GST simplified for a business owner

If you’ve been following the national news, you must be aware of the big tax reform coming up next month. The numerous existing taxes are getting consolidated into a single overarching tax – Goods and Services Tax. India is not the first country to implement the GST. For example, in Canada GST was introduced in 1991. You can learn more about GST in Canada by contacting some of the top lawyers in toronto. But no other country faces such complexities as India does. If managed successfully, it would become one of the biggest accomplishments of the current government as there is no doubt that this is the most ambitious GST reform ever attempted, both in scale of operations and the intricacies of execution.

There are lots of resources just a google search away, if you’d like to understand the background of this reform, i’d recommend this guide by Zoho to get started. Cleartax has launched an e-learning course for those who want to understand the concepts in a video format. I’ve even attended a couple of events to learn from the perspective of the finance community, the speaker from Capstone was amazingly talented at summarizing my views with an analogy –

What the current world looks like –

What the government promised when it promoted the slogan – One Country, One Tax

What we’re actually getting –

Apart from the rules that are changing, the modus operandi demands an upgrade as well. I believe that’s what is more relevant for people to understand, because you can still go to your CA for consultation on the rules and ensure compliance at all steps, but the CAs are not equipped right now to transform the back-office operations of their clients to ensure the work is happening as per the new world order. A lot of the large firms will get their processes upgraded by contracting Big4 consultants and Xero accountants, their mid-sized cousins will opt for smaller consulting firms. The bulk of the business owners would still attempt making these changes by themselves because that’s how they’ve been doing it. The local entrepreneurs are the real multi-tasking gurus who don’t mind getting their hands dirty.

I’m working on creating an ecosystem of connected google sheets that can be used as a make-shift processor for accounting and taxation needs of a small scale firm. This system would ingest monthly sales/purchase transactions, and create the tax sheets that can then be submitted on the GSP portals which inturn are nodal points that connect to the GST server. This process eventually would have to be automated as there 4 filings to be made each month, 36 per year; plus an annual return. However, if you find that your business becomes too advanced for this make-shift processor, you could always look for some outsourced accounting services who could help you with different parts of your financial work. It can be easy to fall behind on jobs like these, so sometimes getting help can be one of the best ways to keep up. Of course, you could always keep using the make-shift processor if you wanted to.

Anywa, let’s understand a bit more about these returns conceptually and the framework under which they would be filed, and then I’d talk more about the google sheets in a follow-up post..


Simply put, each month, the registered business owners would have to file the records of their sales, purchases and applicable tax for the previous month. One added monthly return would be for the TDS. This isn’t a new compliance expectation from the government, one just needs to think back to when we were all forced to apply for pan card seva, but when you look closely, there are 2 key features that really highlight the new approach adopted by the government –

  • Monthly frequency would make it further harder for business owners to evade taxes, people who used to fraudulently adjust their aggregate sales and purchase volumes would have lesser time to do so
  • The sales records that are to be uploaded will have to match the purchase records of the customers (as filed by them), thus interlinking the records at a digital level would make it impossible to get fake tax credits without involving multiple other parties

Let us now use an example to understand how this reconciliation process works:

Suppose MK Kitchen Knives (recipient) purchased 10 tons of steel from GH Steelware Inc. (supplier) which is also registered for GST. The two companies will reconcile their transactions, and the recipient will claim the input tax credit, as follows:

  • GH Steelware Inc. will file the GSTR-1 report (Details of outward supply).
  • The details furnished in the GSTR-1 will be auto-populated in the GSTR-2A (Details of inward supply) for MK Kitchen Knives, where they will be able to see the transaction details.
  • MK Kitchen Knives will then check the records and make any necessary modifications/additions. Once the changes are made, this information will be automatically pulled when they will file the GSTR-2. The correct input credit will then be credited to their electronic credit ledger.
  • GH Steelware Inc can then use the GSTR-1A form to view and accept the changes that MK Kitchen Knives made in the GSTR-2.
  • Finally, once GH Steelware Inc. has filed the monthly returns (GSTR-3), MK Kitchen Knives will be able to avail the input tax credit and apply it to future output tax liabilities.

Below is the application framework that’s been setup by the GSTN – the central body that essentially owns the GST server (in blue). It is expected that up to 3 billion rows worth of data (each invoice/bill being a row of its own) would be uploaded and downloaded each month. To manage this massive flow of data, the government has created clusters of nodes, the GSPs, to allow multiple people access portals where they can interact with the system in their own customized app without compromising on the security. Thus, the GSPs act as an intermediary between the government and the individual taxpayer, shown in the central box below. Some 200 companies have registered themselves as GSP already and soon more will follow. These include the Big4 and their smaller cousins, along with traditional IT companies and young fintech startups. GBox Capital is a good solution for many start-ups.

