GST: Solo Expenses keeps pace with the moveable feast

By the time Diwali came around, India’s Goods and Services Tax was just three months old. And just as the Festival of Lights changes dates to suit the phases of the Moon, so the GST was changing too, and Solo Expenses expense management software was changing to keep pace with it, every step of the way …

India’s Goods and Services Tax Council has met every few days since the tax was introduced at the beginning of July.

The result of those meetings has been a flexing, adjustment, and simplification of the legislation that was itself supposed to be simpler than what it replaced. Thankfully for Solo Expenses users, our software has absorbed all the change and remains an invaluable tool for accurate record keeping to help with tax payments and receipts.

It was hardly surprising that the transition to a new tax regime applied to every transaction in every state of a nation that was home to 1.3 billion wouldn’t be smooth and straightforward, but in the run-up to Diwali at least some of the creases had been ironed out.

Many of these changes have come about because of lobbying by small businesses protesting about the challenges GST was causing for them – and as you’d expect, money was at the root of many of them. Delayed payments of tax claims and squeezing of working capital have been two issues; inability to make sure compliance was done and complications in filing returns have been two more.

Where changes have been made
It’s not possible to detail every change made to the GST rules in this one simple blog, but a number are worthy of special mention. The GST Council believes it has eased the burden of compliance. Out goes the monthly tax return, to be replaced with quarterly submissions (though the first quarter, to the end of September 2017, keeps the monthly requirement).

For exporters, there have been a number of tweaks including up front exemption for IGST on goods bought under a number of schemes – but these haven’t been applied to services.

Tax rates have changed too – on some goods. That’s a complicated picture, and businesses need to check the details of specific items that relate to them. Many of the rates have been reduced, which will be welcomed by end users. For example, many have dropped from 28% to 18% or 12%; from 12% to 5%, and some are now zero-rated. In one or two special cases a marginal rate of 0.1% has been introduced.

Some small traders were having to pay their GST in advance. That’s now changed by the Council for businesses with a turnover of up to INR1.5 crore, who now will pay on goods received rather than in advance, which is surely welcomed.

However, the tax rules are still very much ‘work in progress’, as Santosh Dalvi, Partner, Indirect Tax, KPMG in India explains: “While some relaxations announced by the GST Council are a step in the right direction, the job is not yet done. These measures are primarily aimed at the SME sector and all other taxpayers who have an annual turnover of more than INR1.5 crore will still be required to comply with stringent compliance under GST.

“Besides this, there are several other challenges which the industry is facing, especially with regard to stabilisation of technical glitches, and it is expected that the GST Council will accord due importance to these issues to help ensure that the real intended benefit of GST is enjoyed equally by the trade and the consumer. These steps, in a continuous dialogue between the government and trade, can really make GST, in a true sense, a Good and Simple Tax.”

What hasn’t changed
Amongst all of these changes, it’s important to point out what has remained the same – and much of that’s in the hands of the businesspeople who have tax to pay.

Accuracy of record keeping is paramount, which is why expense management software for small business is such an asset. Recognising that led us at Solo Expenses, before the tax’s introduction, to amend our product to make it support Indian businesspeople with the introduction of GST.

Using our expense management software when making purchases, it’s possible to apply the correct tax rate and have the tax calculation done in the background. This clearly streamlines the process, and means less time is devoted to record-keeping and more to doing profitable business.

We have arranged to have filing categories you can customise, which could mean folders for goods in each tax bracket, or for different businesses or depots – the flexibility is limited only by your needs.

And what adds even greater value to our product is that we have now made our software available in Hindi and Bengali, so it fits with Indian businesses even more closely.

Accuracy of records, in the right language, means there is no danger of too much tax being paid, or not enough being claimed back, which in turn supports company profitability – and what company doesn’t need that?