Tag: GST for freelancers

Advantages of GST for Startups

Benefits of GST for Startups and Small Businesses

The implementation of the Goods and Services Tax (GST) in India has enormously influenced the way startups function. GST has terminated some indirect taxes and combined everything under its own larger umbrella. It was introduced with a slogan of “One Nation One Tax” to ease compliance plans for businesses and specially for startups.

With the implementation of GST in India, the procedure for GST registration became centralised and also standardised. It shall remain almost like the service tax registration. Under the GST regime, the business would not need to obtain multiple VAT registration. As a single GST registration applies across India. Therefore, the procedure for getting GST registration would also become standardised. Thereby improving the convenience of starting a replacement business in India with none difficulties.

GST for startups: All you would like to understand before you register

The entire GST registration process takes place online, saving you the effort of running from one office to a different one.

Here’s a checklist of all documents required for GST registration for startups:

  1. Company Pan card
  2. The Ministry of Corporate Affairs incorporation certificate
  3.  Memorandum/Articles of association
  4. Signatory’s appointment proof
  5. Signatory’s PAN card
  6. A Signatory’s Aadhaar card
  7. PAN card & address proofs of enlist directors
  8.  Address proof for place of business (copies of lease agreement/ latest electricity bill/property tax receipt)
  9. Proof of checking account (scanned copy of the primary page of bank passbook/bank statement/cancelled cheque

While the products and Services Tax (GST) is predicted to facilitate that growth, not all aspects of the new tax regime are startups-friendly. Let’s take a glance at how GST has impacted startups

1. Higher threshold for GST registration

Before the implementation of GST, any business with a turnover of quite Rs 5 lakh during a fiscal year was required to get VAT registration. However, any business whose turnover exceeds Rs 40 lakh during a financial year is required to register under GST. This limit is Rs 20 lakh for service providers like freelancers.

This higher threshold under GST has brought compliance relaxation to many startups in India, including small business. 

2. Enjoy tax credit

A lot of startups in India are a neighbourhood of the industry. Prior to GST, they had to gather and pay service tax to the govt. Non-utilisation of the VAT paid on purchases made for business basis was one among the first concerns. There was no provision for claiming the credit of state VAT paid against the service accountability.

Since GST has brought several indirect taxes under its umbrella, the matter has been resolved now. Startups can withdraw tax paid on the purchases (for example office supplies) with the tax paid on their sales under GST.

3. Ease of running business

GST, there will be one single registration and less paper work. The business owners would now be ready to focus their energy in completing productive business operations instead of complying with complicated tax laws.

4. Expansion of business

Most small businesses restrict their business operations to at least one state thanks to inter-state taxes and sophisticated tax procedures. This limits their customer stand to the state where they’re located. GST will simplify the inter-state tax complications, reducing the value of supplying goods across states. This will inspire business owners to expand business Pan India; thus, increasing their customer base.

5. Reduced tax burden

Under the present scenario, businesses with turnover of but Rs. 5 lakhs don’t need to pay the VAT registration fee. This limit has been increased to Rs. 20 lakhs under the proposed GST bill. This will reduce the tax burden on the SMEs.

6. Cascading of taxes has been eliminated

Since GST was implement to bring all the indirect taxes under one umbrella, the sooner hassle of tax cascading (or tax on tax) has been eliminated. This translates to more direct savings for little businesses.

7. Online compliance processes

It has become extremely easy for little business owners to file their returns with the introduction of a web portal. A centralised digital system means they do not have to register separately with different tax entities and undergo the effort of navigating through manual workflows.

8. Easier Invoicing

Invoicing becomes easier because the tax apply uniformly and there’ll be no distinction between goods and services thereby reducing evasion and cash in of varied tax incentives.

9. Reduction in Transportation and Logistics Cost

Before the new GST regime, the state governments have applied their own different tax structure when it came to Octroi and CST applicability for interstate transportation of products. Therefore, the implementation of GST is often considered as a conquest by the central government in India and a welcome move for startups.

Conclusion

GST may be a pivotal reform, not just for startups, but major corporations also. The implementation of GST ensures that startups have a neater experience with tax compliance than under the previous regime, which they enjoy additional benefits, like smoother movement of products. Both of those benefits release tight budgets for operations and performance of services.

