GST Rollout Needs a Change in the SME Mindset Than Just Technology

It’s been converted into a law and it’s going to hit upon us come 1st April. This big It is GST. There’s no escape for small business traders who are expected to face the maximum problems while going through the transition phase. The problem lies in the Indian DNA. Most businesses lure customers into making purchases without asking for receipts thus making it a win-win proposition for both parties with the nation suffering as a result. To change this, our lawmakers had been mulling on the GST since the last decade and now it has finally been converted into law.

A problem of poor business legacy

Most small traders still don’t file their tax returns online and still maintain their records on paper, a practice that is prone to misuse and corruption. Now GST turns the tables on their heads with returns being asked to be filed online on a monthly basis. What’s more no cash or cheque based returns shall be accepted. All payments need to be made through credit/debit cards or NEFT and RTGS methods. Now most traders still don’t have a computer so imagine such a transition in tax filing could turn into a nightmare for them. Associations such as Confederation of All India Traders have taken the initiative in association with Tally Solutions to reach out to the small traders across tier 1 and tier 2 cities in India and educate them about the changes in business processes required to comply with GST regulations.

Regular updates to the GST system

A key requirement as part of GST is that most traders need to be absolutely accurate in filing their returns as any mismatch in data or product information is likely to render an input tax credit null and void and cause problems to other traders/companies in the product supply chain. Even jewellery retailers that produce their own jewellery might find it difficult to avoid paying taxes as the system shall keep an eye on their gold imports and as for regular consumption details. So, most traders shall have to develop the habit of maintaining daily ledgers as this data shall be updated on government servers in real time.

In short, the system is designed to track shipments from imports to wholesalers to local distributors and finally to retailers. There shall be great difficulty in concealing information and while accounting and tax filing software are on their way to being modified once the final announcement is made, the small business would do well to have a dekko at their current processes and begin by tying up loose ends in the right earnest!