Have you recently heard what the ministers had said about GST in the Union budget 2017? The correct news says that GST will be implemented in the upcoming monsoon season. Even after it had taken a lot of time to be passed in the two houses of parliament, the time has comes when the multi layered taxation system is about to be ended for businesses. If you are a small or medium enterprise owner, you must have felt glad on hearing that. It is indeed, a big change in Indian taxation system which requires significant constitutional amendments as well. If you seek economic integration of the economy of your country, you must surely be supporting the move. But do you know how other startup owners are looking at the GST impact on small business? Since it is the biggest indirect tax reform, the reaction is expected to be huge as well. People have got the answers of challenges to be tackled by the complicated tax system and the related business transactions. While it has made the tax compliance easier, it can be considered as a influential move for the developing economy of India.
Excitement of SMEs about GST
Goods and Services tax to be paid will be payable at the transaction value and will have the two components to be administered by central as well as state government respectively. Other than simplification of the tax system, there are many other reasons why small business owners are highly excited about the recent GST information in India. Here are some of those reasons well cleared for your knowledge:
- They can easily start new businesses: It happens that people look forward to start their small businesses, but hesitate to do that just because of the complications in the legal processes involved. For a new business, they need to get the VAT registration covered for Sales tax. And if you are one of those who want to run your business in several different states, there are complicated issues there as well. But with GST, it will make it easier for you to expand and run your business in different Indian states. It is indeed, a favorable GST impact on small business.
- Tax Burdens to be Reduced for New Businesses: If you are doing business for a long time in India, you must be paying tax if your turnover is crossing five lakh through VAT registration. GST bill is also increasing the turnover limit to a higher value for sure as per latest GST information in India. Not only this, you will also get reduced tax rates for even higher turnover of your business. This means that the load of taxes is likely to be reduced for your benefits.
- Lower logistics cost means Tax Neutrality: If the goods supplied to and from your business location has ever got delayed, this might have happened because of the border tax and check post issues in doing interstate business. But with GST, such interstate business movement will become less cumbersome and less expensive too.