With the introduction of the Goods and Service Tax (GST), business is facing confusions. The Indian businesses are still unaware of how to deal in with things. What all rates are applicable on goods and services are still unknown. People are strange to how taxing system changed pre and post GST.
The introduction of GST was one of the biggest tax reform that occurred after the independence. The GST was put into practice on July 1, 2017. The new tax combined more than a dozen other taxes into a single tax. Apart from the intended streamlined taxing system, many small businesses and traders struggle with the new taxing system. Printed and software generated invoices were replaced by hand written bills.
People found it tough to understand GST. Business people in remote areas and small shopkeepers are still unaware of the new tax system. Traders and small business owners in small towns are still struggling with business. This is because of their lack of knowledge about the new tax regime. People are also unaware of the raising invoices, compliance obligations, and accessing input credits. Some of the companies have also ordered goods in advanced and still are using the old stacks they have.
Additionally, around two dozen states of the 29 had to abolish check points at their borders at the time of GST introduction. This had to be done to control the delay in delivery that was occurring at the state borders. This also reduced the transportation of illegal goods as companies could not provide GST compliant products.
E-commerce business also faced some complexities with this new taxing system. Some small merchants and businesses were unable to quickly resume and change their business activities with the E-commerce platforms with a rapid shift in the documentation and policies that GST brought about. Some of them even stopped selling goods on the e-commerce sites as they were unable to meet the changing requirements and compliance.
Prices of certain products are varying with locations. This is because of the reason that certain traders have not yet implemented the new taxing system into their business operations. Even movie tickets prices experienced a rise in some of the states while other remained unaffected.
The Bottom Line
As an attempt to reduce this confusion, the government took some initiatives to aware the public and business houses about the new tax regime. One of them was the ‘master classes’ and some newspaper advertisements that showed the revised prices along with old prices of goods and services.