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NotMyRealName
Err, i'm pretty sure i've seen round manholes back in the 80s. Guess they were probably british built. As someone said, the rest of the world is moving forward, India is going backwards...
GST and its impact on YOU!
- Thread starter swatkats
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I am yet to see a restaurant that reduced menu prices after GST, infact many of them who earlier offered all inclusive menu are now charging GST on top of earlier prices. GST provided them a cool way to earn more profits.
When they started charging GST they passed it as if it is a new extra tax burden on consumer and they pocketed all the input tax credit benefits.
I don't see any reason why you would expect prices to decrease. Many restaurants were not paying service tax earlier. If they didn't show breakup and charged a fixed amount. it means they were most likely not paying taxes. Post GST, they will obviously add the tax on top of the price. Also smaller restaurants don't usually have supply chain that is GST compliant and won't get input tax credits. It is feasible only for the larger restaurants using suppliers that are tax compliant. Those ones anyway changed service taxes earlier which are replaced by GST now. Now with the new rules, if the bigger restaurants are also not going to get input tax credits, they will have to increase prices to adjust for that.
@Lord Nemesis What I infer is that earlier restaurants were showing ST in the bill, which was being pocketed by the owner, maybe. Now with GST, they are properly charging the same (or maybe not?), and on top of what ST was being charged....
How can a restaurant not pay service tax AND vat earlier.? Not showing breakup in bill doesn't means they were not paying it, I hope you knw that.
What you said is exactly the excuse and misinformation being spread by those restaurants.
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NotMyRealName
Cash.
And even when not paid in cash, restaurants, like most indian small to medium businesses have ways of obfuscating their returns.
I would like to add to @Lord Nemesis statements that i feel, post-gst, the biggest restaurants are the fairest. Earlier they charged, for example, 12%, and now they replaced it with 18%. So a straightforward 6% hike for the customer. But the smaller crooked ones would earlier not declare all their earnings AND not charge any additional taxes from the customers. They would only pay a small fraction on their declared incomes. Now they are straightforward ripping off the customer a whopping additional 18% and still probably not declaring everything. Yes it's possible today too, i know of various businesses doing so.
Those doing business in cash without bill will not charge gst as well. And Replacing 12% with 18% is not fair. After factoring input credit net impact will be lesser than 6%.
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NotMyRealName
None of what is going on for the past couple years is fair. The govt. keeps coming up with all sorts of half-arsed schemes which are just waiting to be loopholed and exploited to the detriment of the common man.
I once got a restaurant bill on a takeaway (i went there, not delivered) handwritten with 9%+9% gst.
I once got a restaurant bill on a takeaway (i went there, not delivered) handwritten with 9%+9% gst.
If you don't have break up in the bill, it means they are not paying the taxes. Showing the break up is not an optional thing. For compliance, bill has to be issued and it show the the proper break up of base cost and taxes and tax registration numbers are also mentioned. The duplicate of the bill has to be kept by the business as documentation. This was totally possible earlier when you are dealing in cash with the customers as well the supply chain.
Post GST, tax compliance became more rigorous by imposing taxation at every step and a mutual policing mechanism in which you might suffer the brunt of the taxes if you let somebody else in your chain get away with tax evasion. Suppliers who were able to operate outside the tax radar suddenly have to become tax compliant in order to pass the tax burden to the next link in the chain.
Do remember that all indirect taxes are meant to be passed on to the end consumer. If a somebody in the chain does not have GST compliance, they would have to bear the taxes themselves and have to pass the cost to the customer separately. This forced many businesses to become tax complaint. Although there are many that still aren't, it is only possible if their entire supply chain is off the radar and deal completely in cash or they find alternative means to pass on the tax burden like increasing the costs.
A cafeteria business near our office is not fully tax complaint. They sell at flat rates without tax break up in the bill. However post GST, they have to pay the the taxes on the goods purchased form their suppliers since their suppliers had to become tax compliant. In order to pass of the burden of taxes that they were paying on the supplies, they had to increase their flat rates even if they are not tax compliant. In fact, when some tax slabs changes were done, they even reduced the prices again since their tax burden decreased.
