, encrypted checksum, PKI based digital signatures are also available to shield the data from external intervention. We operate within a VPC, further protected by WAF and DDoS layer to protect against intrusion,” said Masters India, CEO, Nishank Goyal.

Some of the features of Auto Tax include:
a) Real-time GST Updates: AutoTax is designed to update its directories in real time with changes in tax rates and rules- protecting your business from unsuspected, sudden and overlooked changes in law.
b) Accessible Reporting and Audit Trail
c) On-the-go: AutoTax is designed on a cloud infrastructure, so you can monitor your compliance status anywhere, anytime. You can even sign returns, get timely notifications and alerts with their mobile interface.
d) Plug-in AutoTax in the applications you already use, so you do not have to worry about importing data from your ERP system, or accounting software.

HP and KPMG’s GST Solution

GST Solution comprises of hardware from the hardware PC brand-HP, GST invoicing software by KPMG ,cloud storage for storing invoice data , uninterrupted GST Suvidha Provider (GSP) access, e-sign, GST registration and migration services.

It facilitates the entire process from inputting of purchase invoices, generation of sales invoices, managing the input credit ledger, and generating reverse charges.

Other features include
a) Vulnerability and Penetration Testing protocols to ensure complete security of users’ sensitive data
b) Dedicated help desk managed by specialised tax experts to support users on GST related queries and operational issues including tax filing returns for 24 months
c) Introductory training on day-to-day transactions and GST filing
d) This solution can also help larger organisations to enforce a regime wherein their vendors, distributors and dealers are on the GST system, complying with the process and filing their GST returns accurately. The solution can also help indicate loopholes in the ecosystem in the form of a tax credit leak at any nodal point.
“To implement GST, six million micro, small and medium enterprises (MSME) need to adapt their invoicing approaches, which is an enormous endeavour,” said KPMG India, Chairman & CEO, Arun Kumar.

GST Compliance – Register Now To Get Free Demo

Taxmann’s One Solution
“Taxmann is providing the facility to create masters of all key information in GST Module of One Solution. It would enable the taxpayers to collect all required information from parties so that GST compliant invoices can be issued from July 1 onwards,” a spokesperson from Taxmann stated.

Features of this GST module are stated below:
a) Configures formats of GST software Invoices as per your business or professional needs
b) Directly uploads the invoice from One Solution on GSTN
c) Creates GST Compliant Invoice from One Solution or import from accounting softwares or ERPs
d) Auto-calculates GSTR from purchase and sales invoices
e) Reconciles all sales and purchase invoices in single click
f) Filters unreconciled balances as per HSN, Party Name, GSTN, so on and so forth.Tally.ERP 9 Release 6 has capabilities such as:
a) Quick set up of your GST details so that your business can start without any delay
b) Support for all GST Transactions for your business
c) Easy detection and correction of errors for hassle-free tax return filing
d) Seamless export of returns to Microsoft Excel to upload returns or share with your CA or Tax PractitionerZoho Finance-Plus
Zoho’s integrated suite gives businesses an edge over competitors by enabling them to streamline their back office functions.
“The proliferation of internet connectivity and smart phones, clubbed with the introduction of GST offers businesses a great opportunity to move their accounting operations online” said Zoho Corp, Director Product Development and BD, Sivaramakrishnan Iswaran. “Zoho Finance Plus enables them to manage their daily transactions and file their GST returns from a single platform,” he adds.

SAP: SAP acts as an application service provider. GST software implementation will lead to 3-5 billion invoice uploads every month. SAP estimates that at least 40% of these will pass through a SAP-enabled system. SAP has launched ‘GST in a box’, an all-inclusive solution portfolio designed to help SMEs.



Oracle also announced the availability of Oracle Enterprise Resource Planning (ERP) Cloud in India.

A modern user interface driven by the latest design innovations delivers embedded analytics, contextual social collaboration and a device-independent mobile experience that makes Oracle ERP Cloud familiar and easy to use. “Importantly, Oracle ERP Cloud will now enable Indian firms to administer and leverage the significant GST process changes, including tax calculations, liability accounting, recovery, settlement and reporting”, said Ajay Kumar, Director, Sales Consulting ERP, Oracle India.

