By candbindia GST & Indirect tax, Uncategorized 0

How GST Will Impact Business

GST – Goods service tax is a tax procedure followed in India from July 1st 2017 on the supply of goods and services to avoid multiple taxes by the central and state governments.

GST is composed of three different goods and services taxes :

CGST : Revenue is collected by the central government
SGST : Revenue is collected by the state government
IGST : Revenue is collected by the central government concerning inter-state sales

In this post, we mainly focused on how GST impact various business.

1. Easier to start a new business:

Earlier if you want to register a new business, different states need separate Tax registrations and different tax rules in different states added complications and also resulted in a high procedural fee. Now, GST enables a centralized registration that will make starting a business easier and the consequent expansion is an added advantage for SMEs.

2. GST offers greater allowance to your Small Business:

Only businesses with turnover more than Rs.20 Lakhs are liable to pay GST whereas earlier any business with a turnover of more than Rs 5 lakh (in most states) was liable to pay VAT. Thereby GST regime exempts small businesses and service providers from tax compliances.

3. Composition scheme for small businesses:

Under GST, small businesses with a turnover up to Rs.1.5 Cr can benefit as GST gives an option to lower taxes by utilizing the Composition scheme. This has brought down the tax and compliance burden on many small businesses.

4. Easier, Better and Timely Compliance:

Returns are unified under GST which makes filing of returns easier and better as under the VAT regime, the

8. Enhanced working capital:

In the previous tax regime, Input tax credit on Capital goods purchased was not possible to claim in a single Financial Year. GST ensures that the claim of input tax credit can be availed in the same year of purchase which enables the small taxpayers to have sufficient working capital.

9. Reduced Logistics Cost:

The E-way bill system under GST ensures faster & efficient transportation and better tracking of movement of goods across and between states.

E-way bills will also reduce the logistic cost. E-way bill would reinforce proper invoicing and along these lines would reduce tax avoidance.

10. E-Invoice:

Under the e-invoice system of GST, invoices prepared by a supplier are tracked on a real-time basis. Thereby reducing manual errors in invoice making and facilitating faster availability of input tax credit to the buyer. Thereby minimalizing tax evasion.

How can we help you?

If you own a business you will be wondering how GST will impact your business. We at Consulting and Beyond, our professionals help you in GST registration, filing and refund process.

The different state requires different procedural compliances.

5. Save time:

Since all indirect taxes have been consolidated into a single tax regime – GST, it reduces the compliance burden and helps in timely compliance.

6. Fraud Prevention:

Under the GST system, Input Tax Credit can be availed only if the supplier pays outward tax for that supply. This ensures the glitches are minimised in claiming the input tax credit.

7. Free Flow of Credit:

Under the previous tax regime, a retailer cannot avail input tax paid on manufacturing services (excise duty credit) and Tax paid for availing various services were also not able to be claimed. Whereas in GST, any registered person can avail input tax paid on Manufactured goods as well as for the services availed.