Another cafeteria offered 15% discount on the price if you pay by cash as compared to card. For example if an item costs Rs 120 inclusive of GST, they were offering it at 15% discount i.e. Rs 102 if pay in cash.
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Here is an illustration of how GST and Input Tax credit works.
https://cleartax.in/s/gst-input-tax-credit
Assuming the tax applicable on final bill of a business is Rs 450 on a base price of Rs 2500 and they is also paying taxes when they purchase supplies from A,B & C which amount to Rs 300.
1. Assume they are GST complaint, he collects Rs 450 from customer. He has already paid Rs 300 when he purchased supplies from A, B &C, So he shows Rs 300 as the ITC and pays the balance Rs 150. So all the taxes have been correctly passed on to customer.
2. Assume they are not tax compliant. He still paid Rs 300 in taxes to A, B & C which they need to pass on to the customer as increase cost of the product. So they will have to sell it at Rs 2800 even if they are not tax compliant.
3. Assume that govt decreases tax on product to Rs 300, but also removes ITC option. (as is being proposed for restaurants). The business is allowed to collect Rs 300 from the customer. But behind the scenes, they are paying Rs 300 as taxes to A,B & C and another Rs 300 as tax on the final product making the total tax burden Rs 600 and leaving a deficit of Rs 300.
In other to cover that deficit, the business will have to increase the base cost of the product from Rs 2500 to 2800. So instead of Rs 2500 + 18% GST = 2950/-, the user will have see a price of 2800 + 12% GST = 3136/-. They pay Rs 336 as their own tax and another 300 has been paid to their supplier which leaves them with the same Rs 2500. on the other hand, govt gets Rs 636/- as taxes instead of Rs 450.
https://cleartax.in/s/gst-input-tax-credit
Assuming the tax applicable on final bill of a business is Rs 450 on a base price of Rs 2500 and they is also paying taxes when they purchase supplies from A,B & C which amount to Rs 300.
1. Assume they are GST complaint, he collects Rs 450 from customer. He has already paid Rs 300 when he purchased supplies from A, B &C, So he shows Rs 300 as the ITC and pays the balance Rs 150. So all the taxes have been correctly passed on to customer.
2. Assume they are not tax compliant. He still paid Rs 300 in taxes to A, B & C which they need to pass on to the customer as increase cost of the product. So they will have to sell it at Rs 2800 even if they are not tax compliant.
3. Assume that govt decreases tax on product to Rs 300, but also removes ITC option. (as is being proposed for restaurants). The business is allowed to collect Rs 300 from the customer. But behind the scenes, they are paying Rs 300 as taxes to A,B & C and another Rs 300 as tax on the final product making the total tax burden Rs 600 and leaving a deficit of Rs 300.
In other to cover that deficit, the business will have to increase the base cost of the product from Rs 2500 to 2800. So instead of Rs 2500 + 18% GST = 2950/-, the user will have see a price of 2800 + 12% GST = 3136/-. They pay Rs 336 as their own tax and another 300 has been paid to their supplier which leaves them with the same Rs 2500. on the other hand, govt gets Rs 636/- as taxes instead of Rs 450.
Wow, if that's what you believe I have nothing more to say. I surrender.
I think he means you should assume it that way. With GST, if you get a bill which has no GST number on it, it should be considered that way.
You should surrender. There are no assumptions here. Not maintaining the bills with taxes and registration numbers, then you are not tax complaint and even if you pay any amount to govt it won't matter without such records as proof and they don't if and what amount you are evading.
There is a reason why such a template is used for issuing bills. It is required by the law. Post GST, a similar invoice format is required.
Here is details of what the GST compliant invoice should contain.
https://cleartax.in/s/gst-invoice
- Invoice number and date
- Customer name
- Shipping and billing address
- Customer and taxpayer’s GSTIN (if registered)**
- Place of supply
- HSN code/ SAC code
- Item details i.e. description, quantity (number), unit (metre, kg etc.), total value
- Taxable value and discounts
- Rate and amount of taxes i.e. CGST/ SGST/ IGST
- Whether GST is payable on reverse charge basis
- Signature of the supplier
i. name and address of the recipient,
ii. address of delivery,
iii. state name and state code
Look at the headache the GST filing is: Decoding GST forms
No wonder tax people are feeling it hard to fill this complicated mess.