But as a business owner, the stick man on the left in the above diagram, what matters is that you’d have to ensure that you’re able to upload the GSTR-1/2/3/7 forms on a GSP portal of your choice each month. Since you have to do this exercise each month, the only sensible way is to ensure that you don’t simply rely on an accounting application but instead deploy an ERP that generates the GSTR return documents in the needed format automatically from the transactions data. These files can then be downloaded in CSV format for uploading on the GSP portal of your choice, and the rest of the data processing is done on the GSP-GST server.

The solution proposed above is the bare minimum you’d have to do, and this too would involve changes in mode of operations. This solution, however, is suitable only for small scale companies which can afford to manually track their filings. For large scale operations, the GSPs are expected to roll-out their own version of ERPs and tax applications that will allow users to file their tax returns automatically from their transaction data. This, however, comes at a cost of placing confidential data in the hand of a few GSPs but one way or not, any company can’t avoid this overhead going forward.

It’s amazing to see this level of the participatory and transparent approach of the government. It is the endeavor of GSTN to build the GSP ecosystem, ensure its success by putting in place an open, transparent and participatory framework for capable and motivated enterprises and entrepreneurs. In my last post, I spoke about designing new systems from bottom-up to keep up with the new delivery channels of optimum CX and through GSTN, the government has earned my respect in this regard!

I am motivated to participate in this ecosystem starting with helping small business owners migrate to GST world by digitizing their accounting, with a google sheet package to begin with and then as I get better understanding of the ecosystem, have an idea for a mobile ERP that would allow small business owners to evolve to a new world order where transactions are done and accounted for without fear of compliance and boring paper-work. It’s time finance became as fun as sales!

Revisiting Tamil Nadu – North of Kaveri

A couple of weeks ago, I had a chance to be back in Tamil Nadu and visit places which I couldn’t cover in my earlier trips – part one and part two! I loved this trip as each city I had been to was really old and writing about the trip afterwards became a lesson in history. I started writing this post with a blank slate and have atleast 20 tabs open in the browser already!

Although, you’d consistently be amazed by the history of Tamil Nadu, things are not so exciting for everyone. Apart from Chennai and maybe Coimbatore (haven’t been there) no other city is westernized enough to have an active nightlife. So, a lot of young people tend to give these spots a miss. Yes, I too realized that I sound like a grumpy old man. But the truth is that I saw very few people from north when I was at these places.

Anyhow, back to the post.. So, what’s the significance of the title – North of Kaveri – well, that’s what I covered in this trip! People from north India tend to club the whole south as one region, but like how you’d expect, the reality is much more complex. There wasn’t even a single Tamil nation for most of the history. Kaveri river often was the frontier of kingdoms which either ruled either north or south of the river. Pallava kings ruled from north of Kaveri and in this trip, I visited their erstwhile capital – Kanchipuram and one of their major port cities – Mahabalipuram. Apart from these 2 ancient cities, I spent a almost a week in Chennai as well, but there isn’t much difference between any metro city nowadays, so I’d stick with the grand Pallava cities.

So, continuing with the format of the travel posts I do, before we talk about the Pallava cities and buildings, let’s talk about the Pallava dynasty to get some perspective. The funny thing about Pallavas is that they didn’t have Tamil origins, so they are not really kept at the same pedestal in history books as the Tamil trinity of Cholas, Cheras and Pandyas. Pallavas served as feudatories under Satavahana dynasty (modern day Andhra region) and upon their fall, gained independent control over the region north of Kaveri river. Also during this time, Pandyas were the major kingdom below the Kaveri. The timeline of this change in power is kind of vague but we can go with wikipedia which mentions 3rd century CE. Although Pallavas and Pandyas were fighting against each other for territorial gains, they did come together for a brief period of time in around 6th century CE when they both got kicked out of power by Kalprabhas, who by the way were kind of weird and no one really talks about that time in history. But as soon as they were back in power, they again started fighting each other. So, in a way, politics here wasn’t very different from the rest of the world. So, back in power , Pallavas spent a lot of time fighting kingdoms in other regions especially Chaukyas, modern day Karnataka, though the fight wasn’t over Kaveri river water distribution back then. But ultimately their region was taken over by Cholas, a local power that had been expanding after it had overturned Pandyas in Madurai in about 9th century CE. Nobody ruled without disruptions in south, so Pallavas had got dethroned multiple times in between their 600+ years of rule, but let’s not get into those details!

