It has been a little over two weeks since the Goods and Services Tax or GST was implemented in India and the GST Council is set to meet on Monday to take stock of the situation of the new tax regime. This will be the first meeting of the GST Council since the new regime was implemented and 19th since it was setup in September last year. At the last Council meeting on June 30 it was decided that the next meeting will happen on August 5 but it has been preponed as the Council wanted to get a nation-wide report on the rollout. However, a lot of people are still not clear about how GST works and there are a lot of myths that are doing the rounds. In this article, we bust some common GST myths:
Myth 1: GST rate is higher than VAT
Truth – Under GST, you do not have to pay higher rates. The only change is that excise duty and other taxes which were earlier invisible are now subsumed in GST. So, these rates are now visible and thus, it appears that you have to pay more under GST than VAT which isn’t the case.
Myth 2: Paying tax 2 times if transaction is done by credit card
Truth – This was the biggest myth around GST until Financial Services Secretary Hasmukh Adhia came out and revealed on Twitter that it is completely untrue. You have to pay tax once under GST irrespective of the fact whether the payment is made through cash or cards.
Myth 3: Invoices should be generated online only
Truth – A lot of people think that after the implementation of GST, they will need the internet for generating invoices, running the business etc. Again, this isn’t true. Invoices can be generated manually too and you will only need the internet to file the monthly return of GST.
Myth 4: You need to make three returns per month
Truth – Another very common misconception about GST is that you have to fill the returns thrice. Instead, it is just one return that has to be paid in three different parts. Out of this, the first part is filed by the dealer and two other parts are auto-populated by computer.
Myth 5: You need final ID to do business
Truth – Many traders who had a provisional ID were left waiting for a final ID to do business. However, what they were not aware of the fact that the provisional ID is your GSTIN and can be used to do business.