Who needs to register for GST in India? 

GST registration may sound like a lot of work. But did you know it is not mandatory for all? Here are the situations that require GST registration:

• If your business’s turnover exceeds Rs. 20 lakhs in a financial year for normal category states. For individuals living in special category states, the limit is Rs.10 lakhs.
• You receive payment for services under OIDAR (Online Information and Database Access and Retrieval). OIDAR includes activities, such as internet advertising, cloud-based services, and intangible items, such as e-books, entertainment (music, movies, online gaming), software, and any other electronic data, such as video lessons.

Why is GST for freelancers important? What are its advantages?

Because the Goods and Services Tax (GST) is an indirect tax on the supply of goods and services in India, Indian freelancers must also pay GST when their turnover exceeds Rs. 20 lakhs in a financial year. 

As freelancers, you do not receive any specific advantages of registering for GST. The benefits of GST registration are the same for everyone. Under this new GST regime, you have the option to file tax returns online. All you have to do now is go to the GST Portal, create an account, log in, and begin filing your GST returns.

The main advantage is that if you register, you will be able to claim GST credit, which may be used to balance future GST liabilities, as well as seek a GST refund (subject to certain conditions). For example, if your firm runs ads on Google to attract new clients or customers, you have to pay 18% of the total amount as GST.

Documents needed for GST registration 

Here are the documents you will require to register for GST:

1. Your photo
2. A copy of your PAN and Aadhaar card
3. Identification and residence evidence
4. A recent bank account statement or a cancelled check
5. Your digital signature
6. Electricity or telephone bill
7. Office lease agreement
8. No objection certificate

What happens after GST registration?

After you have submitted all the documents required and completed all the required formalities, you need to ensure that you follow the process to be on the right side of the law. 

When raising an invoice, you need to add the GST amount to the overall billed amount. Thus, if your billed amount is Rs. 25,000 for one client, after adding GST at the rate of 18%, the total amount that your client needs to pay will be Rs. 29,500. 

After collecting GST, you need to deposit the GST amount to the government when you file your GST returns.  

Payments T&C for freelancers

There are many terms and conditions (T&C) related to payments that apply to GST-registered freelancers.

• Depending on the type of service you provide, GST rates on your services can be 0%, 5%, 12%, 18%, or 28%. If there is no specific percentage, you need to charge your clients GST at the rate of 18%.
• After getting your GST identification number, you have to file GST regularly, i.e., monthly and yearly. This is irrespective of your current annual turnover.
• You need to make all payments online. Every year, there will be 37 returns to file: three monthly filings and one annual form.
• If you do not deposit the GST proceeds on time, you might have to pay a fine.
• To ensure that GST is deposited on time, you can issue the invoice on the 1st of the following month. This will give you enough time to pay your monthly GST bill.
• After paying all the applicable taxes, you need to submit a monthly summary return under GSTR 3B.

Do freelancers need to register for GST if they raise invoices?

• If you are a freelancer, your clients will expect you to raise invoices. When you submit an invoice, your client may deduct 10% TDS from every invoice.
• If your income is below Rs. 20 lakhs or Rs. 10 lakhs (for special category states), it is not compulsory to register for GST even if you raise invoices.
• GST-registered freelancers need to file invoices according to the latest GST laws stated by the government.
• You need to include your name, address, GSTIN for freelancers, your client’s GSTIN, Service Accounting Codes (SAC), date, amount, and signature on the invoice.

To sum it up

As all your accounts are linked with PAN and Aadhaar, the best option would be to go for GST registration.GST filing may be a little intimidating for many freelancers. Hiring a chartered accountant (CA) who has experience working with freelancers and solopreneurs will help you ensure everything is in line with the latest applicable laws.

Also read: GST Registration Guide for Startups and Small Businesses

The post GST For Freelancers: Everything You Need to Know appeared first on PayU Blog.

What do you mean by GST?

GST, also known as Goods and Service tax, is an indirect tax. It was imposed by the Government of India on the national supply of services and goods. GST has replaced many indirect taxes in India, namely, VAT, Service tax, excise tax, etc. The goods and service tax is applicable throughout India.

Types of GST In India

GST is divided into four different types. They are listed below: 

• The Central Goods and Services Tax: CGST is the tax levied by the Central Government on goods and services transactions within the state.  
• The State Goods and Services Tax: SGST is the tax levied in every state by the state government on the interstate supply of goods and services 
• The Union Territory Goods and Services Tax or UTGST: UTGST is the tax levied by the Union Territory Government on the transaction of goods and services in the Union Territory.
• The Integrated Goods and Services Tax or IGST: IGST is the tax levied on interstate goods and services transactions and applies to export and import. The Central and State governments share the taxes under IGST. 