The map below is really important not just for its political significance but also for the smaller cities it shows. We’ll come back to this map in a while.

 

I started out on a saturday morning from Chennai with a rough plan to cover Kanchipuram by lunch, and Mahabalipuram by evening and end the day back in Chennai. Although friends from Chennai suggested to cover only 1 city per day, I was able to cover both quite comfortably. If you are a light touch visitor, I’d recommend doing it my way otherwise days would really move slow for you. I traveled in local buses and it would be convenient enough for you to do the same as the frequencies are pretty good and you wouldn’t have to depend a lot on asking locals for directions.

So, as I got down at Kanchipuram, I booked an auto for the day. The auto driver agreed to take me to the 3 main temples I could’ve visited in the time I had before noon. All temples in Kanchipuram get closed by noon and re-open only at 4pm. I had been running late and managed to reach Kanchipuram only at 10am. Thus I agreed to his plan. Our first stop was Kanchi Kamakshi, a sister temple to the grander Madurai Meenakshi temple. You’d find this temple really clean and well-maintained. It also appears to be the most famous temple in the city, it even has a fully functional website!

Madurai Meenakshi’s sister Kanchi Kamakshi 😀

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I wasn’t carrying my camera on this trip, so all my photos were clicked from the OnePlus2 that I have and the best shots are up on Instagram, so I’ve decided to embed those same shots in this post. I’m really happy with Instagram, thus if this works well, I’d start embeding instagram photos here instead of uploading photos for all future posts. I have a good feeling about this transition!

But what continues is Disha sketching for her blog and even though she didn’t join me for this trip, but happily sketched based on my photos! Below is Disha’s rendition of the gopurams of Kanchipuram.

Honestly my main motivation to come to Kanchipuram was to see the Kailashnath temple, but that was the last temple on our list. The next stop was at Ekambareswarar Temple. I didn’t know much about this temple and was expecting a regular visit like the previous one but I was delighted to be here! The temple complex was huge and the south gate had the tallest Gaopuram of the city!

Really liked this temple!

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The best part was the inner halls which were lined with Pillars and the natural light gave really good shots. I was fighting the battery % and had rationed 10-15% for each monument, thus I took limited photos, and was really missing having my camera then.

Best shot from today’s collection! #kanchipuram #tamilnadu #historynerd

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You could see how old the temple was from the wear and tear of the statues in the halls and pillars. But still this place has the old charm that was missing at Kanchi Kamakshi. It felt like I was back in Trichy. Another interesting story about the temple is that a mango tree within the temple compound is said to be 3500 years old and gets 4 different varieties of mangoes in 4 different seasons. Well, I saw the tree but didn’t think it was the best idea to debate the authenticity of the belief within the temple. People seemed really strong believers, so I happily moved on to the next destination, the one I had been planning for months!

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Our last stop was at Kailasanathar temple, which is much older and for me atleast much more famous than the previous temples we had visited. Kailasanathar is arguably the oldest structural temple we can find in whole of India which isn’t in ruins, hasn’t been rebuilt and is still used for its intended purpose. It was built in the last few years of the 7th century. Off the trip, but on a related note, I was just now wondering why there are no 2000 year old buildings intact in India. The only building from that era that I can think of is the Sanchi Stupa, or maybe a rock cut cave temples at Ajanta. Infact on a quick broader search, I couldn’t find really old buildings in whole of Asia. In comparison, Europe and Middle East seem to have done better to preserve their architectural heritage. It doesn’t add up since China and India both were technically and culturally advanced than Europe in ancient times, thus they are more likely to have better durable building material. China and India must’ve also built great structures in the same time period as Parthenon and Colosseum, but they don’t exist anymore.

I don’t have answers to these questions and after spending a good one hour on this, I am still clueless. So, it’s best to get back to where we were – the grand temple which inspired generations!

The grand view of the Kailash Temple!

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It’s not just the main shikhara which would grab your attention, but look closely below, even the side walls are carved intricately and you can easily spend a good hour walking leisurely in the courtyard. The structure contains 58 small shrines which are dedicated to various forms of Shiva. These are built into niches on the inner face of the high compound wall of the circumambulatory passage.