No wonder tax people are feeling it hard to fill this complicated mess.
Party Monger
Juggernaut
As someone who fills 20 of these each month, its a draconian & very badly thought out process. It seems like something a ....chai wala would make
That article doesnt even list out even 10% of the issues.GSTR 1- Have to input ALL the invoices with CORRECT details, including GST numbers. There is no mechanism to bulk check GST numbers. So each return takes 3-10 days depending on how responsive other other guy is. Incase you have a wrong gst number and no way to reach out, there's no way to tackle this situation.
If you have a bill with 2 - 5%, 5- 12% and 6- 18% items. The entry in the return for this single bill is-
Total bill amount, bill number , Taxable value, Taxrate, tax
Total bill amount, bill number , 2 - 5% items taxable value total, 5% Taxrate, tax
Total bill amount, bill number , 5- 12% items Taxable value total , 5% Taxrate, tax
Total bill amount, bill number ,6- 18% items Taxable value total, 5% Taxrate, tax
This is JUST ONE bill. Imagine hundreds.
Until last update, their utility, only exported the highest rate item in the bill. In the above case only the 18% item would be exported for upload, rest all details were missed. Who would be responsible for that?
Non-filing of this return has a penalty of 200Rs per day. And its been closed (forcibly ) for 60 days till GSTR2 period isnt over. So 60 * 200 = 12000 penalty for no reason.
GSTR2-
Each of the above from your suppliers gets populated in your GSTR2.
So you have to MATCH EACH of your purchase invoice. There can be hundreds of errors and no way to re-concile them. Lakhs of tax credit depends on these.
To tell you how unprepared these idiots were - The launched the offline utility for this, on October 29.
The original due date for this return was 15th August.You also have to pay tax IN CASH when you purchase from unregistered suppliers or use any transporter. Insanity
GSTR3-
Dont know what fresh hell this will bring.
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Not to mention that there are a minimum of 37 filings to be done in a year and that is the minimum. This is the so called simplification of indirect taxation.
Be it GST, Demonetization or Aadhar usage, none of them are bad conceptually. It is the implementation and the intent/motives with which the present govt is doing it that is concerning.
GST for instance was meant to ease indirect taxation and widen the tax base just by being a policy that is simple and practical and avoiding loop holes. Instead it was made into a complex mess and a tool just for increasing tax revenues. No sector that attracted more than 28% tax was brought under the GST. We still have to pay 160% tax on petrol.
Be it GST, Demonetization or Aadhar usage, none of them are bad conceptually. It is the implementation and the intent/motives with which the present govt is doing it that is concerning.
GST for instance was meant to ease indirect taxation and widen the tax base just by being a policy that is simple and practical and avoiding loop holes. Instead it was made into a complex mess and a tool just for increasing tax revenues. No sector that attracted more than 28% tax was brought under the GST. We still have to pay 160% tax on petrol.
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Party Monger
Juggernaut
You're Wrong buddy
A summary of the returns under GST -
Monthly Summary returns- 12 (GSTR 3B)
Monthly returns = 3* 12 = 36 (GSTR 1, 2, 3)
Yearly return = 1
Audit reporting = 1
Transitional
Stock report - Tran 1- 1
Usage of stock credit over max 6 months - Tran 2 - 6 returns
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Total - 57 returns.
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In our free time, we do business. Rest of the time we fullfill compliance requirements under GST. Remember all this compliance cost the businessman wont pay out of his pocket. He will pass this on to you aka end consumer too. The biggest bluff this govt played was to convince people that GST is somehow better for them. Its only good for Govt and the department so they can harass businessmen more.
They are harassing everyone now. It's just a temporary money grab scheme. They bought down GST on 150+ items. They won't give back the tax collected on these items. Plus in the end even if all the people in the chain pay or do not pay tax, the end user - the customer will bear the entire burden of the tax. Where will the already overworked customers go to claim tax relief if possible? In one move the scheming FM has put entire burden on the lay man. And all the dumb people including the govt is praising it.
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