GST rates in India

The GST rates for essential items are low and high for luxury items. Goods and service rate slabs include different items according to set parameters.

GST Calculator: What is it?

Several GST calculators available online can help you calculate GST without much trouble. A GST calculator is an easy-to-use online tool that calculates the amount of GST that must be paid for a particular month or quarter, depending on the amount. It is used by various users, including wholesalers, manufacturers, etc.

The formula for calculating GST

How To Calculate GST Online using GST Calculator?

There are many websites available online that offer GST calculators to help customers. These sites can be accessed from any computer and assist you in calculating your GST amount.

To calculate GST online using a GST calculator, follow the steps given below:

• Visit a website that offers a GST calculator.
• Now, select either GST inclusive or GST exclusive option depending on your requirements.
• The next step is to add the quantity of the purchased product.
• Afterwards, select the GST rate that applies to your product.
• Now, click on calculate, and you’ll get the final amount.

Benefits Of Using A GST Calculator Tool

Following are the benefits of using a GST calculator

• GST calculator reduces the chances of calculation errors and saves time.
• It helps to determine gross or net product prices based on percentage GST rates. 
• A GST calculator also assists in the computation of Integrated Goods and Services Tax.

Conclusion

Calculating GST has become easier because of GST calculators. Now, individuals and businesses can calculate it independently without much trouble.

FAQs

The post Tax Calculation Made Easy By GST Calculator In India appeared first on PayU Blog.

Table of contents

What is goods and services tax (GST)?

It is a tax reform that came into existence on 29th March 2017 by an act of parliament and has replaced many indirect taxes such as VAT, excise, service tax, etc.

A comprehensive destination-based tax, GST is levied on the supply of goods and services at every point of sale. For example, you are a wholesale merchant and sell goods to Mr X, a retailer, who further sells it to Mr Y, the consumer. At first, the tax is levied on the purchase made by Mr X from you. Then, the tax is further levied on the purchase made by Mr Y from Mr X.

A unique number called GST registration number is allotted to every business registered under GST.

Types of GST

In India, there is a dual GST system in which the central and state governments levy taxes simultaneously with a common tax slab. However, GST is mainly categorized in three simpler terms:

State Goods and Services Tax (SGST) – taxes levied by the state government or union territory (UT) on goods and services manufactured or sold within state or UT boundaries.

Central Goods and Services Tax (CGST) – taxes levied by the central government on any intra-state transactions for goods or services.

Integrated Goods and Services Tax (IGST) – taxes levied by the central government when a transaction of goods or services takes place within two different states. The state and central government share the tax levied equally.

Advantages of GST registration for startups and small businesses

GST for small business and startup provides these advantages:

• If you file your return under GSTR-1 and GSTR-3B, no late fee will be charged as per the 31^st GST council’s declaration to boost Startups and SMBs.
• Starting a business in India is now a lot easier. SMBs and startups can go ahead with only GST registration. Earlier, the process was a bit complex.
• Simplified indirect tax system to one uniform system. Ever since GST came into existence, a lot of indirect and direct taxes have been subsumed such as excise, VAT, etc. This has made the tedious process of filing and managing taxes much simpler.
• Easy compliance and requirements
• Paperwork efficiency and ease of logistics towards dense locations of client

Exemptions under GST for startups and small businesses

There are no complex criteria for eligibility for GST registration. In fact, businesses with a turnover of under Rs. 40 lakhs per year don’t need to register under GST. As a result of this exemption, many startups and small businesses that fall under the category of Rs. 5 lakh – Rs.40 lakh income can grow without having to worry about filing GST returns.

How to register a startup or small business under GST

Wondering how to register a small business in India? It’s quite simple to register your business under GST online. There are a few GST registration requirements. Just follow the steps given below:

• Go to the GST portal at https://www.gst.gov.in/. Click on ‘Services’ and then select ‘New Registration’ under ‘Registration’.

• Generate a temporary reference number (TRN) by filling in the details given below such as PAN, email ID, and mobile number, and click on Proceed.

• Enter the OTP received on the given mobile number or email ID and validate it. 

• Once you validate your number, a TRN will be allotted. Use it to log in again to complete the GST registration process and requirements. 

• Login to the portal using the TRN, enter the captcha and complete OTP verification. Click on the pencil icon below ‘Action’. 

• Enter all the information about your business such as trade name and composition scheme. Click on ‘Save & Continue’. 

• On the next screen, provide information about all the promoters and directors of your business. Or you may enter the details of the proprietor in case of proprietorship. You can enter the details of up to 10 promoters or partners on the portal. Then, click on ‘Save & Continue’. 

• Enter the details of the authorized signatory nominated by the promoters to file GST returns of the business. 

• Submit the details of the principal place of your business such as an address, official contact details (email, phone no., etc.), nature of possession and others. Upload relevant proofs of the same and click on Save & Continue. 