 To get more information about GST for Freelancers visit GST for Freelancers and Bloggers

GST For Freelancers and Bloggers

Guide on GST for Freelancers

GST is applicable in India from 1st July 2017. It is also applicable to Bloggers, YouTubers, Service Providers and each one other kinds of Freelancers. The rate of GST in such cases is 18%. There is no doubt regarding this and it’s fairly clear that GST @ 18% is applicable on all Service Providers, Bloggers, YouTubers, affiliate marketers and other freelancers.

However, GST Registration will be necessary in such cases (if the whole value of services provided is sort of Rs. 20 Lakhs during the year) and Return filing & all other compliance would even be required to be followed.

Bloggers could also be a replacement profession in India a bit like the Doctors or Engineers. GST also is going to be payable by bloggers, affiliate marketers, YouTubers, and other freelancers at the rate of 18% of the whole revenue generated.

A GST of 18% has been applicable to be levied on services like marketing, blogging and more freelancing services when the services provided are within the economic boundaries of India. The tax will have to be collected from respective clients and deposited to the govt. of India.

If the supplier and thus the client are both from the same state, the classification of GST is getting to be as follows:

1. CGST @ 9%

2. SGST @ 9%

The overall tax paid is getting to be the same, i.e., 18%, but it’ll be paid to Central and government separately.

Your invoices must be clear to show your business Name, Address, Invoice Date and your GST number, your client’s GST number (if B2B service), GST amount and total amount.

Why do Bloggers or YouTubers come under GST?

YouTubers and bloggers represent the service induced liabilities under the GST Bill. A blogger comes under consideration as a supplier of services. Bloggers offer a platform to the advertisers to dispose of their advertisement.

Freelancers who are bloggers, app and web developers, content writers, etc. They have been exempted from registration under GST if their annual turnover is up to Rs 20 lakhs albeit making the interstate supply. Before this relief, GST registration was mandatory for a private who was providing services outside the state no matter their turnover.

This has an enormous impact on the small scale Bloggers and to other service providers which were mandatory to register for GST. A small- scale freelancer who was earning about 100,000 rupees once a year can’t hire a CA who will charge thousands of rupees to remain GST compliant. This burden of registration has been removed and now they have to register only their annual turnover is above Rs. 20 lakhs.

Export income remains exempted from the GST

Export income for online entrepreneurs means if you receive any income comes from a faraway registered company. In most of the cases, export income comes through PayPal from the clients.

AdSense income, Affiliate Income from Foreign registered company, Freelance income from PayPal is taken under consideration as export income.

Let’s Discuss some service provider who required to Register for GST

Freelancers: If you are a contract writer, designer, developer or digital marketer who is providing services of quite 20L annually.

Bloggers: You’ve to pay GST, if you are making online income through blogging. Because whom you provided sponsored articles, will have income from advertisements or getting a commission as an affiliate.

Affiliate Marketers: If your income comes from any affiliate marketing network based in India like Amazon or flipkart, then you’ve to pay GST.

YouTubers: Same as bloggers, Youtubers even need to register for GST if their annual income is sort of 20L.

Digital Marketers: You furthermore may have to return under GST if your business is above 20L once a year.

Perk of GST

You will get a benefit of the GST amount that you simply pay on your business expenses. GST on expenses is will be adjust in your GST returns against the GST that you simply pay on your business income.

What is the GST Registration Process for Bloggers, YouTubers?

The GST official portal is GST registration. This registration requires the business information, personal details, Details of the Business property.

If you’re unsure whether your yearly income will reach the bar of 20 lakh once a year or not, you’ll still charge GST from your clients. Just in case your income doesn’t reach Rs. 20 lakhs at the highest of the year, the GST you charge from your customers will be credit back to your clients.

Conclusion

It is highly mandatory for the bloggers, YouTubers, Affiliate Marketers to register for GST and send out their GST on time by generating GST invoices. Doing so will keep you safe from any risks like the penalty of not paying the tax.

For more details Read Simplest Guide to GST for Freelancers in India