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And now is the time to go back to map we saw earlier. The real reason I was waiting to come to this place was because I had seen this temple previously already! How? This temple exists at not one but three places in India! Confused? Well, I was just amazed to know this and I’m sure you will be as well! Remember how Chalukyas of Karnataka and Pallavas of Tamil Nadu used to be enemies? Well, in one decisive battle, when Chalukyas defeated the Pallavas, they captured Kanchi and established their rule over the city. I can imagine that the Chalukyas got inspired from this Pallava temple and built a replica of it in their temple city Pattadakal. That’s how Virupaksha temple was made. But that’s not it, later the Chalukyas were succeeded by Rashtrakutas and they found inspiration in this Virupaksha temple when they decided to extend the rock cut caves at Ellora. Thus, the Kailashnath temple at Ellora, which is now the most famous of the 3 copies of the Kailasnath temples, was based on a temple built 1000+ yrs away 50+ yrs earlier.

Disha’s sketch from my photo –

While you’re at Kanchipuram, you should also check out the local Kanjivaram saree collection. There are multiple government approved textile stores where you don’t have to worry about the quality of the silk. I ended up buying one as well, still waiting for the final reactions on it, more on that later. It was now time for me to head to Mahabalipuram for the second leg of the trip. If you’re not able to get a direct bus to Mahabalipuram, then instead of waiting for one, I’d suggest you take a bus going Chengalpattu and you’d get a connecting bus from there, atleast that’s what I did.

Mahabalipuram was the ancient port city of Pallavas who ruled from Kanchipuram. In a way, think of the relation between these 2 cities as that between Delhi and Mumbai. Kanchipuram was the traditional landlocked capital city and Mahabalipuram was the cosmopolitan commercial center based on the sea-side.

As soon as I got down from the bus, I was swarmed by Auto-rikshaw drivers for the city tour package, pretty much like at Kanchipuram. I was also tired by now and it was really hot, thus didn’t feel like walking the city. But at the end of the tour, I did realize had the sun been not so harsh, walking around the city could’ve been a good option.

Our first stop was the Panch Rathas, which is a collection of 5 temples hewn out of a single massive rock. More than the religious value of these temples, it seems like an architectural challenge given to the local artists by the king. We then moved over to the next site which seemed like an archeology park next to a lighthouse. The temples here were similar to the Ratha temples and I did spend a good 30 mins walking through the complex. The rocks here were not hewn from outside but instead from inside to make cave temples within them.

These caves reminded me of the Chalukya caves in Badami

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I couldn’t get a lot of photos as I was low on battery and wanted to save for the Shore temple. Thus, I hurried through the rest of the places, walked by the rock reliefs which go by the name of Arjuna’s penance. It is difficult to make out what’s happening in the first go but the I just overheard a couple of guides and it seemed like a good story but I was not patient enough to listen to the whole thing as it could’ve well been made up.

Well, as you would have realized I covered a lot of these monuments in a bit of hurry. I guess if I would’ve come here on a fresh day, then perhaps, I would’ve been more interested. Nonetheless, I moved over to the Shore Temple and that’s a grand site. Only big kings who’ve established strong hold over the regions for a considerable time can afford to build such monuments. Thus this temple is one of the reasons why Mahabalipuram would always be remembered when someone talks about Pallavas. It is even believed that there were six more temples just like the Shore temple in the past and the city was called the city of the seven pagodas. ASI even explored the sea around the coast and they’ve found man-made structures made out of stones upto a few kilometres from the coastline. I am guessing the city must’ve been much bigger in 8th century and the coastline has receded over the years due to rising sea-levels.

What a grand site to build, kind of earlier version of Somnath temple!

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And here is Disha’s version –

Well this one is not exactly framed on my photo. I tried but but couldn’t find a spot to click a photo like this. It’s an advantage for artists to take liberty of removing all the background noise, stones, trees and sketching a surreal shot 😀

It was almost end of the trip by this time and I was little hungry as well since I had skipped lunch. I was initially planning to go over to the famous restaurant in the city – Moonrakers for some local seafood but my driver advised me to take the next available bus to Chennai from the highway as there was a halt in service due to local protests. I didn’t want the otherwise happy day to end dramatically, and hopped onto the bus that brought me back to Chennai by 7.30 PM. I got down next to the Sangeetha’s in Guindy and that was my dinner, couldn’t get any more convenient than this. But when you’re going over to Mahabalipuram, I’d recommend you to checkout moonrakers after exploring the monuments!

