Goods and services tax (GST) was implemented on July 1, 2017. Passed for further discussion to Rajya Sabha, the bill was passed by Lok Sabha members in 2016. Prior to its implementation, the citizens were aware of the discussions pertaining to GST. However, even after being aware of the same, individuals consider it to be an abrupt change in the tax regime of the country. That is why they have been quite apprehensive. In fact, individuals contemplate GST roll out to be detrimental to their businesses. Nevertheless, just like every other amendment, this too has pros and cons. GST exemption for small business owners is one of the many pros. Hence, herein, we list four of such changes that aid small businesses and startups in progressing. Take a look.
Eased the Process of Starting a Business
Starting a new business is not as easy as it seems. The risk factor is high. You need to manage various things. The venture is new, so you need to very careful with each and every expansion plan you think of proceeding with. The former tax regime used to add up to the hustle even more. Different states had different process and fees for registration of VAT and other taxes. Hence, complying with tax regime as per every state was quite difficult.
However, after the GST rollout, complying with tax policy has become as easier as it could have been. One can register their business for GST from anywhere. You do not need to stand in the long queues anymore. Most of the things related to GST like return filing, making invoices and similar can be done digitally. Moreover, the tax registration is standard and uniform amongst all the states. Furthermore, the process is centralized. New businesses no longer need to apply for VAT registration in whichever state they venture.
GST Exemption for Small Business Owners
Prior to the GST rollout, VAT registration and payments were mandatory for business with a turnover of Rs. 5 lakhs or Rs. 10 lakhs in some states. This was the biggest reason for muddle and convolutions. But GST exemption for small businessin India is a great boon, especially, for the ones who have just started up. They neither give nor take goods and services tax.
Subsumed Multiple Taxes
Undoubtedly, the biggest advantage of GST rollout is the elimination of various taxes. After the implementation of this indirect taxation regime, entertainment tax, luxury tax, purchase tax, value-added tax and similar have been subsumed. This has simplified the tedious process of tax filing, returning and registering.
Made Doing Business in India Simpler
Restaurants, software and hardware companies provide services and sell items. It was complex for them to charge both VAT and service tax rules. Now GST has integrated taxes and has broadly bifurcated them into two, CGST and SGST. Creation of invoices is easier than before.
