Final answer:
Having a GST clearing CR/DR balance depends on the specific circumstances and goals of the business.
Step-by-step explanation:
Having a GST clearing CR/DR balance depends on the specific circumstances and goals of the business. Both scenarios have their own advantages and disadvantages.
If a business has a clearing CR/DR balance, it means that the amount of GST credits they have claimed is greater than the amount of GST they have collected. This may indicate that the business is purchasing more goods and services than it is selling, which could be beneficial for businesses that rely on significant inputs or have a high cost of goods sold. In this case, the business will receive a refund from the tax authorities for the excess credits.
On the other hand, if a business has a clearing DR/CR balance, it means that the amount of GST they have collected is greater than the amount of GST credits they have claimed. This may indicate that the business is selling more goods and services than it is purchasing, which could be beneficial for businesses that have a high volume of sales. In this case, the business will be required to remit the excess GST collected to the tax authorities.