 

Life in the fast lane

Judging from the erratic frequency of my posts this year, it is only logical to assume that something has changed drastically, so it is time to let the cat out of the bag! I quit my job at ExxonMobil earlier this year in March and shifted back to Gurgaon, my home city. It was a rather short sentence for a change of phase in life, but actually that’ how it went! Although it was my first job change, but it seemed like I already knew what was to be done, how to do it and the adrenaline rush was short-lived. Won’t say that it was an easy decision, as I do miss my life in Bangalore, but it does seem like the right move for many reasons. Why? this cartoon strip sums up the story very well –

shifting to swiggy

I was tired of running in circles of the big company I was part of and decided to go back to hills where I think, I belong. I’ve decided to work with much smaller companies, and hopefully build something from scratch, repeatedly. There is little co-relation between what I studied in college, what I was doing at ExxonMobil, what I am doing now and what I had dreamt of doing as a kid but this puddle of ideas and memories is what life is! I am just trying to keep it a notch above mediocrity, that’s all. A lot of my batchmates are now in the US for further technical study, some have switched jobs to get a step closer to their dream MBA college. I do appreciate the long term view that’s at play here but I have not been able to convince myself for I know for sure that I don’t know if my future self agrees with my present self’s decisions. So instead this year so far has been centered on a self generated problem statement – “let’s find an interesting problem to solve!”. Infact the primary audience of this blog is not you guys, ouch! but my future self so that I have no troubles answering the question – “what in God’s name was I thinking!” if it ever comes to that, and I know at some point it would. How this would all tie-up together is something I’m not worrying about, good-luck future-me!

I enjoyed the time in Bangalore, it was my first full-time job out of college, and I learnt a lot in the MNC setup that ExxonMobil provided. If I were to recommend  a fresher, coming straight out of college and clueless about life like most of us are, I would definitely recommend going for a corporate job, for it sets a solid foundation needed for a long professional career. Once the base is set, a job at a younger company hopefully would accelerate the learning and growth. So after 2 years of taking rounds of the parking lot, I am now ready to roll the windows down, get the music volume up and step on the accelerator to feel the breeze, and just to complete the metaphor, mind it that in Gurgaon, dust hits you first but eventually you’ll get to the good part.

More to follow on what I am doing currently and where, but after rounds of testing I’ve realized operations as a function is where I fit. I love analyzing business problems and come up with creative and yet easy-to-implement solutions. So that’s what I’ve been doing, got to it after a few iterations, and the best part is that the INTJ me loves to be at intersection of departments, not having to follow a routine and yet contributing to the overall growth of the company. It gets overwhelming at times but hey! there are no manuals for pushing a rock uphill, one has to JUST DO IT 😉

A lazy layover in Gujarat

I was in Gujarat last month for almost a week, the sole purpose was not travel, feels strange to travel to a far-off place and travel not being the top agenda, right? But we had enough time on hand, that we decided to cover a few places and the lazy layover became a fun leisure trip! I was actually accompanying parents as we all were helping my sister shift to Gandhinagar, where she has taken up admission in IIT-Gadnhinagar. I was lucky that parents had agreed to backpack in my style and we ended up covering a lot in the 3 days we had for traveling. Although, getting drenched in every 2 hours is not a great feeling but monsoons being off-peak season for tourists, we never had to wait in queues anywhere! I would still call it a win! Below is the itinerary you too can follow for a 3 day trip to Gujarat in the monsoons –

Here is how the trip was scheduled along with info on places we had covered in the respective cities –

Unlike other trips, this one was more focused on selfies and groupies clicked at the monuments, so, I wouldn’t go in details about the places we’d visited, but i am sure if you’re interested, you’ll find a lot in the above links! I would leave you with the gallery of the photos I managed to click, a lot of these ones coming from my lumia, which actually did a decent job. Can you spot the difference in quality without zooming-in? I can’t and that does make me happy!

Publishing an e-book

Today, I am publishing work from a new project that I’ve just taken-up. I’ve been working with my grandfather, evidently very excited about the whole thing, to release a set of e-books. There are 2 books in pipeline, a set of essays on family members, mostly family elders that I haven’t met but he has and the other one is his commentary on Indian history, with the two major chapters being on the 2 epic Indian poems – Ramayan and Mahabharat.

He had been thinking about penning down his thoughts from a long time and finally they have now taken up some shape n form. His essays started in his diaries, in Hindi ( हिंदी ), with an ink pen. I have taken up the responsibility of digitizing the essays, publish them as e-books and hopefully release a translated and edited version in English.

The below pdf is the online copy of the first printed book, which i would now translate in English, the title for this one is – अतीत का पुनरावलोकन  (phonetic – Ateet Ka Punravlokan) this roughly translates to “reanalyzing the past”

If you’ve published ebooks in the past, then do share your tips, would appreciate help in translating Hindi to English with some possible automation! One good tool that I’ve found for quick edits is Input Tool by Google, lets me edit text without having to search for the virtual Hindi keyboard. Also, I’ve come to realize this project would be a good exercise in revising my Hindi grammar!

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