The recent changes in the economy and GST have been nothing short of drastic. The major, sweeping changes were kickstarted by the demonetisation move. Now, with the mandatory Goods and Services Tax that applies on everything we avail and sell, businesses are finding many changes in the way their businesses are now running.
I think the first and most obvious change of the GST application is that all business are now having to file this tax on a monthly basis. Simply put, this means that every sale one makes or invoice one raises needs to be topped off with the tax amount which is applicable to your niche. Find your niche and how much GST you need to charge right here!
So far so good. I have to charge all my clients the GST in my invoices. I go ahead and give the amount as well as the invoices to my CA at the end of the month, so that the same may be filed. I can see CAs around the country rejoicing happily. But this is where the plot thickens in the GST story.
I took to the main market area of my city a few days ago, in search of an outfit for the impending Dandiya night. I walked into a boutique – a designer one. After the mandatory trying on and looking left – looking right in the mirror, I zeroed in on the outfit of my choice. Which took me to the next logical place to conclude the transaction – the counter. Here, I was told that I needed to pay by cash only. When I looked puzzled, the young designer at this boutique looked almost contrite and mumbled something about not having ordered a card swiping machine yet. Funny, I thought – a designer boutique that has been around for a while and does not have a card swiping machine.
Anyhow, I carried on and walked into a small phone repair store where I gave them my phone. Again, at the end of it, I was asked for cash. This time, I had to rush around in the hot sun for over an hour to find an ATM. When I went back huffing and puffing, I asked the shop owner why he did not accept cards because he had a machine right there, partially hidden under the counter. He simply said, “GST, madam – what to do.”
So here we are, as usual, ducking the law and trying to find a way around it. Because what kind of GST are you going to charge when you carry out a minor repair for 200 INR? I would certainly be a little taken aback if that small an amount would be subject to taxation – although, I am sure I would not think twice to pay it. After all, taxes are meant to help the citizens and I should pay up because my clients would definitely pay me the same. Right? Wrong!
A client called me a few days later about a book editing project. After the jovial hellos and how are you’s, we got right down to business. When I presented the quote for the project, she was very happy. But when I added the GST, trouble broke and suddenly the air was tense. She laughed and asked, “what is this GST business in book editing? I will pay you what you have quoted – not all this GST and all.”
I was slightly aghast here. This well educated person was basically telling me that she was not ready to pay taxes. I casually informed her that this amount would not be going into my pocket – it would be going straight to the Government. I even showed her my GST registration document and informed her that since I was accepting payments into a current account that bore the name of my small media and publishing startup, I was supposed to charge this amount. At this point, my associate jumped in and asked if they could maybe route the payment through an international payment portal like PayPal as international payments are exempt from GST. I remained quiet. And I also lost the project. Just like that.
So that is my GST story. I wonder if this is what the Government had in mind when they put this law in place. Most of the agencies are paying the same – but many other direct clients are acting like they are entitled to be exempt from this amount. As a result, most businesses are finding ways of running a cash only front. Doesn’t sound quite right, does it?