The manner in which this government has used social media in a positive way to protect consumer interest is unprecedented and has never been witnessed in this country before, he said.
GST is a value added tax levied at all points in the supply chain with credit allowed for any tax paid on inputs acquired for use in making the supply. Therefore, it is the end consumer who bears this tax.
Before GST Registration Procedure
While starting a new business in India, businesses currently have to get VAT registration from the State’s Sales Tax Department. Since each State has different procedure and fees, it is difficult for businesses operating in multiple States to obtain and maintain VAT compliances.
After GST Registration Procedure
With the implementation of the GST, the registration procedure would be centralised and businesses would no longer have to obtain multiple VAT registration as a single GST registration would be applicable across the whole of India.
Currently, VAT registration and VAT payment are mandatory once a business crosses an annual turnover of Rs.5 lakhs in some States while Rs.10 lakhs in few others. The multiple VAT legislation enacted by each State creates confusion and complexities. Once GST is implemented, businesses with a turnover of less than Rs.10 lakhs would neither have to register nor pay GST. Further businesses with an annual turnover of Rs.10 – 50 lakhs may have to pay GST but at a lower rate.
Therefore once GST is rolled out, thousands of Startups having an annual turnover of less than Rs. 10 lakhs would be exempted from collection and filing of GST returns.
New Act on Cards
The Prime Minister said consumer empowerment would be the focus of the new Consumer Protection Act being formulated by the government, which would redress grievances in the shortest possible time and make more stringent norms for curbing misleading advertisements.
“Protection of consumer interests is a priority of the government. This is also reflected in our resolution of New India. Moving beyond consumer protection, New India will have best consumer practices and consumer prosperity,” Modi said, adding that a Central Consumer Protection Authority would also be set up with executive powers.
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 startup sector in India.
Mentioned below are three key ways in which Indian startups will benefit from the new taxation regime:
Ease of Doing Business
Firstly, the rollout of GST will certainly uncomplicate the way, a business is executed in India. Centralised registration and uniformity in the process will make, starting a business and expand it in different states 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, pertain to online tax processing.
Furthermore, the plain sailing model of GST FILLING , 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 skyrocketing transportation costs. Now, all the check-post issues will be resolved, circumventing those uncalled for stoppages, ensuring a smooth movement of goods.
Higher exemption for 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 tax reform that ensures reduced costs and streamlined economy.
All businesses, as of now, be it goods or services, have to comply with various VAT and service tax regulations across the state, which only adds to the complexity of the whole procedure of running a business. With the introduction of GST, the difference between goods and services will be gone. Also, invoicing will be easier for businesses since there would only be one rate across.which will certainly ease up the process for start-ups,
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