How will My online Kirana store be affected by GST?

Introduction 

The provision store near me is an affluent and firmly established shop with good sale and annual turnover, making it liable to pay GST. The introduction of GST in the market has changed the dynamics of business in India. It has powerfully influenced small-scale business owners who have limited resources and owe to the survival of the fittest. One such business is the online Kirana store generally found in every locality. These shops are very beneficial for little grocery shopping. However, they cannot give a solid hit to the big superstores but are a blessing due to their nearness and providing services during emergencies. The introduction of GST has been a significant setback to these small traders. The implementation of GST is still vague in terms of invoicing, record keeping etc. GST is the buzzword almost everywhere in India – from large corporate houses to households. Even the local Kirana shops cannot escape form from it. GST is the most significant turning point in the tax reform of the country. Small businesses such as Kirana shops are the first step suppliers to the consumers and hence assume one of the most critical roles from the GST touchpoint.

The law sets a threshold of Rs 20 lakhs below which vendors are not needed to register, impose GST, or comply with regulations. Firms with a revenue of less than Rs 75 lakhs choose to pay choice of paying tax under a streamlined programme. They must, however, create bills with the necessary information.

Positive Impacts:

a. Reduced taxes:

Most retail products are subject to 30 % indirect taxes on average in the current tax structure. This includes excise duty, VAT etc. Therefore, the main impact of GST on small Kirana shop holders will lead to a notable decrease in the tax burden on the retailers.

b. Smooth Input tax credit:

In the current tax structure, the input tax credit is available on VAT but not on service tax and import duty. In the GST rule, there will be set off on taxation starting from the consumer’s viewpoint. Therefore, the tax credit is a must to be taken into consideration.

c. Tax on gifts and promotional items:

 According to the GST framework, any supply made without consideration will be taxed. It is typical practice in Indian retail to give away free things as part of a promotion or a one-for-one deal. In the current taxation system, these products are said to be tax-free. Once GST is imposed, such gifts will also be considered for taxation.

d. Better Opportunities & Growth:

GST provides you with the best opportunities and business growth and expansion.

Upon implementation of GST, it is assumed that it would lead to a better system as the small traders would look for more avenues of profiteering. The complicated tax of pricing, accountancy and all such auditing formalities that every Online Kirana store has to undergo will all be sorted and solved with the help of GST.

e. Easy scope for opening an online Kirana store:

Own Online store holders do earn well as they have certain delivery charges which duly covers the amount of GST they pay. However, it is profitable to build your online Kirana store would lead to a lot of cost-cutting like that of parking, heavy expenses on electricity and maintenance. All these types of cost-cutting would compensate the GST to be paid by the owner.

f. Discipline:

The adoption of GST has aligned the Kirana shop holders to maintain their documents properly, providing them easy access to file their income tax returns at the year-end.  

Negative Impacts:

a. Compulsory Registration:

If you own an online Kirana store or planning to build your online Kirana store, it is compulsory to get the registration done once you can cross an annual turnover of 40 lakhs. This would include all taxable, non-taxable and exempted commodities. So even if you own an online Kirana store, the process procedure and rules would apply. 

b. Proper Documentation:

The periodic return filing is another tedious job for the owner as they need to maintain absolutely proper accounts involving all paperwork and note all important dates related to it. Missing any return would pose a liability. At four, returns have to be filed by the Kirana shop owners. 

c. Prior Survey:

GST is a sort of forced increase in taxes. It is a burden finally ranging from 12 to 18 per cent. Finally, it has to be taken from the buyer with the cost price. Setting up an online Kirana store involves a lot of surveys about customers.

d. Technology Oriented:

 Every trade is digitalisation. The billing system has changed. However, it has made our work easy but an uncomfortable situation for online Kirana store owners. Being techno-savvy is not a cakewalk for everyone. Nowadays building your online Kirana store is easy due to digital marketing, but competition with provision stores near me will brain some complex situations too.

e. Needs a very vigil approach:

Old traditional Kirana shop owners are very vigilant and particular regarding their profit earning. However, the GST system has become quite difficult for them to tackle and face in its practical approach. Even the smallest Kirana trader has to pay 18 per cent GST. 

f. Needs to give offers to compensate:

Consumers often prefer buying from branded online Kirana stores rather than small Kirana shops due to the various offers being issued by these branded superstores. 

g. Profit Shrinkage:

Due to the imposition of GST, the profit of the Kirana shop owner shrinks. An increase in purchasing price could still be acceptable for the products with a high profit margin, but not for goods with merged margins. 

h. Khata book needs to maintain:

The most necessary change was the throwback given by the digitisation of GST, which has been the shift away from demand and supply to a more customer-oriented experience. Due to digitisation, the online Kirana store has achieved popularity by giving an impetus to Khata book, which often becomes a burden.

i. Grievance Cell:

The Kirana shop owners would need guidance to abide by the laws on an immediate basis. Even if it requires private players’ help, the government could set up facilitation centres in each municipality to address queries and help service providers with their return filings. The effectiveness of GST depends upon how efficiently small Kirana shop owners service onboarded to help ensure the benefits of GST.

j. Long-drawn up-gradation process:

Deliveries get impacted due to the time-consuming up-gradation process in the GST system. The changes take time to get settled.

Conclusion:

The introduction of GST is a boon as well as a bane to the Indian economy and finance. This increases the GST. The various enterprises are blessed as they do not have to pay any other tax apart from GST. Owing to its simple registration and online payment system, enterprise holders a lot. The return filing maintains transparency and checks all sorts of unnoticed buying and selling. On the other hand, the enterprise holders face severe consequences with other provision stores near me if they do not file a timely return. The various upgrades at times become difficult for the business people to manage. With changes, every business has to abandon pen and paper and become techno-savvy which is a mammoth task for the traditional ones to follow.