07-05-2004, 06:06 AM
Thanks Massood for your comments. But I didnt understand why deregistering is better. GST has a negative impact on cash as we need to pay GST. But this amount is recoverable.
As an example the revenue is 4,000,000 per year. And purchase is Rs 2,000,000 per year.
If the business is GST registered, it would charge 600,000 GST.
While its input GST would be 300,000. It would need to pay government the difference on a monthly basis and most likely before the customers pays.
So it could have a negative impact on cash.
And if the business deregisters (and assuming thier suppliers are over large and cannot deregister) its costs would increase by 300,000.
Please advise what the benefits of deregistration would be for the business?
Thanks
As an example the revenue is 4,000,000 per year. And purchase is Rs 2,000,000 per year.
If the business is GST registered, it would charge 600,000 GST.
While its input GST would be 300,000. It would need to pay government the difference on a monthly basis and most likely before the customers pays.
So it could have a negative impact on cash.
And if the business deregisters (and assuming thier suppliers are over large and cannot deregister) its costs would increase by 300,000.
Please advise what the benefits of deregistration would be for the business?
Thanks