GSTTaxation

Impact of GST On Small Business Enterprises

What has been the true impact of the GST on SMEs? It's been a mixed blessing. Keep reading to learn more.

Voiced by Amazon Polly

Indirect taxes on goods and services have been consolidated into a single tax with a single return filing system. Dealing with tax authorities is also easier with a unified tax such as GST. Because GST imposes a single tax on goods and services across India, it eliminates the complexities produced by the overlap between Central taxes (excise duty, customs duty, service tax, and so on) and State taxes (VAT, purchase tax, luxury tax, and so on). All in all, the GSTN portal has made it easier for small enterprises to submit and pay taxes.

Benefits of GST for Small Business Enterprises

The cascading impact of taxes was successfully abolished by GST, making the tax procedure clear for SMEs and lowering their tax burden. Furthermore, because the complete GST procedure is online, it saves time and effort.

For SMEs in the transportation industry, the conventional tax structure was a huge headache. Because of the interstate entrance points and checks, the cars had to spend a lot of time in long lines. Fuel and labour expenditures were lost as a result of this. The fact that the GST replaced the Central Sales Tax with the Integrated GST or IGST, as well as the check-post and border levies, has had a considerable influence on small businesses. This has inadvertently aided the industry in lowering delays and transportation costs, allowing for speedier and more frequent interstate travel.

Dilemmas of GST for Small Business Enterprises

Since not all SMEs have the technological know-how to cope with online-based GST mechanisms, the majority of them will have to rely on professionals to get registered. However, this predicament can be tackled at a hassle-free and affordable pace with the help of the experts at Vakilsearch.

GET ONLINE GST REGISTARTION NOW

To add to this even small businesses that engage in e-commerce operations should register for GST, regardless of their yearly turnover rate. E-Moreover such enterprises, unlike other types of businesses, will not be eligible for threshold exemptions or the Composition Scheme (which allows firms to file their tax returns on a quarterly basis instead of 3 times a year and pay taxes at a much lower rate). This is a rather regrettable setback small businesses face under the GST regime, especially in the digital era.

The Bottom Line on GST for Small Business Enterprises

Without a doubt, GST is intended to expand the taxable base, mostly through SMEs, and will impose a compliance burden and related expenses on them. However, in the long run, GST will make these SMEs more competitive by creating a level playing field between them and large corporations.

Did you know that businesses will be required to register for GST in each state in which it is engaged in business?  If your company sells or provides services in three states, you’ll need to register for GST in each of those states to legally conduct business. For help get in touch with our experts and become GST compliant today!

Also, read:

 

0

Back to top button

Adblocker

Remove Adblocker Extension