Ever since the GST system was introduced in India, it has caused ripples across the economic life of the country. The World Bank has already stated that GST system is complex and from the day that it was launched in India, there have been numerous strikes, mismatches and errors associated with this tax. The GST system in India consists of varying tax rates for various goods and services but it also has a very large number of tax slabs. The Government of India clearly envisioned GST as a solution to its long term economic problems and was ready to even go through some of the immediate issues that cropped up in the lives of the average small business owner. So let’s have a closer look at some of the problems or issues that have resulted from the implementation of GST in India.
Issues with tax slabs faced by small wholesalers
India has the highest rate of GST among all Asian countries. Globally it stands second to Chile, the country with the maximum GST rates. This has had a tremendous impact on the small wholesalers who mostly deal with the unorganized cash sector. Apart from the prices of the daily use consumer items rising up to some degree, India’s unorganized sector is also required to maintain GST compliant invoices and bills to function in post-GST scenario. Numerous food retailers are not sure as to how to implement GST on food dishes comprising different types of items. For them, the only possible means to work out a standard GST rate would be to implement varying rates of GST taxes on separate items or completely forego the concept of mixed item dishes.
Confusion regarding the process for filing the GST returns
The procedure associated with tax return filing under GST system has also become an area of confusion for small business owners. Currently, most business owners are needed to fill in the GSTR-1,2, 3 and 3-B forms that they can get from GST online portal. These forms are meant for filing a tax return for every month along with a yearly tax return. Business owners who are not sure about the process can consult a professional CA for such purposes.
Filing returns and creating invoices with GST is not easy
For most business owners, creating multiple invoices for varying types of goods having different GST rates is a rather time-consuming and tedious process. Due to this reason, most of the SMEs are badly affected by the complicated invoice maintaining system associated with GST system. The SME owners are required to manage numerous types of items that are related to different GST categories which can be a rather complex ordeal. It is due to this reason many shop owners are currently facing problems in keeping up with the GST regulations.
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