• Enter additional place of business details. For example, if you have an eCommerce business and use Amazon’s warehouse then the details of the warehouse must be given in this section.  

• Provide the details of the top five goods and services you supply. Fill in the HSN code for goods and SAC code for services. 

• Verify the details submitted. Once it’s completed, select the verification check box and e-verify the name of the authorized signatory. 

• After the signature verification, a success message will appear on the screen, and an Application Reference Number (ARN) will be generated. Use it to track the status of your application. Once the process is complete, you will be informed about the allotment of a GST number. 

Conclusion

GST registration process for startups and small businesses is much simpler now. Just as a startup becomes successful when the idea behind it is properly executed likewise if GST is implemented properly, it helps a lot in achieving the financial goals easily.

The post GST Registration for Startups and Small Businesses in India | A Quick Guide appeared first on PayU Blog.

“I’m convinced that about half of what separates successful entrepreneurs from the non-successful ones is pure perseverance.” – Steve Jobs, Co-founder, Apple Inc. Starting a small business or aiming for something big. Successful businesses have nothing to do with the size or platform of your business. It is only concerned with the correct blend of true marketing facts, creative & achievable ideas along with strong vigor! 

With O2O (offline to online) skyrocketing at an unbelievable pace, the competition has reached its peak. Amidst all this competitive wave how can you stand out? Let’s understand this with the help of an example: You are looking forward to starting your own business online, an e-commerce fashion accessories website.  

Step 1: Find the Need 

Maybe you have already planned your business, product, and other details but did you consider what your audiences are looking for? It is a myth that you know your audience. Many times what they want and what you provide is absolutely opposite.  

Spot the market need bang on! That’s what Apple did when it first launched iPod. People wanted to listen to music and Sony’s Walkman was in absolute demand. Apple recognized this need for music and hence launched and far more furnished and quality product.  Here’s the question: How to find that one need? Since your planning launch an online site, make the best use of online tools like  

• Social Media Polls: Facebook has an amazing inbuilt tool for marketers to win the majority via polls. You can put up your question in a poll format on your wall or some business related page.

• Email Surveys: People do read emails! As per Smart Insights, the open rate of e-commerce emails is 16.75%. Conduct your product survey via emails and MailChimp will guide you with clear insights for your campaign.

• Search Engine Optimization (SEO): Login into Google Keywords and get accurate ideas for your search. For example, if you search E-Commerce, carefully note down all the searches that pop up.

Step 2: Review Your Product 

 If you think the results from Step 1 match is in line with your business ideas, then go ahead. But if in case the audiences have different needs, it is recommended to look into their needs first than trying to push and sell your ideas. Give importance to your audience and the chances of your business increasing exponentially are really high.  

 Step 3: Plan Effectively 

After completing steps 1 & 2, setting your product and/or marketing plan shouldn’t be that painful. Engineering your product (your website, products on display, etc.) in such a way that it is easy to use by all is important. 

Creating an effective communications plan is essential too. Which communication channels you are going to use to reach out to your target audience? What are you going to communicate? And many more questions need to be effectively asked, answered and hence planned. Some of the key ‘must-to-be-included’ words or terms you can consider: 

• Blogs 
• Social Media 
• Website 
• Emails 
• Online games 
• Mobiles phones 
• Forums 
• Video 
• Messaging 

Step 4: Funding your Startup 

Now its time to pitch your intellectual property! This is one of the major steps for your online business because your development, either on the product or the marketing front will be reliable on the funds you are able to bundle. Before you start calculating your existing or ‘I-need-this-much’ funds,  know the different types of funding or investment:   

• Bootstrapping or Self-funding: As a founder of your e-commerce website equip it with most of what you have in your pockets if not all. Bootstrapping is the key to kickstart your venture journey. It is considered to be the most effective and inexpensive way to ensure your business’ positive cash flow.  

• Friends & Family: Here, you go and reach out to your inner circle of people for investing in your idea/online business. However, it is not advisable to not have too many people in your investors’ panel initially. Reliability is the key here.  

• Seed Funding/Seed Capital: This is the initial stage of raising funds or investments from outside. Seed funding can be done by an individual or a group of investors usually termed as angel investors (semi-professionals, who were or are founders of companies themselves). 

• Venture Capital: In this round of investment, your firm is either the most profitable or could revive all the negative cashflow afresh. Sighting these possibilities a venture capitalist will pump in funds in your company system.  

• Mezzanine Financing: This is the final round of investment before you go all out to the public. Here, your company is growing not only in terms of resources but also in its operations. It is valued over several million if not billions. Most of the startups sell off before entering this stage.  

