10 GST Saving Tips For Business Owners And Startups

The GST (Goods and Services Tax) was brought with the motive of staring a system of one nation one tax. The GST has completed 2 years in the nation, but there have been cases of ways being created to avoid paying GST. Who doesn’t want to save taxes? There are many ways created by individuals and business owners to avoid paying huge amount of GST to government. There have been various ways already created to save income tax but, what about GST? Here are 10 GST saving tips for business owners and startups to avoid paying huge amount of GST to government – Operate small companies – specialists of tax have said that small scale companies which are operating at 50 Crore or are below than this limit are complicated to follow. That is why; operating on small level and directing earnings to the private account can help you in saving GST. Interstate movement – business owners and startups use this trick to transfer goods from one state to other one. When the dealer in the other state receives the goods and gets the input credit on the goods received the dealer in the state who transferred the goods goes invisible. Transactions in cash – cash transactions helps in not leaving a trail behind. So, business owners and startups are starting to deal hugely in cash so they can easily avoid high GST. There are still some organisation who are in the process of execute GST. It can be assumed that the business transactions will completely be turned into electronic transactions. Appoint small tax firms – these huge accounting firms first look at the reputation of the client before considering working with them. Therefore, these organisations will have small scale chartered accountants employed for the management of their accounts. Backdate transactions – the most common method which is generally used by the business owners and startups to avoid paying high GST is back dating the transaction. The transactions are backdated to a particular day according to the convenience of seller and buyer. Billed Vs. unbilled revenue – there are several small scale entities like grocery shops and pharmacies who don’t write bill for the transactions. They only write bill for those buyers who insist on it. They use this method to veil the actual revenue earned by them. They can veil the revenue as long as they don’t deposit the cash in the back account. Trading exempted goods – there are numerous products which are kept out of GST like – agricultural equipment, products for puja, local handicraft products, khadi and earthen pots. Business owners and startups can trade in exempted goods to avoid GST. According to tax specialists, entities, specifically in southern part of India, have been found to alter the category of registration to religious products to avoid GST. Threshold exemption limit – those goods and service provider whose turnover is either 20 lakh or less than the limit are exempt from GST. There have been seen a demand of converting larger business units into smaller business unit to get the benefit of threshold limit. Altering the location of registration – underdeveloped areas in India like north- eastern area are provided the facility of tax holidays as an incentive. To boost business in that area companies are provided tax breaks. Most of the registered offices in that area are only on papers. Changing the category of product – changing the category of the product that business owners and startups manufacture help in saving GST. Government has revised the rates of 80,000 items in the nation based on the type of goods and the ingredients used in manufacturing the goods.

About Author