ECAS Business: Know the impacts of GST on the startups in India

GST is one indirect tax for the whole nation which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer.

Startups Stand to be benefited by GST

Impact of GST on startups :

Higher threshold for registeration

As per the current VAT structure, any business with a turnover of more than Rs 5 Lakh has to get VAT registration and pay VAT dependent on the state structure. Under GST , this threshold is 20 lakhs thus exempting many small businesses including startups. It has a composition scheme.

Startups can enjoy tax credit on their purchases

A lot of startups are into service industry i.e. they pay service tax. Under GST regime they can set off the VAT paid on the purchases with the service tax on their sales which they cannot under current regime.

Online simpler procedure under GST

The entire GST process starting from registration to filing returns and payments of GST is online. Startups do not have to run around to tax offices to get various registration under Excise, VAT, Service Tax.

Simpler taxation

Startups often work on tight budget and cannot devote resources to look after the various tax compliances under Excise, VAT, CST, Service Tax etc. GST will subsume all of this thus reducing the time spent for tax compliances.

May 26, 2018