• IPO: Initial Public Offering is the very first sale of stock issued by the company to the public. After the IPO is issued, the company becomes public and doesn’t remain private anymore. In order to grow and expand, a company raises a huge amount of money by going public. It is not the end goal of all startup businesses.  

You can also directly pitch your business ideas at leading networking events such as CodeUp and UpStart.  

Step 5: Choose your Type of Business  

Whether you own a business in Partnership, Pvt. Ltd. or proprietorship. You can refer to the Indian government regulations and norms for corporate rights. A quick glance at the new company registration process:  

• Select at least one suitable and unique name of your company. 
• Online application to the concerned RoC to ensure availability of the company name.  
• Form 1, 18 and 32 need to filled and submitted within 60 days of company name approval.  
• Draft, vet and print the memorandum and articles of the association by the solicitors.  
• Arrange for appropriate stamp duty of the memorandum and the articles.  
• Attest the memorandum by at least two subscribers with specification mentioned.  
• Check all the details once – date, signatures, stamps and so on. 
• Login to the portal and submit the form along with other mandatory documents.  

  Step 6: Register your Domain 

 Domain name is the face of your e-commerce site. For example, www.xyz.com/in/net and so on. XYZ is could be your brand name or its abbreviation.  

Tip: Let your domain name relatable, short and memorable. This will increase your audiences’ brand recall rate, awareness and hence sales; broadening your online business opportunities and scope.   

Step 7: Web Hosting 

As introduced, online businesses are upscaling rapidly and hence there are many web hosting services offered for free. If you are serious about running an online business for a really long-term in the future then it is better if you buy your own hosting services. Customized or paid services are flexible enough to provide you with all that you need for your site – templates, structure preference, code your own program and so on. Opt for a service which allows you to grow – upgrade or update regularly.  

Step 8: Create your Online Store & Mobile App 

At this stage, the main face or storefront of your website needs to be worked on. The entire user interface and user experience (UI, UX) is chalked, consented and implemented. Here’s the checklist: 

• Choosing templates 
• Designing homepage (color schemes, fonts, etc..) 
• Integrating landing pages 
• Showcasing high resolution and true product images 
• Selecting categories (earrings, clothes -men, women, kids, footwear, etc.) 
• Updating relevant products (as per categories) 
• Syncing shopping cart 
• Finalizing a trusted online payment gateway 

One of the main advantages of an online business is – it can be accessed anywhere and anytime. Use this advantage to the fullest by making your site mobile savvy.  

Step 9: Marketing Tools 

Now that your online business is ready to roll out in the market, follow these most cost-effective marketing tips to make your marketing efforts fruitful. Some of the tools include:

• Social Media Marketing: Promoting your business on Facebook, Instagram, Twitter. 

• Content Marketing: Making optimal use of blogs, videos, images and so on, to create awareness about your business.  

• Search Engine Marketing (SEM): SEM is a paid form of optimizing search engines. It poses as a top result for any organic search, depending on which keyword you want to show up for.  

• Viral Marketing: It’s a mixture of referral and influence marketing. Your customers will influence their friends to make purchases from your site and in return, you reward them with some incentives like coupons, cashback offers, free gifts and so on.  

• Email Marketing: It is all about directly communicating with your audiences.  

  Step 10: Analytics 

 You won’t know your success unless you measure it. Know who viewed your e-commerce website or web app? How many times and for how long? Google analytics is the key ingredient followed and trusted by all. The business analysis gives you a wider and brighter picture of what is working and what isn’t. This information helps you to strengthen your online business and guides you to move on the correct path without any major losses.  

 Step 11: Feedback 

This cycle is vicious and isn’t completed without a valuable feedback. Seeking for feedback always makes you stand tall as a learner and a businessman of quality. Your customer feels open and caring when you give them some space to speak out their minds about your product or business. Respect your audience and what you get in return is definitely priceless! 

Starting an online business and climbing the success ladder holding it upright is a choice of the matter. There are many businesses which came to life and died before their expiry. But the ones who sustained, are smart players wanting to make it big and better not only for themselves but for all.  

 So, which one are you? 

The post How to Start a Successful Online Business appeared first on PayU Blog.

What is GSTR?

To update the invoices completely, taxpayers and businesses have to file specific returns with the Government. All the information provided by the taxpayer is securely protected and housed by GSTN (Goods and Services Tax Network) – a non-profit organization which is promoted by the central and state governments, in order to boost technical infrastructure and services required for implementing GST reform in the country.

Under the GST law, a normal taxpayer is required to be equipped with 3 monthly returns and 1 annual return. You can file GST returns online by logging in.

What to file?

A normal taxpayer or business (a registered taxpayer with an annual income of 20 Lacs or more, and 10 Lacs in the North Eastern and other hilly regions) has to follow the filing process mentioned below:

GSTR 1

It all starts with Goods and Service Tax Return 1. GSTR 1 is a statement of outward supplies and has to be paid by all registered taxable users. It signifies the tax liability of the supplier for his supplies belonging to the previous month. It has to be filed by the 10th of every month.

