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Goods And Services Tax FAQs
Vishwanath read the draft GST laws that were available in the public domain. He knew that it would be some time before the final laws saw the light of the day. At the same time, he had seen television news anchors screaming that the Central Government was determined to bring the law into force from 1st July 2017.
The day was 15th of March or ides of March, the day Julius Ceasar was killed. He counted the days remaining for 1st July, the month named after Julius Ceasar, was just 108 days away. It left him nervous. Being a hard-nosed businessman, he wanted to initiate all the steps that he could for a successful transition to GST immediately.
He met Mr. Prasanna for this purpose. What do you mean by successful transition?
Mr. Prasanna explained that a business entity would have had a successful transition to GST if it is able to optimize its performance with least disturbance and also by being fully compliant with the new law.
Principles governing Input Tax Credit state that CGST cannot be utilized for paying SGST and vice versa. A business entity must analyze the kind of levy ie CGST, SGST or IGST that would be charged by the vendor of goods or services and whether it can be used for output GST. Necessary changes in the supply chain can be made so that input tax credit is optimally utilized.
Input Tax Credit FAQs
After listening pensively to Prasanna, Vishwanath was now overwhelmed by the weight of the task that was to be completed in the next 100 odd days. Prasanna tried to reassure him before bidding adieu. It is good that GST would be implemented from 1st July 2017, around the time of summer solstice when days are longer than nights. When the Sun is out and where there is will, there is always a way!
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