Advantages of GST for small and startup firms - Tax Home

The Goods and Service Tax were launched on 1st July, 2017 in India. The GST bill was passed by the Lok Sabha and cleared by Lok Sabha. In this worksheet, we are going to discuss about the advantages of GST for small as well as startup firms in India. Hope you will understand these benefits and get registered for GST.

GST is the one tax to subsume all taxes. It will bring ‘One Nation, One Tax’ regime and startups and small firms will really enjoy its benefits. We are going to look at certain advantages of GST in India for small and start up firms.

GST can benefit your small and startup firm

GST is a destination based consumption tax levied on multiple stages of production and distribution of goods and services. It is a combination of various taxes such as entertainment tax, state & local tax, excise duty, surcharges and others. Here are the benefits of GST for all small and startup firms.

1. Starting a business is easy

GST made centralized registration for businesses that made starting a business easier. Before GST the businesses were supposed to have VAT registration from the state’s Sales Tax Department, which was quite hard for the businesses operating in multiple states to obtain and maintain compliance with VAT registration.

2. It is an integration of multiple taxes

Before GST, each state used to have a separate VAT rate, regulation, etc. and in addition to VAT and sales tax, there are others that businesses must adhere to like purchase tax, luxury tax, CST, custom duty, etc. But under the GST regime, many of the taxes are included and made into one tax. The taxes which are included in GST are VAT, CST, Entry Tax, purchase tax, entertainment tax, luxury tax, CVD, SAD, etc.

3. Beneficial for logistics

Logistics companies in India had to maintain various warehouses across states to avoid CST and state entry tax, but GST has united India by removing restrictions on interstate movement of goods. This has reduced the unnecessary logistics cost, which increase profits for startups involved in the supply of goods through transportation.

4. Privilege for startups and small businesses

Before GST, businesses that cross the annual turnover of 5 Lakhs used to have VAT registration and VAT payment as a necessity, which was quite confusing. But the problem vanished, as the GST came into the picture. As businesses, with the supply turnover of less than 20 Lakhs would not have to register for GST. Those who have a turnover of 20-50 lakhs, have to pay GST at a lower rate. This has brought the relief to startups and small businesses with the nominal turnover.

So, these are the common benefits of GST for small and startup businesses. If you are also holding a small business with the supply turnover of 20 -50 lakhs, then get registered for GST. Get your business GST, OPC, Private Limited, MSME and LLP registration in Delhi from Tax Home. They have a dedicated team of professionals, who will help you in the legal work of your business.

About the Author

The author of the article has an extensive experience in the field of GST In Delhi and LLP Registration In Preet Vihar.