A month back after my presentation for a group of entrepreneurs about India GST, one of them asked these 2 questions. As we all know Goods and Service Tax (GST) is one of the historic game changer for the Indian Industry, Commerce and Consumer.

GST simple or complex?

I gave my answer in 2 parts. It is like making a car and using the car.

To make the car you need a Plant, design, component manufacturing, assembly, testing, delivery, dealer eco system for Sales and service, Banks and financial institutions for to provide loan, Insurance, vehicle registration etc.,

So making of GST is extremely complex. Develop a frame work, carefully classify all items, make all the states to agree (this is a huge exercise), to develop a robust IT backbone to handle the data and all Accounting & ERP vendors incorporating those changes into their software etc.,

But to drive a car, you need license and trained on steering wheel, clutch, break and accelerator. May be little bit more to know to check petrol, Oil, air pressure on tyres.

Like wise, to use GST in your Enterprise,  Get a GST registration for you enterprise, identify a GST ready ERP, migrate your present data, configure the new software, generate the transactions and file your returns on-line.


In one line “ GST making is complex and GST usage is simple”

Is GST good or bad?

In the present system there are 3 Excise duties, 3 service Tax, VAT,CST and Octroi  Many of the input taxes are allowed for offset hence increasing the cost of goods. Many of the manual filing has so much of manual work to feed the data and check for errors, send notices to ask for re-filings etc.,

The proposed GST system is so simple.

  1. 5 slabs of taxes 0,5,12,18,28.
  2. Local sale will have both State (SGST) and central tax (CGST)
  3. Interstate and Imports will be (CGST)
  4. Returns filing. On 10th for Sales, 15th for Purchase and on 20th Returns are filed on-line.

Since movements of goods are tracked electronically at all stages till the good or service is reached the end consumer the tax base will improve and un accounted cash generation will get reduced thus will improve the tax collection.

Since all input GST is allowed for offset the cascading effect is reduced, hence the cost of goods and services will come down.

In one line  “GST is good  for the Enterprise, consumer and for the country”.

But as GST insists Item wise data for all transactions, the below article will be useful to know the transaction discipline required for the GST compliance.

After GST,Auditing will be tough with Accounting Software


Author Vijay

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