Hello hello! Who wants to listen to a small-business-struggles-with-GST story? Gather around. This is good fun.
I did some work for a client in February and March, 2020. Raised an invoice promptly on March 1st and April 1st respectively, for the previous month's work. They typically pay within 2 weeks. But, they have NOT paid both these invoices.
On March 20th and April 20th, I have paid 18% as GST to the government. Because GST payments need to be made on the month of raising of invoice, not on receipt of payment. (P.S: This is *eighteen* percent. This could be the entire profit margin for some companies).
In India, from most clients, payment coming itself is a big deal. They'll pay 30-60 days from invoice. If the client screws you, you have to file something else later to get this money back and good luck with that!
Anyway, if you know the GST regime, you know it's a bit like TDS. While paying (GSTR-3B), you just pay the lump sum. This is monthly. While filing (GSTR-1), the credits go to the corresponding client. This can be quarterly.
The due date for filing (GSTR-1) was April 11th. What with the pandemic and everything, I missed the deadline. (REMEMBER: I've paid the money. Just haven't filed).
Now, the client is saying, they'll pay me only when they get credit for the invoices that they HAVE NOT paid me for. So, I'm forced to give them 18% of my invoice value as credit, before they pay it!
For the uninitiated, for every 100 Rs. I earn, I am cornered into first paying the client Rs. 18, only after which they'll pay me Rs. 118. Government allows me to file GSTR-1 quarterly, but clients are withholding money for a quarter because of this!
If this isn't ease of doing business, I don't know what is! <end>
