If you’re running a business that provides goods or services in more than one state, then you must be aware of the pain points of the GST input tax system. If you’re a big businessman and have GSTIN in all those states, it is not very difficult for you. But for all those small businesses who are still at the initial stages, it is the real pain.
What is Input Tax Credit?
The input tax credit is the credit that is received by the taxpayer after paying input tax. Input tax is the amount of tax that you pay at the time of making a purchase. Let’s say you’re a manufacturer - tax payable on your output (final products) is 400/-, and you’ve already paid 280/- as the tax on input (raw material), you can claim the input tax credit and you only need to deposit the balance amount e.i., 120/-.
GST rates vary and range from 5% to 28% and the usual GST rate on services is 18% which is very high and thus every business should definitely claim the input tax credit. But for claiming an input tax credit, you must have GSTIN in those states where you are selling your products or services if your aggregate turnover exceeds 20 lakhs in a financial year.
You can apply for obtaining GST registration in all those states but for that, you need to fulfill the certain requirements of authorities and a business address is one of them. This means you need office space in all those states where you want to sell your products. It is not so easy, setting up an office involves huge costs and commitments and not everyone can afford it. This is where you can use a virtual office and solve this problem. Many companies are already using virtual offices for this.
What Is A Virtual Office?
A virtual office is not a concept anymore, it is being used by many companies nowadays. It is a flexible and customized office solution that is not physically yours but still gives you access to all the benefits of traditional office space. It doesn’t involve long-term commitments. A virtual office is a very cost-effective solution and involves just a fraction of the cost. Anyone can easily afford it. Most startups nowadays are opting for virtual offices to set up their office and fulfill all the requirements at the initial stages.
How Can A Virtual Office Be Used For GST Registration?
It is one of the benefits of a virtual office that you can use it for obtaining statutory registrations. This means you can use a virtual office space for obtaining ROC registration, LLP registration, GST registration, Import Export registration, and other government registrations.
When you opt for a virtual office, you get a set of documents -
- Rent Agreement
- Latest Utility Bill
The rent agreement includes all the terms and conditions about the services, pricing, amenities, usage policies, renewal terms, etc. It is a notarized registered agreement.
In the NOC (no objection certificate), it is mentioned that the owners of the property have no problem and allow you to use this address for this specific purpose.
The latest Electricity Bill works as the address proof.
With the help of this set of documents, you can apply for GST registration and get it done smoothly. You can take virtual offices in all those states where you are selling your products and services and obtain GST registrations. So, this way, with a virtual office you can save a lot of money by claiming the input tax credit.
Other Benefits Of Virtual Offices -
- You can choose the most premium locations in the city without spending huge money which you couldn’t afford otherwise.
- Reduces your business cost to an extreme level.
- More flexibility. You don’t need to commit to long-term leases.
- You get access to meeting rooms to conduct your meetings or presentations.
- You get mail handling services, which means your virtual office provider will receive all your couriers & parcels and inform you in real-time.
- You get a local dedicated telephone line which will be directed to you.
- A professional receptionist is always there at your virtual office to greet your clients or business partner who visits to meet you.
At FlexiSpaces, we have a team of professionals who are experts in their field and dedicated to providing you the best virtual office services across India. Our centers are located in premium locations and equipped with all the modern technologies to add the maximum value to your business so that you can grow at a good pace.
Reach us out!