4 Essential Benefits of GST for Small Businesses & Start-ups
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Benefits of GST for Small Businesses
In India, GST was implemented to simplify the tax assessment process. To make the compliance process easier, GST was formed with the tagline “One Country, One Tax System.” In this blog, we will look at a few of the key elements of the Goods and Services Tax implementation process for new firms in India.
A Quick Overview of Goods and Services Tax
A value-added tax is the Goods and Services Tax. It covers all stages along the supply chain, right from the manufacturer to the final consumer. As a result, the tax will be borne by the end customer, as the final person/entity in the supply chain. India’s indirect tax structure has been made simpler by the Goods and Services Tax. Both the federal and state governments are subject to the tax framework. It will also replace India’s present many levels of complex taxes.
Here are Four Benefits of GST for Small Businesses and Start-Ups
GST will be a single tax covering all major indirect taxes. As per an evaluation of the GST’s impact on start-ups, they will likely profit.
1. The widespread use of online registration
Other taxes, such as Excise Duty, VAT, Services Tax, Sales Tax, and so on, have been absorbed by GST. As a result, the main benefits are fewer tax filings and uniform formats. This saves a lot of time and paperwork. Although many states have different registration needs, the process is the same: it is done online and verified. Due to the ability to manage the majority of uploads online and with digital signatures, the GST registration also reduces the amount of manual paperwork.
2. Access to a single national market throughout India
It has major advantages for small firms. Most firms were required, under the previous tax system, to maintain substantial distribution and logistics networks since these networks were built to satisfy the requirements of state level tax reduction. Under the new approach, corporate requirements will drive distribution and logistics networks, allowing smaller firms an equal opportunity to compete with larger ones. For smaller firms looking to increase their national footprint with little expense, this single market throughout India will be a huge benefit.
3. It prevents taxation from cascading
Tax cascading is no longer an issue owing to the GST, which was formed to bring all major indirect taxes under one roof. For small firms, this means greater immediate savings. All indirect taxes were rolled into one with the Goods and Service Tax. In simple terms, the cascading effect was Tax on Tax, and the ITC (input tax credit) was introduced as a great benefit to firms to mitigate this.
4. Increasing the GST Registration barrier for Small Firms
Given that the registration limit is Rs. 40 lakhs, many small firms, mainly start-ups, are free from paying the GST. As a part of benefits of GST for Small businesses it offers a lower tax rate for small firms with a turnover of between 50 lakhs and 1.5 crore, notwithstanding the fact that it is optional. This is refer to as the composition plan under the GST. This will also reduce the tax burden on startup firms.
The GST has helped several sectors of the Indian economy. The benefits of the Goods and Service Tax also vary based on the sort of business you run.
Komplytek is a well-known GST consultant providing services to clients spread across industries and geographies. We provide our clients with entire Goods and Service Tax solutions, such as:
- Obtaining a Goods and Services Tax registration
- Preparing and filing GST returns on a monthly or quarterly basis.
- Providing advice on a variety of subjects
- Preparation and filing of Goods and Service Tax refund applications, as well as follow-up
- Preparation and submission of yearly tax return
For Assistance in Managing your Small Business Accounting.
Get in touch with Komplytek today!
