Gst for startups

231 views 3 replies

Priya

MBA

66 Points Joined December 2013

Hi,

I am the founder of a startup and currently our revenues are under Rs. 20 lakh. We have two products: 1. Robotics education product for high schools and engineering colleges 2. Placing temporary workers with local businesses.

1. For product number 1, we need to buy robotics kit components that we procure from Mumbai where we are charged GST of 18%. We are about to arrive at a pricing structure for the product and are wonderingif we should get GST registered and charge GST of 18% from students to enable us to benefit from input tax credit.

a. In this case, our net tax liability would be 0, wouldn't it?

b. So does it make sense for us to go ahead and get GST registered and file our returns?

c What is required to avail input tax credit?

For product number 2, what is the GST rate on staffing and placement services?

Thanks

Replies (3)

CA Jaspreet Kaur

Practice

192 Points Joined May 2013

1. a) Your net tax liability will depend on your cost price and selling price. It is not possible to say whether it will be zero without proper figures but yes you will be able to claim input tax credit b) You can go for registration for availing benefits of input tax that you are paying anyways and for recovering it further from end customers. But plz bear in mind that this will also increase your selling price. So plz ensure that the end customers will still be willing to buy it at the increased prices. c) You need proper original invoices for availing input tax credit apart from maintaining proper accounts. 2. GST rate on staffing and placement services is 18%

Priya

MBA

66 Points Joined December 2013

Do I have the option at present of charging GST on one product and not charging on the other one given we do not meet the turnover requirement?

Priya

CA Jaspreet Kaur

Practice

192 Points Joined May 2013

No, you cannot charge GST on any product untill and unless you are registered. And once you are registered you need to charge GST on all taxable products/services that you provide irrespective of your turnover.