How Small Retailers Will Benefit by GST

Indian retail sector is made up of organised and unorganised retail i.e. sale through traditional family or small stores or shops. The share of organised retail in India is still less than 20 per cent and majority contribution is of unorganised sector. In India The sale is still less than 7% of overall retail sector sales of e-commerce. The allover  registered tax payers under Excise, Service tax and VAT are only 83.5 lakhs and likely to increase to 2 crore in goods and services tax (GST). As we all knew that GST can have adverse reasons for some areas  in India for short-term due to tax rate impact on existing stock during transition or the tax rate post-GST scheme as compared to existing rates are  increase

Post GST, every taxpayer should put a perfect system for accounting and record keeping and there would be a minimum increase of cost to business anywhere around 5,000 to 10,000 per month. Transaction in the retail sector is done mainly through cash and we have already seen the dropdown of sales during demonetization. Post GST, there is no  significant change in sales as consumer behavior would not be changed. Unorganized retail sector would likely to participate more by coming in mainstream taxpaying system. GST on any transaction cannot be eliminated unless the complete transaction is out of GST system right from manufacturer to retailer. Because of simplicity of taxes like one tax, credit of all type of taxes even small business  men would like to contribute in India biggest tax reform. The government is also discouraging the purchase from the unregistered dealer as tax on the purchase from unregistered dealer needs to be paid by the registered dealer by way of reverse charge. Some impact on retail sector are

• Organized Sector and huge tax paper of unorganized sector can be gaining because of uniformity of tax rates all over India and opportunity of tax credit on all transactions post-GST
• Small retailers with turnover up to 50 lkahs can get benefit of this scheme where tax can be paid @1% of sales value and also leisure in maintenance of accounts and records
• The threshold limit for registration under GST for traders has been maximized to 20 lakhs from previous limit of 5 to 15 lakhs depending on the state VAT limits
• E-commerce in previously struggling with many entry taxes in various states. GST can help e-commerce to profit excessively because of the removal of entry tax and availability of Input credit for all taxes paid
• Small retailers who are selling by e-commerce bay have to create some reports  and is subject to tax collection at source @ 2% by E commerce Company so the same can be adjusted while making payment of tax liability by these small retailers
• All taxpayer need to file 3 returns on monthly basis on 10th, 15th and 20th of next month respectively which would result in some additional monthly cost. But there will be a great saving in form of input tax credit on taxes paid for various services like telephone expenses, professional expenses etc and taxes paid for the purchase of goods from other states.

It is quite evident that even retailers and small shopkeepers would like to join mainstream system provided the tax structure, policies and procedures are simplified and there is not much incentive for evasion of tax.Use ASIMOT POS GST feature to gain the benefits of the tax payments easily