Tag: gst

GST is imposed on the supply of goods and services and proffers business persons the benefit of claiming input tax credit deduction. With the introduction of Goods and Service Tax, the entire tax regime was simplified for businesses, promoting transparency and accountability. Resultantly, it led to the reduction of tax-related corruption to a great extent. Since SMEs contribute 50% to industrial output, let’s explore how and why GST is considered an advantage in India for such small businesses. Reasons why GST is important for SMEs Following are the advantages that SMEs can enjoy owing to the introduction of the GST regime: The upper threshold for GST registration Before introducing the Goods and Service Tax, any small or big business with an annual turnover exceeding Rs.5 lakh, mandatorily needs VAT registration. However, now, businesses with an annual turnover of more than Rs.40 lakh require GST registration. This threshold under GST has introduced conformity relief to many SMEs and start-ups in India. To avail benefits under the new system, individuals need to know how to register for GST online and plan their business strategies accordingly. Obtain tax advantages Multiple start-ups in India are a part of the service industry. Before Goods and Service Tax was introduced, businesses had to collect and pay an amount of service tax to the government. Under the new GST structure, business owners can cut out the VAT paid on the purchases and service tax on their sales. Let’s understand with an example - A start-up purchases office supplies of Rs.20,000 by paying 5%. It imposes a 15% service tax on services of Rs.50, 000. Presently, it has to pay Rs.50,000 x 15% Rs.7,500 without any deduction of Rs.1000 that has been already paid on stationery. This is a big blessing to the start-up industry who are primarily offering services. Simple online procedure for registration and GST filing Those days are gone when individuals had to run around tax offices to submit documents and acquire registration numbers. The government has introduced an entirely online filing process, making it convenient and quick for the borrowers. One can follow the steps to file their GST return online by taking note of a few basics. Start-ups are likely to gain many financial advantages with the introduction of GST. With an upper threshold for registration, flexible procedure, tax credit on purchases, GST has indeed brought relaxation to small businesses and companies in India. Revamp logistics According to the new GST structure, no entry tax will be charged on goods sold in any part of the country. This will further accelerate good movements across the country, thereby enhancing logistics. In addition, with the benefit of GST, small business owners don’t have to pay while importing goods from one state to another. Regulation of unorganised sector Before the GST was implemented, it was observed that certain sectors in India, such as textile and construction, were massively unorganised and unregulated. However, under GST, there are facilities for online payments, compliances and input credit only when the supplier has accepted the amount. This has brought accountability and regulations to these industries. Hence, the country will be one single market where goods and services can import and export freely, and there will be lesser conformity to deal with for start-ups. Businesses operating in the unorganised sector often face issues while furnishing documents, specifically, when they try to apply for a business loan. With the introduction of GST, the government aims to increase transparency and accountability to help small businesses opt for these credits with ease. These papers will act as legal proof and allow borrowers to avail loans easily. Individuals can also bypass the hassle of loan applications by looking for pre-approved offers extended by leading NBFCs like Bajaj Finserv. These offers are available on a host of financial products like business loans, personal loans, etc. that simplify the application procedure. One needs to provide their essential credentials to check the pre-approved offer online. With the implementation of all types of GST, the government is trying to ease the road for different operations undertaken by small businesses. The implementation of goods and service tax in India in 2017 has massively impacted the way start-ups and small organisations operate. It has eliminated many indirect taxes and propagated a unified tax regime. Moreover, it has smoothened the entire process of establishing and expanding business.

Tag: gst

Most Read

Basics Of Technical Analysis

Global Shipping Solutions: Unlocking Efficiency and Connectivity in International Trade

Pachuvum Athbutha Vilakkum: OTT Release, Plot, Casts & Review

Adam Lambert – Net Worth, Family, Career Details, and More