[DigitalOne]

Originally Posted by iamahunter

GST Verification

Guys I had an experience yesterday. Not very good neither very bad, just something to think/do about.

Me and missus had been to a restaurant for dinner. Post dinner when the bill arrived, I handed the waiter my credit card for payment. On this the waiter replied that the machine is not working and we need to pay in cash.
As it was a tiring day, wife promptly paid in cash and we left.

Today morning I found the bill in the car, that restaurant had a GST number and had charged us 18% in total. I just felt a need to validate the GST number. I tried to verify it online here, but the website never loaded. Neither is it opening at the moment. I searched and downloaded a couple of apps from the play store and put the GST in there. 2-3 apps showed me that the GST is INVALID.

So basically, I think the restaurant fooled us with a fake GST number. But I am not very confident to say that as I have not found a 100% reliable way to validate that. I am not anywhere worried about the amount that we paid the restaurant under the term "GST", as its gone now.
But this can happen to anyone and the amount can be substantial. I've learnt a lesson on a very small loss.

Is anyone here aware of a full-proof method of validating the GST number. I would like to take it as a habit to validate GST no. of the seller on every next purchase.

You can check here : https://services.gst.gov.in/services/searchtp

[Samurai]

Saw a very balanced article on Quora on GST from the company perspective. Very interesting.

https://www.quora.com/Does-everyone-...ty-2?srid=CPqD

[.sushilkumar]

Looks like it is going to haunt them for long. Shall we salaried cattle class start preparing ourselves for more Direct taxes in upcoming budget

http://www.businesstoday.in/current/...ry/260376.html

[hothatchaway]

Do not want to start trading arguments on who is right and who understands business better hence not quoting anybody directly. While it is too early to predict the long term impact of GST as businesses come to grips with, are we saying that it was ok for so called small businesses to transact in cash, so as to fly under the radar of the taxman and cheat the exchequer of legitimate revenue, all in the name of doing business? I wonder who these 'small' businessmen are who will go belly up if they are to do business honestly by paying taxes. If I were to make an example of a grocer in lets say Khan Market or INA, who discourages card payments and fudges his books and gives two hoots about paying minimum wage and benefits to the underage help he employs, let us not be under the illusion that he is leading a hand to mouth existence and will fold only because he is made to pay taxes legitimately due to him. And if we are shedding tears for such individuals, what about the entry level techie at one of our so called IT bellwethers where he has to account for every penny paid in salaries or earned as interest income, notwithstanding that wages at this level have remained stagnant for years. I don't think that there should be any debate on tax compliance; if I am employed in the formal sector and am liable to account for every penny earned, so is an entrepreneur. Bringing in arguments like corruption and ease of administration are related but not central to the tax compliance issue.

But is the GST a magic pill which will take our economy to the the next level, definitely not. I as a tax payer hope that my hard earned money goes into building better infrastructure and social schemes. I also hope that the govt understands that while better tax compliance may boost revenues, but the administration part should not keep businesses occupied.
Not all grocers/business owners/entrepreneurs are tax cheaters, but the ones who are need to focus less on cheating and more on running a competitive business.

[Samurai]

Originally Posted by hothatchaway

Do not want to start trading arguments on who is right and who understands business better hence not quoting anybody directly.

Please do it. If you run a business, you will have realistic view of the problems.

Originally Posted by hothatchaway

While it is too early to predict the long term impact of GST as businesses come to grips with, are we saying that it was ok for so called small businesses to transact in cash, so as to fly under the radar of the taxman and cheat the exchequer of legitimate revenue, all in the name of doing business?

Not saying it is ok. Just stating the reality. BTW, I am in IT and 100% of my revenue is white. Nobody pays cash for software development. So I don't have any sympathy towards tax evaders.

Originally Posted by hothatchaway

Not all grocers/business owners/entrepreneurs are tax cheaters, but the ones who are need to focus less on cheating and more on running a competitive business.

I live 50% time in a small town, where barely 10% of the shops (bigger) will offer a GST bill. But most of the smaller shops will insist on cash and will offer no bill.

Jumping onto to GST bandwagon is not easy for these guys for couple reasons. Most of their suppliers will not give invoice. Most of their customers will refuse to pay tax and will go to another shop. This used to be a problem for many shops even before GST. I do have couple vendors who don't give GST invoice, but their bills are always below 5K. But I had to change vendors whose bills are above 5K and didn't have GST. GST input credit cycle works only if every vendor/customer in the supply chain is GST registered. So it is very hard for unorganized sector to suddenly become GST compliant, because it is all or nothing.

[civic-sense]

GST was an opportunity to do away with high taxes. Any tax above 10% of the value is daylight robbery. We had high taxes because tax collections were low. But now that GST has increased compliance, the govt should reduce the tax rates to such levels where people do not see the need to evade taxes.

[DigitalOne]

Originally Posted by civic-sense

GST was an opportunity to do away with high taxes. Any tax above 10% of the value is daylight robbery. We had high taxes because tax collections were low. But now that GST has increased compliance, the govt should reduce the tax rates to such levels where people do not see the need to evade taxes.

That is going to be NDA's brahmastra before the 2019 elections .
By this time next year, they will bring down rates to 5, 14, and 24. They will get petroleum products also into GST.

