Ways to Avoid Pitfalls in Choosing the Right GST Services
When dealing with your company invoices and supplies there are chances of landing into GST risk zones Follow these guidelines properly to avoid the same.
Deemed Supplies Areas
One of the most common risk areas is the deemed supplies aspect of your business. A deemed supply is the transactions which you will require you to give an account of your output tax, irrespective of goods or services involved. So do not be confused that your output tax is the only risk area you will encounter when dealing with deemed supplies. A capable and efficient GST consulting services for professional advice will save you from this trouble.
Free Goods Aspect
Your GST is expected to give a proper account and also remit output tax on the goods, provided the aggregate cost incurred by the donor exceeds a benchmark of RM500 per person in a business year. Some of the items that are easily overlooked are free services to customers, employee, hampers, gifts, etc. An expert firm on GST services will ensure you don’t fall into this trap.
Private Use of Assets
When a company uses a business asset or dispose of such freely for non-business purposes, it is understood that the company is not making a deemed supply in this situation and as such can choose not to lay claim on input tax. This is another prime area that needs expert advice from a GST consulting services firm.
Cost and Experience Recovery
This is another red flag area which requires utmost attention. It is wrong for you to think that your output tax only relates to the standard-rated supplies. The GST approach on the recovery of an expense from another party will solely depend on whether the party registered is acting as a principal or acting as an agent when acquiring the said expenses.
According to the Custom’s view on supply, it stated that recovery of such an expense incurred from another party (agent) by a registered person acting as the principal is a “reimbursement.” It means that the recovery of an expense by a principal as a “paying agent” on behalf of another is referred and treated as a “disbursement.”
Reverse Charges on Imported Services
It will require an experienced GST consulting service firm to break this down to the understanding of firms that deals in imported goods.
The amendment that was done in this regard addressed the administrative burden laid on the importer and the goods, and it says they can account for the reverse charges and the claim input on the tax credit within the same taxable period.
Although, many people still find it challenging to wrap their minds around the reverse charge effects as it could lead to an underpayment of output tax, which is an offense. However, if the reverse charge is correctly accounted for, it would not hurt the cash flow.
So, in case your company regularly deal with overseas services, you should endeavor to review the transactions and get the right GST advice.
It is advisable for companies to properly manage their GST obligations as expected in their business to avoid risks. Companies must be aware of all change in policies and laws regarding the GST.