*According to Sec 2(73), the new definition of Outward supply refers to supply in relation to a person, shall mean supply of goods or services, whether by sale, transfer, barter, exchange, license, rental, lease or disposal or any other means made or agree to be made by such person in the course of furtherance of business.

For example, you own a furniture business then, a statement of all your outward supplies made for the month of July 2017 needs to file in August 2017.

Exceptions: E-Commerce operators, input device distributors, dealers registered under the composition scheme, non-resident dealers and tax deductors.

GSTR 2

It is a statement of inward supplies. Here, the receiver taxpayer of the goods and services has to file the return within the given stipulated time period i.e.15th of every month. These return filers can accept, modify, reject or keep the invoice filed by the supplier taxpayer in GSTR 1 pending. It is auto-populated from the first return filed by the registered taxpayer’s corresponding supplier.

For example, now you are at the receiving end of the furniture supplier (example continued from above) i.e. you purchased furniture from the supplier, hence you are the receiving end/ purchaser and have to file GSTR 2.

Exceptions: input service distributors, taxpayers under composition scheme and non-resident taxable persons.

GSTR 3

Unlike in GSTR 1 where the taxpayer is required to provide details of outward supply and GSTR 2 which mandates the provision of inward supply, the third return is a centralized file. In this return, the consolidated information includes:

1. Aggregate level outward and inward supply information is auto-populated. (GSTR 1 & 2)
2. Real-time input tax credit (ITC) ledger.
3. Tax payable
4. Tax paid (cash & ITC)

This return needs to be filed by a registered taxable person by 20th of each month.

GSTR 8: A return to be filed by an E-commerce website

Here is an intentional direct leap from GSTR 3 to 8, mainly because of PayUmoney and this particular return has one thing in common – E-commerce. Under this return, specifically dedicated to e-commerce operates (those who build and operate online marketplaces which make way for other resellers to make business) the taxpayer is required to collect tax at source (TCS) under GST. The e-commerce operates will do so electronically through a common portal. The return filed must contain information about the supplies made via the e-commerce portal to the customers. It basically includes:

• Customers – registered or non-registered
• Customer’s basic information (registered or non-registered)
• Amount of tax collected at source (TCS)
• Tax payable
• Tax Paid

The date associated with filing your eighth GST return is by the 10th of every month.

Yearly Returns

Here, the taxpayers need to provide complete details of the entire year’s expenses and income. It has to be filed by the 31st of the next Financial Year.

Image source: www.cbec.gov.in

Returns Error

In case you go wrong while filing your return, you cannot undo or erase the mistake at the same time. You can revise or make changes in your previous month’s GSTR, only in the amendments section on the next month’s returns form.

Penalty

In case you do not file your return on time (within the due dates mentioned above) you will be penalized with Rs.100 per day and the amount can rise up to Rs. 5000 as the case may be.

Make sure you do not miss out on any of these dates

Image source: www.cbec.gov.in

Disclaimer: Please consult a GST expert / Chartered Accountant (CA) before filing your returns.

The post An Overview: GST Returns appeared first on PayU Blog.

Goods and Service Tax Law or GST  in India is one indirect tax levied on the goods and services right from the manufacturer to the final stage in the cycle – the consumer. It has replaced various taxes with different rates at multiple points, which include: service, luxury, VAT, sales and entertainment tax to name a few, in order to make compliance easy.

Types of GST

It is a consumption-oriented tax wherein the goods are consumed and not oriented towards manufacturing in which goods are manufactured. This nationwide reform cannot function efficiently without implementing strict rules to it. The council has made a foolproof road map for the citizens to abide by the law by dividing it into three different categories.

SGST

The GST levied by the state is called the State GST (SGST). It is levied on the intra-state movement of goods and services. As it is a state tax, the revenue processed is collected by the respective State Government.

SGST is levied on:

• State VAT
• Luxury
• Octroi
• Central Sales Tax
• Entry
• Entertainment/ Amusement/ Advertisements
• Taxes on Betting/Gambling/ Lotteries

CGST

CGST stands for Central GST, wherein the revenue on the movement of goods and services is collected by the Center.

It includes:

• Service Tax
• Central Excise Duty
• Additional Duties of Customs or CVD
• Special Additional Duties on Customs or SAD

IGST

Integrated GST or IGST is a reform levied on inter-state movement of goods and services. The revenue is collected by the Center. The main purpose of introducing IGST is to ensure a continuous flow of input tax credit (ITC) from one state to another.

