Has GST Impacted SMEs Positively In India?
The taxation system of India was transformed on 1st July 2017. They introduced Goods and Service Tax (GST). It affected all the spheres of India, be it business, individual or the entire economy of the country. GST was presented to collect indirect taxes from the Indian population in the most transparent way possible. It was not only complicated but a revolutionary change for the SMEs although it turned out to be a good one for SMEs as it aimed at boosting the growth of SMEs. Thus, if we talk about how have GST impacted SMEs, the answer is always positively, helping them reach their best business potential.
Impacts Of GST
The earlier taxation system in India was confusing. Different governments differently taxed the goods and services, but with GST, the taxation system was simplified as it was One nation-one tax policy. Hence, GST eradicated much paperwork and aimed at becoming a transparent way of collecting taxes from businesses and individuals.
GST was more comfortable to administer by streamlining the indirect tax processing. The multiple levels of taxation system were not just and hence made it difficult to do business in different cities as different governments charged various taxes.
How GST Impacted SMEs
The small and medium Enterprise (SME) accounts for 45% of the Indian economy, and thus, become the backbone of the country. SMEs account for 45% of total manufacturing and hires 40% of the employees. Therefore, GST must have impacted SMEs big way.
GST simplified business registration process as one tax policy throughout the nation. Otherwise, SMEs had to face many hurdles as different states had their taxation policy. Now, with GST, it is easier to expand the business to different states.
The unified tax code has reduced the startup cost as the government replaced its taxation policy. Now, the businessman can focus on his business more than worrying about the different taxation policies.
GST brought down the logistics cost as it cut down the state border tax, which is suitable for businesses. Now, the SMEs can supply their goods to other states easily.
GST number can be applied when the business turnover is more than Rs.20 lacs per annum. Hence it took away all the hurdles faced by small entrepreneurs; thus GST impacted SMEs positively in all ways.
GST filing system is an online process; thus, you don’t have to visit the government offices and waste your time. You can register your GST number online, and file returns online, thus sidelining the bureaucracy.
It is how GST has impacted SMEs. Many youths are willing to invest in their start-ups, which will boost the economy of the country significantly by the year 2020. The number of startups in India will increase to 10,000.
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