How can GST affect your business?
How can GST affect your business?
GST or the Goods Service Tax is a type of indirect tax that has largely replaced many indirect taxes in India and also subsumed them lessening the burden of the tax. The Goods and Service Tax Act passed on 29th March 2017 came into force on July 1, 2017. GST is an indirect tax that is applicable throughout the country. GST is a tax that applies to both goods and services. The Goods and Service tax enables smooth tax collection, has reduced double taxation, and improved the efficiency process.
GST has revolutionized the Goods and Services market in India. If you are a business owner or you are planning to start a business you may wonder how the GST will impact your business. Here’s a quick guide on how GST can affect your business.
Simplified Calculations: Earlier the business owners had to keep a track of the variety of taxes and the payment deadlines. You may need to conduct comprehensive research to locate and manage the tax filings and the documents. This makes the tax filings process tedious and time-consuming. GST has made the calculations much easier for businesses so that they can calculate the taxes easily and stay compliant with the tax payments.
Low Burden of Taxes: Earlier the businesses with a turnover of more than Rs.5 lakh were required to pay the VAT (in most of the states) please keep in mind that the limitations are different in different states. The service providers that have a turnover of less than Rs.10 lakh are excluded from the service tax as well.
Prevent Fraudulent practices: GST is a filed virtually which improved the manual filing loopholes of the previous tax systems. Tax fraud is much easier to detect as the transactions are more transparent and accountable. As GST returns are filed online they are easier to be rectified.
Easier to start and business expansion: Earlier registering a business with various departments such as VAT, service tax, excise, etc. For different states the formalities and the documents required were different. But now registering a new business has never been easy as there is a single point of registration. GST input credit is made available for all interstate and intrastate transactions to increase cross-border business.
Differentiation of Goods and Services: The Goods and Service Tax ensures that the goods and services are distinguished. This has made many legal actions easier. Ans has significantly reduced tax fraud.
GST implementation has been one of the greatest decisions of the Indian Government as it has eliminated the need for different tax rates at the central as well as state level. There are many benefits of GST for small and medium business owners like lesser compliances, improved efficiency, composition scheme for the business, etc.
You can always seek assistance from the professional to obtain registrations, complete the necessary procedure and file the returns, and complete the other formalities.