GST Registration Online

Registration is crucial to be GST compliant. Though the reform has been actively initiated already since July 1, 2017, throughout the country, you can still register if undone. The application of registration has to be submitted within 30 days from the date on which the person becomes accountable to registration.

The registration process is quite simple and straightforward.

Register here: https://reg.gst.gov.in/registration/

Documents Required

• Photographs
• Constitution of Taxpayer (partnership deed, MOA, Certificate of Incorporation, etc..)
• Business Details
• PAN Card
• Bank Account Details
• Authorization Letter

Eligibility

Who can register for GST?

• Turnover Businesses: Individuals or entities involved in supplying products and services with an annual aggregate turnover of 20 Lacs have to register mandatorily. For some special states, the turnover criteria is 10 Lacs. If you own multiple businesses in a different or same state then you will have to register each business separately/individually under by providing your PAN card details.
• Inter-State Supply: If an entity supplies products and services in different states other than the home state, then it is mandatory to register for GST (irrespective of the annual aggregate turnover). For example, your business’ home state is Maharashtra, you supply goods and services in Tamil Nadu, Gujarat and Delhi then registration is needed.
• Existing Taxpayers: All entities having services, VAT or Central excise registration must be registered under GST.
• E-Commerce Sellers: Entities supplying products or goods over e-commerce sites/online are eligible for GST registration. If you are an e-commerce seller then you should go with a  GST ready payment gateway help you scale up.
• Casual Taxable Persons: He is the one who occasionally undertakes supply of goods without having any fixed places of business. For instance, a person who sets up firework business only during Diwali.

GST Registration Number

With this new reform, all the 8 million taxpayers are consolidated onto one platform for compliance and administration purpose. Goods and Service Tax Identification Number or GSTIN is provided to these taxpayers.

GSTIN is a 15 digit code wherein,

• • The first 2 digits will represent the state code.

• • Next 10 digits will represent the PAN number

• • The 13th digit will be the entity code (based on the number of registration within a state)

• • The 14th digit will be ‘Z’ by default.

• The 15th digit or the last digit may be an alphabet or a number

Why is your registration declined?

Yes, there is a possibility that an authorized officer may decline your application if:

1. You haven’t filed your returns for a continuous period of 6 months
2. You have not commenced your business within 6 months from the date of registration
3. You have not completed the form or submitted all the required details or documents.

Penalties for ‘No Registration’

• In case of fraud, the offender is liable to pay 100% of the tax.
• In case of unintentional offense or genuine errors, the penalty is 10% of the tax due.
• In case of an offender not paying tax or making short payments, the penalty is 10% of the tax amount i.e. a minimum of Rs. 10,000.

Exemptions from the Registration

• Any specialized UNO (United Nations Organization) agency
• International consulate or embassy
• Any other person notified by the board/commissioner

As GST is a unified duty reform it has the potential to reduce tax evasion, unified markets, increase in state revenue, improvement of tax governance and remove location bias. In its natal stage the new reform may seem like a misfit in the Indian economy, but in the long run with all the middlemen prices being eradicated this indirect tax reform will sturdy the country’s financial grounds.

If you own an online business or are planning to start one soon, then GST for online business will guide you well.

The post Insights: GST Registration appeared first on PayU Blog.

Benefits of Online Selling

If you want to scale up your business and give your customers the best benefit then its apt to move in the direction of your customer: Online with a wide range of online payments options. The benefits of selling products and services online include:

• Higher Reach: Building a successful online business means you are reaching out to a wide variety and number of audiences. It has a higher potential for increasing sales.
• Easy Analysis: By hosting an online store, you are eligible to analyze data and gain insights: which type of people are visiting your site, for how long are they surfing, at which phase do they step back (payment, quality, product selection, etc..), how much are your average daily transactions and so on.
• Multiple Accessibility: You as a merchant and customers can access your site or account from any device –  desktop, mobile, tablet, iPad.
• Spend Less: It is an economical way than a physical store. You save on a space, electricity and other bills, human resources and other sundry budgets.

Important Website Settings

The four important settings you would need to consider while setting up your website are:

• Domain Registration & Web Hosting: Selecting a memorable and relevant domain name is important so that it becomes easy for your customers to remember your brand easily. Web hosting is basically selecting the best server to host your site.
• Website: A website is the face of your business. Website template, look and feel needs to simple, user-friendly and refreshing. This will also help to keep customers frequenting your website often.
• Shopping Cart: Imbibing a prompt and reliable shopping carts is essential for smooth product deliveries.
• Payment Gateway: A payment gateway(PG) is like a bridge between you and your customer. It pops into the picture after the customer hits “Pay now” or “buy now”. It is the most convenient way of making online payments. Get well versed on how to select the best payment gateway for your website for easy and faster transaction process.

How does your Customer Pay Online?

