GST is Not a Trouble, If You Understand It Well


GST is Not a Trouble, If You Understand It Well
Resource Chapter 90            
Resource GST Discussion            

GST is Not a Trouble, If You Understand It Well

It is always advised to accept a thing and deal with it if is beyond your power to change it. There are a lot of tell tales from unauthorized sources that GST won’t survive the test of time. However, we beg to differ. GST shall stay, but there will be amendments in GST from time to time. Therefore, it is only practical that no matter what, you must understand it and accept it to make your life simpler. Unwillingness to deal with GST will only result in unwanted tension and losses for you in the form of penalties, interests, or more.

For example, if a handicrafts manufacturer makes an interstate taxable supply (supply from one state to another), then he/she would not require GST Registration. However, for this to be applicable, it is mandatory that his/her aggregate annual turnover be less than Rs. 20/10 lakhs. This exception is available only on handicraft items that are mentioned specifically in Notification 32/2017-Central Tax Dated 15/09/2017. But the rate of job work remains the same - standing at 18% on that day. Another Notification -46/2017-Central Tax (Rate) Dated 14/11/2017 was released later which said that a handicrafts goods manufacturer will be expected to pay GST at the rate of 5% on the job work. The rate of GST dropped from 15/11/2017 and this notification said that to understand the definition of handicrafts goods, it is important that Notification 32/2017 be read. Along with that, it also mentioned that this rebate will be available only on handicraft items that have been described in Notification 32/2017.

It will be important to understand that the rebate on the rate of GST is applicable only since 15/11/2017 and not before that. Anyone caught charging GST at the rate of 5% before 15/11/2017 will be penalized and also be expected to pay GST at the rate of 18%. It is worth highlighting here that such a person will have to pay all the charges from his/her own pocket since he/she won’t be able to charge GST from the customer again.

Also, at this stage, let us make it obvious that handicraft is all about working with hands, i.e. manual labor, which means that machines should be avoided in manufacturing products. Going by that statement, if a sweater is woven with hands, it will be considered a handicraft product, but if is woven by a machine, it will not be considered one.

Click here to see the list of handicraft products on which the worker will get rebate on interstate taxable sale and on which the rate of job work is only 5%. 

If you fail to pay GST on time, you may be able to stay well in place for a limited time, but such a failure may also land you in a big trouble in the near future. The officer will consider any reason given by you for failure as an excuse.

Having said that, we reiterate that you will have to accept the procedure, comply and take registration in GST if that applies to you. There is no running from that. The sooner you get comfortable with it, the better it is for your business.