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GST facts: important things that SMEs should know about GST

18 Jul

GST facts: important things that SMEs should know about GST

Goods and Services Tax or (GST) has been covering headlines in most of the news channels for past few days, and why it shouldn’t as it is the very first major tax reform that India has seen after independence. There were a number of people in support of GST and were constantly poking the present government to bring the idea of one nation one tax to life. Well, GST has completely changed the market face, and the way businesses are used to work, but still, it is a bit difficult to speculate whether GST will have any side effects or not. So, far things are running quite good. There is no question on impact as it is the Small and Medium Enterprises that has been impacted greatly by GST implementation. So far GST has proved to impact the nation in a constructive way, but one should also know that there are also some unfavorable results because if GST. Big and well-established enterprises might not have felt any comfort issue because of GST, but SMEs surely have. Still business is adapting to the change that has been brought with GST, therefore if you are expecting a verdict at the end of this article, you will be wrong. One can only guess its effects in the long run, and by the way that GST has affected the market, it can be said by speculation that GST holds the capacity of putting the Indian economy on the right track.

If you are looking for ways in which GST will benefit SMEs, then you should keep reading the article to know “how will GST impact small and medium enterprises.”

Starting a new business is easier
Any business that has operations running in different states used to need VAT registration (under the state laws). Since earlier taxation rules used to vary a lot in different states, therefore, the whole process was complicated and needed high procedural fees. However, with Goods and Services Tax, things are simpler as it has introduced centralized registration option, which has made it easier for SMEs and people with desires to open their businesses. Even expanding business will be a lot easier in India.

Faster delivery and logistics
In the GST regime, there won’t be any entry tax (taxes charged on goods sold and manufactured) which will ultimately result in faster logistics and delivery of goods and services though almost all the interstate points. This will, in turn, help e-commerce in the best way possible and finally, customers will be benefited.

Well, there are a number of other benefits that SMEs can utilize efficiently, but similar to any other thing Goods and Services Tax also has some negative points. Most of the SMEs don’t have any computer or IT team working with them, and since the system has completely been transferred online, therefore SMEs will have to seek for third-party help, which will eventually result in an extra burden on the pockets of business owners. It is a bit difficult to generalize the benefits and drawbacks of GST for every industry.

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