Business in India were booming nowadays whether it is a small enterprise or a large everyone is finding a new way to achieve success in business where the government has been implementing a few systems for business the GST which become a world popular news nowadays. This has been implemented in India which is the biggest indirect tax reform in the country since independence. However, complying with this tax reform may be a bit complex at first for all businesses enterprise. This article explains impact of GST on business Enterprises. GST has promised to revolutionize the Indian tax system.
So, what is GST?
GST is nothing but the Goods and Service Tax bill ( which is commonly known as GST) is implemented by the government from 1st of July’17. GST is meant to bring every indirect form of tax under one roof. GST will assist and ease the process of starting a business in India. Earlier, every business in India was required to obtain VAT registration, which differs in every state, and the rules and regulations are different. The tax can be paid with one consolidate tax instead of the going of taxes such as State Value-Added Tax (VAT), Central Excise, Service Tax, Entry Tax and a few other indirect taxes. Now GST is the common Goods and Service Tax bill for all over in India. The Goods and Service Tax bill impose on the one state to the other state supply of goods and services by the Centre is Central GST (CGST) and that by the States is State GST (SGST).On inter-state supply of goods and services, Integrated GST (IGST) is collected by Centre where the IGST is also applicable on imports of goods.
why GST registration?
The person who sells goods and provides service more than 20laks in a financial year must seek registration under GST.
GST Impact on business
After launching GST there is both prons and cons in so many business enterprise . Learn few things related on GST by below story.
- The GST will be a bit easier for a start business firm because a lot of businesses operate in multiple states, and this complicates their tax burden because all the states in India follows different tax rules which leads to effect in sales growth of business. By introducing and implementing GST common procedure everyone can easily able to do the common tax which means every state has the common tax benefits, thus easing out the process to start a business in multiple states and get clear idea on tax . The GST this will be eliminated as tax credit can be transferred irrespective of location of buyer and seller. The small business enterprise will be able to expand their business across borders.
- GST reduce the tax burden and there will no confusion between a service and goods in India. The India’s GST will be different than other GST regimes globally. If we see the GST comparison in India and to the other countries few major differences will appear.
- One of the main benefits of Goods and Service Tax bill is that the place of supply rules for goods and services is now the uniform across the country but this means that every business needs to comprehend how place of supply can impact their business. So, depends on the business everyone need to comprehend what the place of supply rules and regulations are so, you can charge the right components of the Goods and Service Tax bill.
- GST impacts on the working capital which is very significant for any business concerns. However every businesses can use GST to tackle their working capital. They can harness GST to their advantage.
- Everyone will be under a uniform taxation system. As a result, a large number of SMEs and start-ups would come under the net of the GST tax. The GST will be applicable to the applicable to alcohol and petroleum, thus widening the gap between these products and other products These and a few other minor concerns are looming around minds of small and medium businesses.
There is a change for enterprises on moving to GST because it introduces a complete overhaul of the tax rules and returns. Overall, this is a net benefit for businesses because it creates a single set of rules for the sale of goods and services and creates a single tax regime.
Author bio
Selvaraj Rangaswamy is a Founder and CEO of Blue cubes Technologies. He is graduated in the university of Madras, Chennai. He is a passionate blogger and traveler. Blue cubes Technologies is a software development company launched a product called Roosboard which is a business intelligence dashboard for enterprise to make quick analyze of data with search based analytics. Visit Roosboard.com to know more about business dashboard.