On July 1 2017, the Government of India launched a nationwide tax reform called the Goods and Services Tax (GST). GST has been creating a lot of news since the past six months and since the launch there has been a furore of activities to align all the businesses with the current tax reform. But a large number of the 40 million micro small and medium enterprises in our country, of which home run businesses are a big part, are yet unaware of how GST will impact them and what changes if at all, do they need to make in the way they operate their business and pay their taxes.
There is a general sense of confusion and panic where everyone wants to do right and no one wants to be in a position of having defied this tax regimen, and yet there is not much clarity on how to go about it. Coming to the food industry, as that is where we operate in, the dilemma continues. Most bakers are wondering on whether they need to start charging 28% extra on all chocolate confections. Home chefs are in a quandary on whether to increase their product prices or not. Pune based baker Shruti Kapre has questions about whether she needs to register for GST at all and whether she needs to charge the tax separately. Home chef Rashmi wants to know whether she needs to take receipts from all her suppliers and then give receipts to her customers herself.
Some more questions that have been raised are-
- How to register for GST and what are the tax slabs?
- Who pays the tax on the chocolate, the supplier or the baker?
- Some say GST will make products cheaper while others say things will be more expensive. What is the truth?
- I have never filed a return for my business; will I need to do that now?
- How do I calculate my turnover? I need to pay tax according to that, right?
- I read about input tax credit, what is that? And how is that applicable to my situation?
- If I increase my prices by 28%, my sales will decrease and on top of that there will be more tax on me. How will I do business then?
- My suppliers do not give me a receipt; can I not buy my materials from them now?
- I have a part time job and run a home based baking business too. So I will have to pay income tax and GST both?
MealTango brings to you a unique helpline to resolve all such and more queries of home chefs and home bakers. Our expert Lalit Valecha (ex PWC, owner of Ahuja Valecha LLP) will be there to help you understand what GST is, what its impact will be on your business, who needs to register, how to manage pricing, etc. So make the most of this opportunity and make your home business GST compliant. Remember, this is a tax reform, which can be understood and implemented. And for any help needed, you have the MealTango GST helpline. So tune in to the MealTango facebook live session on GST for homechefs and homebakers, on Saturday, 8th July, 2017 , 4.30pm IST at facebook.com/mealtango.