Central hall is a legendary room in the parliament, where first Prime Minister of independent India, Jawaharlal Nehru delivered his famous ‘tryst with destiny’ speech, on momentous occasion of India’s quantum leap of independence from the British.
Following his footsteps, during a special parliament assembly, on the night of 30 June 2017, Indian Prime Minister, Narendra Modi, addressed the nation and launched the Goods and Services Tax in the same Central hall, freeing India from the shackles of an obsolete tax system and, implementing GST across the country. Cutting the first turf towards the vision of ‘one nation, one tax, one market’
Perceived as one of the major tax reforms since 1947, Goods and Services Tax is set to bring forth, unique facelift of the nation, from a political union to an economic union of 29 states and 7 union territories.
We all know that post GST, India will only pay a consolidated tax, against a plethora of taxes prior to GST. This will help in streamlining and simplifying the whole process of indirect taxation in India. However, what we do not know about is GST’s benefits to different sectors of the industry. In this post, we’ll be unfolding some benefits of GST, for the startups sector in India.
Mentioned below are three key ways in which Indian startups will benefit from the new taxation regime:
Ease of Doing Business
First and foremost, the rollout of GST will certainly un-complicate the way, a business is executed in India. Centralized registration and uniformity in process will make, starting a business and expanding it in different states a tad-bit simpler. Since startups lack the resources to hire finance professionals or a dedicated team for handling varied forms of tax compliance, GST’s objective is to simplify the tax regime by reducing the multiplicity of taxes.
This will not only induce a dramatic reduction in compliance costs but also make taxation transparent, pertaining to online tax processing. Furthermore, the plain sailing model of GST filing, in addition to the availability of various online GST filing software’s will enable startups to complete a number of taxation tasks, from registration to claiming refunds, all by themselves, thereby, saving money and resources.
Lower Transit costs
The biggest advantage of GST is that it eliminates those irksome border taxes, which consume a significant amount of time, delaying the deliveries and sky rocketing transportation costs. Now, all the check-post issues will be resolved, circumventing those uncalled for stoppages, ensuring a smooth movement of goods.
Higher exemption to Small businesses
Now, this can be deemed as its USP, GST offers an exceptional feature, which is the composition levy. Composition levy is a taxation subsidy in GST filing, exclusively for small businesses with turnover between 20 to 50 lakhs. It empowers them to pay lower taxes, bringing respite from tax burdens to newly established businesses.
From the looks of it, GST appears to be a radical taxation reform that ensures reduced costs and streamlined economy.