Once you have considered the above-mentioned benefits, it calls for knowing the complete online payment process.

For instance, if you host an eCommerce website catering to fashion and lifestyle. Your customers will most likely follow these steps:

1. Website Surfing: Once your customer lands on your website, he will go through your products and know what different you have to offer him. After going through all your products and services the consumer narrows down onto the desired product/s he adds them to cart and proceeds to the payment stage.
2. Payment Gateway (PG) Redirection: When he hits on “proceed to checkout” or “pay now”, he will be redirected to the payment page of Payment solution provider like PayUmoney. Here:

• He is required to select this preferred online payment mode:

1. Credit Card
2. Debit Card
3. Net Banking
4. Wallets
5. Cash on Delivery (COD)
6. Gift Cards (only if applicable)

• Enter Cards/Net banking details clicks on Pay
• Enters the correct One Time Password (OTP) received on his phone, the transaction is successfully complete.

Why you should collect payments online?

If you have already set up your business online, one important question is accepting payments online. What does it bring to your customers? What will it make a difference to the customers?

• Faster Process: Fund transfer using online methods is faster. The usual cheque or bank transfers take longer to get cleared.
• Convenience: Your customers can pay from anywhere and anytime. It comes with a 24/7 ability to collect payments.
• Multiple payment options: Your customers can choose their preferred payment options like debit & credit cards, net banking, wallets etc.
• Easy Setup: Setting up online payments options can be as easy as copy-pasting a single line of code. Read more about PayUmoney button here

Explore PayUmoney and discover why more than 3 Lakh merchants trust us!

The post Why You Should Collect Online Payments? appeared first on PayU Blog.

Tax changes?

Previously, dealers registered under VAT were issued a TIN number & service providers were given a service tax registration number by the Central Board of Excise and Custom (CBEC). From July 1^st, a single platform called GSTN has been introduced to provide IT infrastructure for all those under the compliance. Here, the Goods and Services Tax Identification Number (GSTIN) will be used to collect or pay taxes. It is a 15 digit PAN based number with State code & business vertical details as shown below:

At PayUmoney payment gateway, we are helping merchants comply with GST laws & transition to the GSTIN network by completing easy steps shown here with a dummy account:

Login to PayUmoney seller Dashboard:
Head over to the ‘Account Details’ section on the left:

Move to ‘GST Details’ section:

Click on ‘Add your GST Number’:

Enter Correct 15 digit GSTIN & Operating Address details and Click on Submit.

Service Tax changes?

In the era from July 1^st 00.00.00 Hours, the Service Tax will be levied at 18% instead of the 15% on all transactions. This is in accordance with the guidelines issued by the Government of India and the GST council.

To comply with the GST laws, it is imperative that you update your GSTIN on our dashboard asap. Login to our payment gateway dashboard now!

Read this blog to know more about the impact of GST on your online business

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What is GST?

GST is the single biggest tax reform in India aimed at replacing all indirect taxes like sales tax, service tax, VAT, customs duty, central sales tax, entertainment tax, luxury tax etc. GST is “one indirect tax” on the supply of goods and services, right from manufacturers to the end consumer for the entire country, which will make India one unified common market. In the current scenario, indirect tax is highly complex due to the multiplicity of taxes, compliances issues obligations, tax overlaps.

What will be the impact of GST on e-commerce business?

Let’s first understand what Electronic Commerce & Electronic Commerce Operator means under the ambit of GST: “Electronic commerce” is the supply of goods or services or both of them. This includes digital products sold over digital or electronic network; { as under Sec.2 (44) of CGST Act}

An “Electronic commerce operator” is any person who owns, operates or manages the digital or electronic facility or platform for electronic commerce. { as under Sec.2 (45) of CGST Act}. Also, a person providing information or any other services incidental to or in connection with such supply of goods & services through electronic platform will be considered as an Operator.

Here are few real-life examples to explain how different sellers in the online world will be affected by GST:

1. Direct Supply from Seller to Customer: –
Sellers who have their own website for their business and do not rely on other online aggregators for the listing of goods. In this case, Central GST (CGST)/State GST (SGST) shall be charged by a seller in case of an intrastate transaction and IGST in case of an interstate transaction.

Eg: Rahul orders a book from bookshop.com. The online website shall be maintained by the seller – Bookshop & the invoice of the book has to be generated by Bookshop and shall levy GST on the product sold.

2. Supply from Seller to Customer via online Aggregators/Intermediary: –
Products of sellers are listed on websites of aggregators. These orders are in turn given to the Seller for delivery of the goods. Here, the seller has to make the invoice & deliver the same to the customer directly. The invoice shall contain the name of the company/firm, Reg. Address, TIN/CST no. etc.

