When Prime Minister Narendra Modi dropped the goods and services tax (GST) bomb on businesses, most of them were not equipped to deal with the change. To help them make the transition, GST Network (GSTN) identified GST Suvidha Providers (GSPs), government-approved companies that would help businesses become GST-compliant. One such company is Zoho Corporation. With its team of experts, Zoho launched its GST-compliant finance suite, which offers complete business solutions on a cloud platform, including filing GST returns.
Prashant Ganti, head of product management, global accounting, compliance and payroll solutions at Zoho, discusses the new developments in the GST process and benefit of financial and accounting solutions for small businesses.
On new developments in GST filing process
Earlier last year, the government discontinued GSTR2 and GSTR3 after several complaints of GST compliance. Assessees will be further relieved as GST council will soon make the filing process easier. A single form system will be implemented in three phases, as it has been approved in the recent council meeting. During the first phase, GSTN and IT team will work on the software and test it for implementation while filing through GSTR1 and GSTR3 B will continue. In the second phase, single form system will replace GSTR1 and 3B. For B2C traders, the new form contains the total turnover information while B2B traders have to give information on invoice-wise details based on HSN code. The invoices can be fed daily or all on one day. Also, the new system will calculate the tax liability and input tax credit. As sellers upload their invoices, dealers can constantly be fed with information about the credit they have. The third phase is expected to start in next May, where buyers can lock the invoice uploaded as soon as they see it. They will get credit only if the invoice has been uploaded.
For some of the small businesses, GST filing is still a difficult task due to lack of proper IT and technical infra. Some may still be facing uncertainty regarding filing and completing compliance procedures.
A year of GST: challenges that continue
Challenges are surely there but the scenario is much better than what it was earlier. Initially people didn’t know much about GST but now there is awareness and the government too is rehashing the laws to make the process simpler. According to the complexity of the business, people have to deal with challenges related to the business structure, understanding the GST structure, payment issues, etc. For some of the small businesses, GST filing is still a difficult task due to lack of proper IT and technical infra. Some may still be facing uncertainty regarding filing and completing compliance procedures. For exporters, liquidity crunch is another problem. In GST, funds have to be maintained in the form of electronic credit ledger which keeps the record of tax liabilities. So, there are some areas whose understanding has to come through proper channels.
Benefits of cloud solutions to small, emerging businesses
Cloud solutions can help businesses a lot, regardless of GST. One can easily access everything including communication and data at any given time and place. If we talk about accounting system, they are more secure on the cloud, than on physical record. Cloud solutions are also the best because of the easy access. They can be operated on mobile, tablets, etc. Beyond that, one doesn’t have to be a technical expert. All one needs to do is to log in to the system and the solution should give sufficient insights into how to do the job. In case of finance solutions, today expectations are different. You do not have to be proficient in accountancy to use finance software. You just need to know your business well for operating finance solutions. Of course, you may need help of an expert in filing some complex journals etc, but you can run majority of the systems we have made.
Finance solutions as growth promoter for small businesses
Businesses should have right systems. We often talk to lot of small businesses and it seems that they don’t know about their cross margins, cost, etc. So basically, business is all about buying, filling the books and gain some cash in return; but it has to be managed in a certain way to get a complete picture. The accounting and finance solutions help at every step of business, such as filing tax, making complaints, etc. But that is just 10 per cent; 90 per cent of the business relates to margins and cash flows. That’s why accounting solutions are important to a business. Currently, people buy accounting system only to give customers a bill and to satisfy the government; these should be the last reasons. The primary reason for purchase of an accounting system should be for better decision-making and getting help in understanding the key performance indicators so that businesses can take action based on them. Lot of businesses shut down because of working capital. Accounting systems help them maintain cash flows. Also these solutions can help an SME business leverage banking services such as loans. This is because without a proper record banks will not entertain them. GST has changed this scenario a lot and people are now becoming more organised and systematic.
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