Today I sat with a small biz owner to figure out why he wasn't earning enough from his business. Turns out he wasn't accounting for GST twice (you need to do that if you are buying and selling forward as a trader).
Calculating GST amount itself on total invoice value is a nightmare when you account for other things like figuring out HSN-wise tax rates and logistics. And then splitting into two for state and central tax.
And he's still educated but weak at math and accounts. I can only imagine how much the average business owner struggles with their own accounting. Heartbreaking stuff.
Ok. But why is GST a shit show ?
There should be a flat GST rate like other countries, for starters. That alone will reduce like 60% of problems and fast track liquidity.
Flat GST is a different debatable topic , even if done. the small biz owner who u r referring to will continue to do the same thing .
It is about educating self before doing business , GST could have its own flaws , this cannot be the reason to call it a shit show
BTW small businesses can exempt form GST provided below some threshold
Hire a CA to do all the GST. I know its an additional expense but much needed. As a small business owner, you don't need to put time paying penalties.
Bro, hiring a CA is what most people do and what the problem is. If business owners don't understand how taxation works then they end up working for break even or even losses especially when their margin is thin.
I get your point & you are right. I am not saying you don't need to understand it. That you anyways have to learn it but day to day hassle need to be left with experts so that as a business owner you can focus on your core work. Hire a part time accounts person which is also a great option.
Ain't there sw to solve such problems?
Like khatabook and cleartax etc
GST is one bit, imagine all the tax payers with no taxation knowledge. And system doesn't even help a bit
System not helping is one of the major factors yes
When you get sick you can take medicines yourself. But it's better to consult a doctor.
Same with taxes. Practicing CAs have a license. You can't become one via apprenticeship/bootcamp/college education.
While taxes and death are the only two certain things in life, it's an expense that you need to account for.
I still can’t comprehend the tax system in India. We pay almost 30-33% tax to govt n pay gst of 10-18% on every product that we buy n not to forget exercise duty on petrol/ diesel. What do we get back in return? Health insurance nope! Fr...
29M , 7 yoe. Have a full time job plus running my own freelancing gig servicing multiple clients across the world
Seems like since last year the focus of government has shifted from actually making beneficial policies to enable innovation and growth of India to just collecting taxes blindly.
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If you are an over performer and doing great work at your company, I request you to also start working for yourself. You have no idea how much you can make just working directly for clients.
