Solo Expenses is ready for India’s new GST. Are you?
India is poised at the dawn of a new tax system. Everything you buy on or after July 1st will be subject to a new Goods and Services Tax. Its arrival will be a headache for many, but the Solo Expenses money management app is ready to help – we’ve revised our app to help you do the calculations right out of the box.
Even for those who understand how it works, India’s new Goods and Services Tax is hard to understand. Administering it for those in business is going to be hard, especially in the early months until it settles down.
Part of the battle will be preparedness – to start thinking about how your business will respond when July 1st gets here will be too late.
At Solo Expenses, we have already done our thinking, and turned that into action – by revising our smartphone expense manager app so that it can do GST calculations for you.
Goods and Services sold in India on or after July 1st will be subject to GST at one of five rates- 0%, 5%, 12%, 18% and 28%.
Nearly 81 per cent of the items will fall under below-18 percent GST rate slabs and only 19 per cent of the goods will be taxed above 18 percent.
The most essential goods such as milk, curd, natural honey, fresh fruits and vegetables, flour, bread, salt, and many more services like Hotels and lodges with tariffs below ? 1,000. Grandfathering service has been exempted under GST which attracts nil rate of GST under Exempted Categories. Moving up to the 5%, 12%, 18% and 28% rates, the lists are much longer, but everything imaginable is there, from a cashew nut to a cell phone and from a pack of ghee to a lifeboat. SGST is State GST, and is collected by the State Government. CGST is Central GST, collected by the Central Government, and IGST is Integrated GST, collected by the Central Government.
How Solo Expenses helps with GST
What we’ve done to make our expense manager app GST-friendly is to provide a platform to setup and map the GST rates to the Expense Categories, so every time you spend anything the app will do the tax calculation in the background, so you don’t have to. What’s more, all of the data can be compiled into reports, making the accounting process much less fraught and open to error.
Preparing for GST
Like any major change or problem in life the way to deal with it is in bite-sized pieces, and technology is an important part of that. As Atul Gupta and Punita Bhuchar of Deloitte Haskins and Sells LLP wrote in The Economic Times Small Biz section, revamping technology is important. They wrote: “Information Technology systems configuration and adaptability to the GST law is need of the hour. Appropriate dashboards and work flows could significantly reduce the commotion.”
Taking their advice on board, we’d suggest the first step should therefore be to download Solo Expenses. You can do that here.
The next step might be to set up new categories in our app (that’s another recent upgrade to our software, the ability to make new categories, suspend or delete them. It’s all about being as flexible as we can to help you as much as we can). How about ones for each GST bracket, which would categorise spending by tax, and make the accounting process simpler?
Make sure you have accurately-dated invoices, which will allow you to know which transactions were before GST, and which after it. Who would want to pay too much tax?
Work out also about goods in transit, and the tax burden they may or may not carry.
Remember; delays can be expensive, and can result in you paying too much tax.
Two thoughts to finish with
First: We’ve always said Solo Expenses paid for itself in the time and effort saved through its use for expense management. That will become even more true after July 1st, because although we haven’t increased our (very modest) prices, it’s a fair bet that the time you spend working out tax liabilities will go up. Rest assured that Solo Expenses can help to keep the increase to an absolute minimum.
Second: There was never a way we could explain the whole GST story in just one blog. There is a great deal of helpful information out there, and here is a very good place to start.