Example: Mr. Rohan orders the latest mobile from the Online aggregator. The aggregator will now book an order on behalf of the Seller named XYZ Retailer. So, the aggregator will ask XYZ Retailer to deliver goods to the customer. Here, the seller XYZ shall levy GST on the goods. The aggregator shall generate an invoice and charge GST according to the services given to the seller like Courier, Shipping charges, Booking, Commission etc in the name of the seller. Invoice to be charged can vary according to T&C contained in MOU with sellers. Eg – If goods are delivered by e-commerce platform to the customer then shipping charges shall be charged by platform in the bill.

3. Sellers to Online Portal to Customers: –
Here, online portals buy goods from sellers and then these portals sell to final customer i.e. the inventory has to be bought by the portal. Role of e-commerce site shall not be limited to provide interface but also to become the owner of the goods.

For example, Mr. Sourabh orders portable speaker from the Online Website ABC, this site will book order & purchase the goods from Shashi Electronics to deliver the goods to Customers. The invoice of the said speaker will now be created by Shashi Electronics including TIN No. and addressed to the Website – ABC. Now, ABC will issue an invoice to Customer.

Who needs to be GST compliant?

The following type of businesses need to register:

• Any business crossing the threshold limit
• Existing businesses registered with the central (Excise / Service Tax) or state (VAT) authorities
• Taxable person carrying on an interstate supply
• Businesses liable under reverse charge in GST ambit
• Businesses wanting to collect GST or claim input (despite being below threshold) can take voluntary registration

How to become compliant?

Registration process for a new seller
A seller has to fill in registration application in less than 30 days of crossing the prescribed threshold / starting of a business. Here, the date of application would be considered the effective date of registration for obtaining Input Tax Credit (ITC).

Registration Process for an existing sellers
All sellers registered with central or state tax authorities would be migrated to GST by default and allotted Goods and Service Tax Identification Number (GSTIN). Sellers falling below the threshold may continue to be registered and get benefits of GST credit chain or opt out themselves.

GSTIN:

It is a 15 digit PAN based number with state code & business vertical details as shown below:

State Code: To be based on India census 2011. Ex: 27 for Maharashtra and 29 for Karnataka
Entity Code: Alphanumeric 1 to 9 and A to Z based on number of business verticals in a state for the same PAN (i.e 9 digits plus 26 characters, a total of 35 business verticals per state is possible)

You can read this blog about the impact of GST on online businesses. Stay tuned with PayUmoney blog for more updates and insights.

The post GST For Online Businesses appeared first on PayU Blog.

Following are the key impacts and recommendations for an online business on account of GST:

Impact Of GST On Online Businesses

The reform not only revamps the current paradigm of indirect taxes but also improves tax compliances.

Ease Of Starting-up

GST brings in the uniformity through centralized registration which makes it easier for online businesses to get started.  This centralized system replaces the old and rigid process of VAT registration issued by Sales Tax Department.

Higher Exemptions

Earlier businesses with a turnover of more than Rs. 5,00,000 needed a VAT registration. The reform increases this bar to Rs. 10 Lakh, thereby bringing respite for new businesses.

Simple Taxation

It aims to minimize the hitches in the double tax system. It simplifies the process by integrating all taxes into a Uniform GST.

Reduction In logistic costs

The reform eliminates border taxes which is levied upon movement of goods from one state to another. Hence the costs inculcated in the logistics movement will come down.  A seamless interstate flow of goods will further accelerate the demand for logistics services. It reduces the cost competitiveness as players are directly brought under a single tax regime.

Compliances Under GST For eCommerce

GST brings absolute clarity with regard to the applicability of taxes on transactions undertaken by eCommerce companies. 

Setting Up Of SPV

The success of GST is highly dependable on a robust IT system. Therefore, GSTN, which is a special purpose vehicle (SPV) has been set up. It aims to provide a common portal for registration, return filing and e-payment facilities.  

Tax Collection At Source

GST devices that any payment made to a supplier would be subject to tax collected at source. Also, it becomes mandatory for an eCommerce company to pay tax on the price it has purchased the good from the supplier, in case it decides to sell a product on discount.

Definition Of eCommerce

eCommerce has been defined absolutely under the GST Act. 

‘Electronic commerce’ shall mean the supply or receipt of goods or services, or transmitting of funds or data, over an electronic network, primarily the internet, by using any of the applications that rely on the internet, like but not limited to e-mail, instant messaging, shopping carts, Web services, Universal Description, Discovery and Integration (UDDI), File Transfer Protocol (FTP), and Electronic Data Interchange (EDI), whether or not the payment is conducted online and whether or not the ultimate delivery of the goods or services is done by the operator.’

It would be interesting times ahead with considerable changes GST brings into the tax system.  Stay tuned with PayUmoney Knowledge platform for updates and insights.

Source: Ministry of Finance, Government of India

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