Managing your GST effectively in 2021
GST Collections in our country are flourishing and have been comfortably floating above the Rs. 1 Lakh Crore mark since October. While this rise is largely attributed to improving fiscal numbers after the economic slump, several remedial tax reforms introduced by the government seem to have driven this rise.
As a remedial measure to boost tax collection, the government introduced a number of citizen friendly measures to simplify taxation and make the process of managing your GST more convenient through an online GST registration portal. These measures led to a reduction in tax errors and also enhanced government surveillance to ensure stricter tax compliance.
Recent measures taken by the government to boost GST collection
This reform is one of the most hailed reforms in the recent past. Electronic Invoicing or E-Invoicing is an electronic authentication mechanism under GST that involves uploading details of specified GST documents such as B2B and export invoices on a dedicated GST registration portal. This move has made the GST filing process a lot more simpler and has enhanced taxation efficiency by using details from the uploaded e-invoices to automatically populate the GSTR-1 return and part-A of the e-way bills. Other features of this reform are that it has drastically reduced the chances of tax evasion since invoices are directly uploaded and has also led to a significant reduction in processing costs and disputes.
This measure was only available to businesses having a turnover exceeding Rs.500 Crores until now, however effective from 1st April 2021, businesses exceeding a turnover of Rs.50 Crores would be able to upload their GST invoices online.
Using online GST registration data to identify tax evasion
Government authorities have started to use the data collected from the GST portal effectively to address the long standing issue of tax evasion. As the GST audit for the FY19 -20 got completed this year, the government has been adept in using this data to identify tax evaders and people indulging in malpractices such as issuing fake invoices to take action against them. The authorities are also identifying loopholes in their tax collections system and are building on it to make it more citizen-friendly.
Apart from the aforementioned measures, the government is also ensuring that the taxation policy is not meddled with much so that there is a minimal compliance burden on citizens.
Importance of managing GST
As the government is taking strict measures to identify and punish tax evaders and defaulters, it is extremely important for a business owner to make sure that they file their taxes well in time and comply with the guidelines and abstain to deal with dealers who engage in tax malpractices such as generating fake tax invoices.
Being meticulous with your taxes also grants you certain privileges such as you get quick Visa processing, you can carry forward your losses to subsequent years and you can also get easy approval on a business loan.
Business loans such as the Bajaj Finserv Business Loan available on Finserv MARKETS allows you to borrow large funds to invest in your business without pledging any form of collateral. Instead, your tax returns and turnover vouch for your ability to repay the loan. The business loan interest rate begins from 17% per annum and allows you to borrow a sum of up to Rs. 30 Lakhs to fulfill your investment aspirations.
GST collections have witnessed a significant boost in the recent past and seem to be driven by measures taken by the government to boost tax compliance and the recovery from economic slowdown witnessed in our country last year. The measures taken by the government include setting up an E-invoice mechanism and cracking down on tax defaulters through data collected from the GST portal. In such times, it is important to ensure that you manage your GST meticulously to avoid any hindrances from the government. Moreover, filing your tax in time is also detrimental in getting a quick and hassle-free business loan approval.