[Samurai]

The restaurant GST rate has gone from 18% to 5%. Yet the menu prices have not gone down. Why?
Lot of people are not realizing the effect of denying input credit to restaurants. Let's take the situation when the GST rate was 18% and input credit was available.

Let's say the restaurant buys various services/supplies paying average GST rate of %18. This hasn't changed.
*Before*
They pay 100 + 18% for services/supplies = 118 (GST paid = 18)
They charge 150 + 18% = 177 (GST collected = 27)
They will pay further amount of 9 (27-18) after getting input credit of 18.
177 - 9 - 118 = 50 (this is their margin)
So restaurant got 50 and government got 27 (%18)

*Now* (no input credit)
They pay 100 + 18% for services/supplies = 118 (GST paid = 18) This doesn't change
They charge 168 + 5% = 176.4 (GST collected = 8.4)
They will have to handover full 8.4 since there is no input credit
176.4 - 8.4 - 118 = 50 (this is their margin)
So restaurant got 50 and government got 26.4 (17.6%)

By changing GST rate from 18% to 5%, government lost tax revenue of only 2.2% and the restaurant gained nothing.
And everybody is angry with restaurants for not passing on the benefit of GST rate moving from 18% to 5%. Effectively, it went from %18 to 17.6% only, thanks to denying input credit.
Should the restaurants really reprint their menus to pass this difference of 0.3% (0.6/177) in final price?

[DigitalOne]

Originally Posted by Samurai

And everybody is angry with restaurants for not passing on the benefit of GST rate moving from 18% to 5%. Effectively, it went from %18 to 17.6% only, thanks to denying input credit.

Should the restaurants really reprint their menus to pass this difference of 0.3% (0.6/177) in final price?

The only gain for the customer is till the time the restaurant changes the menu price from 150 to 168 :-).

[samaspire]

Originally Posted by Samurai

Should the restaurants really reprint their menus to pass this difference of 0.3% (0.6/177) in final price?

Very good example.

I run a business and I'm very ignorant on GST. So, a few queries. The questions might sound stupid, but bear with me please.

• Do I pay GST during the month I generate my bill, or on receiving payment from the client?
• Would it be better if I generated bills after the 20th of every month so that I get maximum time to collect payment and remit the tax amount?
• Since mine is a designing service, I need to bill at 18%. But I also provide printing services that I get printed from other suppliers and then re-bill with an added margin. Now should I bill for the design and printing services separately or is it ok on the same bill?
• How is input tax calculated? For the same month bills only? Or would even bills from the previous month that weren't considered, be included in this month?
• Would other purchase bills (eg. Furniture purchase for the house) be considered for input tax?
  

[Samurai]

Originally Posted by DigitalOne

The only gain for the customer is till the time the restaurant changes the menu price from 150 to 168 :-).

Lots of restaurants mention GST inclusive price on the menu, they show the breakup only in the bill. So they don't have to change the menu.

Keep in mind my example was a very crude one, where I picked numbers to keep the calculation simple.

Many people claim that restaurants mostly buy open items, that doesn't attract GST. In that case they will hardly get any input credit. So why are they complaining then? They are crying about denial of input credit because they do pay GST on many items. That is why...

Originally Posted by samaspire

I run a business and I'm very ignorant on GST. So, a few queries. The questions might sound stupid, but bear with me please.

You really need to sit down with your CA and discuss this. Are you not GST registered yet? Why are you asking these questions in November?

[sgiitk]

I have no sympathy for restaurants hiking the prices to cover the cut in GST. Only cost increase is marginal due to removal of the tax credit. So the rest is just Cock and bull.

[DigitalOne]

Originally Posted by Samurai

Many people claim that restaurants mostly buy open items, that doesn't attract GST. In that case they will hardly get any input credit. So why are they complaining then? They are crying about denial of input credit because they do pay GST on many items. That is why...

I think that is true to a large extent. Most of the inputs to a restaurant would attract nil or 5% GST. Only few branded inputs (like sauces, for example) might be attracting 12% GST. Average input GST for a restaurant must be around 7-8% , not more.
They will complain to get more from the government, as do other industries....Nothing new here.

[statix]

Got Letter of Undertaking for export without payment of IGST. It sure is a relief for exporters. Had to visit GST Seva Kendra thrice to get it!

The officials had the typical attitude of hamara kya?

[AltoLXI]

IT, ITeS companies jittery over Rs 10,000 crore tax demand.

Source

Now, according to the department, the email containing specifications is nothing but goods made available to the Indian firm to provide IT/ITES service to the foreign buyer. Therefore, it is a service. Hence, all IT/ITES exporters are liable to return the export benefits claimed for the last five years and pay service tax (15%) with interest and penalty on last five years export turnover, the department has said in its notices.

Experts fear that the service tax notices could be tip of the iceberg, as the place of supply issue could continue under GST regime that has replaces most indirect taxes including service tax. “Since the place of supply rules in such cases are the same in GST regime, many IT/ITES companies may see the demands continue in GST regime as well,” Menon said. “No Indian IT/ITES company will be competitive in the international market, if they have to pay 18% GST on exports,” he said.