How will GST affect my kirana shop?

How will GST affect my kirana shop?

I have grown up sitting on my Dad’s Kirana Shop and there is a feel good factor when I am writing this answer.

Until now the life of Kirana Shop owners was very easy. Distributor and Dealers visits the shop, takes the order and supplies usually arrive the next day.

Many of these Kirana Shop owners had not obtained VAT registration because they were making sale to consumers who never asks for an invoice and thus what’s sold is sold and VAT paid on purchases from dealers and distributors is the tax that they were paying.

Though this approach was not right but there were negligible provisions to control this approach. Except for once in a while officials from State commercial department will make a surprise visit and seize all files and invoices and the whole market will become chaotic. But That’s All !!

Now comes the poster boy of Indian Tax Reform - Goods and Services Tax (GST).

Most of the medium and large companies have spent crores on conducting Impact Analysis of GST on their businesses inspite of a robust team of experts in-house. But in my opinion, these Kirana Shop Owners are actually have taken a financial hit on their business because of GST.

All the distributors and dealers have abruptly stopped the supplies and are asking for GSTIN to safeguard their input tax credit. Also, not every Kirana shop has turnover exceeding Rs. 20 lakh and thus most of these shop owners were idle for initial 10–12 days. It was then, most of these shop owners have forcefully obtained GST registrations, paying an amount ranging from Rs. 1500–2500.

As a result, these shop owners will now have to file returns under GST even though their turnover is less then Rs. 20lakh.

From my experience at our shop, I can imagine so many issues in terms of invoicing, record keeping and return reconciliation. GST will have more repercussion for these Kirana Shop owners in coming times.

Throwback: If any of the Kirana Shop Owner is facing genuine problems in GST compliance, can contact me. I will arrange for free assistance.


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