Oracle has the experience of rolling out GST software solutions for our ERP in many countries in the world and hence, we are fully prepared for these changes, he added.

While technology can definitely ease the cumbersome compliance requirements and facilitate an internal MIS for the enterprises, it seems a costly affair in a largely unorganized economy like India.

XaTTaX: Cloud and On-Premiss Based GST Filing Software For India

Source: ET
GST Bill: GST rolls out big tech business for Indian startups

GST Bill: GST rolls out big tech business for Indian startups

GST rollout

Startups providing technology and software for the implementation of and training on GST, and for uploading and reconciling taxes are sensing a great opportunity in the GST Suvidha Provider (GSP) scheme.

GSPs are government mandated platforms that can build their own GST return filing software on the GST Network (GSTN).

GSTN shortlisted 34 companies to be GSPs in the first phase. The criterion then was the firms must have been in existence for at least three years and must have at least a Rs 10-crore average annual turnover. For the second phase of GSP selection, GSTN has lowered the turnover required to Rs 5 crore.

Among those that have applied in this phase are startups like ClearTax, LegalRaasta, GST Star, and Moglix.

Unlike an income tax return filing, or TDS payment, GST returns are to be filed thrice a month by all kinds of businesses, thus increasing the potential customer transactions for the platforms providing GST-compliant software.

Larger enterprises have their own ERP (enterprise resource planning) solutions from the likes of SAP and Oracle. But those tend to be expensive for small and medium enterprises (SMEs). Startups will find ready clientele in this segment. GST software along with training, uploading, reconciling and other services will be a $2-billion market this year, of which the majority of the opportunity will be for startups working in this space,” said V Balakrishnan, co-founder of Exfinity Venture, an early stage funder, and former CFO of Infosys.

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Balakrishnan, who has invested in GSTStar, a Bengaluru-based GST solutions company founded by Infosys veterans Shailesh Agrawal and Balaji GS Rao, said startups providing cost-efficient solutions and who can do it for thousands of customers can become very successful.

“In the first year, SMEs will even need some handholding as they will be filing invoices for the first time ever,” he said.

Online income tax filing platform Cleartax has been working on a GST-compliant platform for a year now.It has tied up with e-commerce platforms like Amazon and Voonik, as also traditional companies across various sectors.

Archit Gupta, founder of Cleartax, which has 400 employees now, said the company has invested around $5 million on building the GST platform. “Our team has expanded twice since. We have seen a sharp increase in the demand for our software. Right now, we have 2.5 lakh businesses on our platform and aim to reach 10 lakh businesses in the next 12 months,” he said. LegalRaasta, which started as an online legal services platform, has now built a GST solution for SMEs and chartered accountants. Last month, the company raised $5 million from venture funds, mainly on the strength of the GST platform.

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“Our current GST software is a 360-degree turn from what it was before because the rules weren’t clear at all when we started,” said Himanshu Jain, founder, LegalRaasta.

The company has over 80,000 SMEs on its platform and expects to touch 5 lakh SMEs by end of this fiscal year.

Moglix is a business-to business e-commerce firm, but when founder Rahul Garg saw that the thousands of buyers and sellers on its platform needed help to be compliant with GST, he decided to work on an in-house solution for manufacturing units. “We were exposed to the complexities of the Indian taxation system and we understood the supply chain,” said Garg, whose venture is backed by Ratan Tata.

All startups deliver their solutions over the cloud, which means users need to just take a subscription and not buy the software. It also avoids the complexity of keeping IT staff to manage the software and hardware.ClearTax and LegalRaasta currently function as application solution providers (ASP) that work with GSPs to provide their software. A GSP license would help them provide their own infrastructure to the SMEs.

Balakrishnan estimates that there are a hundred startups working in the space. He said that from the second year onward, the data and open API (application programming interfaces) of GSTN will help startups to provide a plethora of financial services based on the tax payer profile.

Source: TOI