prpri GST : Difficulties of Small Retailers and Composition Scheme GST : Difficulties of Small Retailers and Composition Scheme

It has already been 2 and half months since GST is implemented. It has brought a panic among small retailers during its early implementation that no supplier will provide them goods if they are not registered under GST. So the small retailers who make their livelihoods by depending on their small shops also took GST registration even though their turnover was less than 20 lakhs…all thanks to the rumors in the market and also some of the inexperienced consultants who wanted to fill in their pockets.

The cost of administration of GST Compliance is too high for small retailers so they end up with consultants who provide them registration and returns filing at a cheaper rates. Even many Chartered Accountants are not taking up GST work as the cost of compliance are too high as compared to the fees charged by them and retailers are finding cheapest way to get their work done no matter how inexperienced or lack of knowledge a consultant possess. There have been many consultants who rather possess little or no knowledge on GST yet are getting a good amount of GST work as they have understood the mechanical process of registration and filing GST returns. The small retailers are advised not to fall prey to cheap rates of consultants, if he possesses good knowledge and is an experienced consultant it is suggested to go for the same.

Also there have been instances where small retailers failed to opt for composition scheme before 16th August, 2017 and now they are left with no option but to file monthly GST returns. There has been a Press Release dated 09th September, 2017 that government may start composition Scheme again for Financial Year 2017 – 18 but it has not yet started.

Even GST help desk are suggesting that for the time being now wait for few days the option to Opt for Composition Scheme might get activated. So do not rush to file your GSTR 3B and GSTR 1 as the due date to file has already been extended and for those who still wish to opt for Composition can wait for the option to get activated for Financial Year 2017 – 2018.

The cost of filing monthly returns is quite high then that of the composition scheme. So small retailers are advised to opt for Composition Scheme and those who failed to opt for composition Scheme might wait for few days to get themselves registered under Composition Scheme.

Conclusion: Due to lack of knowledge among the retailers and even certain inexperienced consultants, retailers are the one who end up paying heavy prices, not in the short term but certainly in the long term. So retailers are advised to take guidance of the right experienced consultant who can help them not only with their GST returns and registration but can also help them to plan their business taking GST into consideration.

Author Bio

Qualification: CA in Practice
Company: P Z & Associates, Chartered Accountants
Location: MUMBAI, Maharashtra, IN
Member Since: 13 Sep 2017 | Total Posts: 5

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  1. Parthweb says:

    You must take the GSTIN Number of Mobile Operator as well as Mobile Recharge Distributor and take the credit on the basis of tax deducted by them and pay the required GST on rs.3/-(which is your share).

    Still I found there is a lot of ambiguity in this area of business which still requires clarification.
    Will update you in case there is any clarification on the same.



    Really mostly professional work relating to GST

    work is under the guidance of inexperienced consultant. Naturally it would harm the system.

  3. Prasad says:

    I am doing a mobile Recharge business. 

    Before GST the company is paid 15% service Tax on MRP Price 

    But After GST the company is paying 18% GST on the Base price. not on MRP Price. They asked to pay balance amount from Distributor and Retailer.

    I am Retailer how to pay this GST. I am having GST Number. But the same is not deduct from the Consumer.

    Example if one mobile operator MRP Rate is Rs.100/- then his base price is Rs.96/- and Rs,1/- to the distributor and Rs.3/- to the retailer. Now mobile company paying Rs.96*18% of GST. But for distributor and Retailer has no clue how to deduct and get tax credit. 

    Another thing for Goods the Retailer will collect the entire tax from the End Consumer and pay the tax.

    But in recharge  the Company is collecting the 96%(Base price amount from the retailer at the time of Recharge).

    Can you explain the logic and what amount deduct and pay from the retailer point of view.

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July 2021