Business Challenges: GST Suspension, Stock Transfer & Merchant Payments in India

Doing business in India? Then chances are you’ve already heard whispers—or perhaps felt the sting—of Goods and Services Tax (GST) suspensions, tangled stock transfers, or delayed merchant payments. For many entrepreneurs Internationally from Singapore, the USA, Japan, Australia, and the UK, these aren’t just operational annoyances. They’re the difference between smooth expansion and weeks of firefighting.

India’s tax ecosystem isn’t simple. But with a little foresight and the right support, it doesn’t have to be overwhelming either.

GST Suspension: A Silent Business Killer

You know what really trips up startups here? A GST registration that suddenly gets suspended. It’s almost like being locked out of your own financial system.

Why does it happen?

• Missed returns, even by a few days.
• Inconsistencies or red flags in filings.
• Unresolved GST notices that just sat unread.
• You can't issue valid tax invoices.
• Input tax credit? Frozen.
   

And your vendors start getting nervous, because they can’t claim credits either.

What happens next?
It’s a chain reaction, and one that's avoidable with a bit of discipline.

Smart move? Automate filings using tools and assign someone to check the GST portal weekly. Seriously, even a missed email can cost you.

Stock Transfers: Not Just a Warehouse Problem

You might think shifting stock between warehouses or from your head office to a distribution centre is simple. It isn’t, especially under GST.

Two scenarios you need to track:

• Across states, GST is charged (IGST), and yes, even if there’s no sale involved.
• Within a state: Still taxable under CGST and SGST.

That means every transfer needs an invoice—even if you're just moving boxes around internally. Miss a step here and you’re not just out of compliance. You may also lose input credits or face delays during GST audits.

Helpful tip: Sync your ERP with your GST software. Reconciling physical movement with tax filings might sound tedious, but it’s way cheaper than paying penalties later.

Merchant Payments: Where Cash Flow Meets Chaos
Payments. You keep going because of them, don't you?  But in India, it's not always as easy as you may think to collect money, particularly using wallets, UPI, as well as cards.

Common hiccups?

• TDS is deducted by payment gateways without clear visibility.
• Settlement delays that mess up your cash flow forecast.
• GST on service fees that get buried in transaction logs.
   

Let’s say you process Rs 5 lakhs this month. The settlement you receive might be ?4.75 lakhs. That difference includes GST, gateway commission, and sometimes TDS. However, you'll file false returns if you don't track and match each payout along with the charge.

Why Global Founders Should Pay Attention

Let’s say you’re based in Sydney or Chicago or any other part of the globe and want to launch a SaaS product in India. You start collecting payments, run a warehouse in Bengaluru, and link up with an Indian logistics partner. If you don’t plan your GST structure well, mismanage a few transfers, or leave your merchant account reconciliation messy, your books will bleed quietly.

That’s not a scare tactic. That’s just what happens when you focus on growth but skip the compliance prep.

Final Word: Handle the Boring Bits First
You can’t ignore tax filings and assume everything will just sort itself out. India rewards attention to detail. And if you're setting up here from overseas, having an experienced hand guide your GST, stock processes, and digital payments is more than helpful—it’s necessary.

Company Bio: PKP Consult works with global entrepreneurs—from Singaporean trading firms to Silicon Valley-funded startups—making sure they aren’t just registered, but really ready. Through expert GST Consultancy and Regular Compliance services, and hands-on support for Business Setup in India, we help you stay clean, compliant, and confidently positioned for long-term growth.