Today in this article, we discuss on the GST impact on small business. And how the small and medium businesses are affected by the new GST rule?
Small and medium businesses are the fundamental growth drivers of the Indian economy with more than 2 to 3 million small businesses operating in India, contributing to almost 42% of India total exports and 50% of the industrial output.
Goods and services tax will increase the taxpayer base by leading more small businesses under its range, and will definitely pass on the load of compliance and related coasts to them.
However, one day goods and services will turn these small businesses more competitive, and level the playing field between small and large businesses. In addition, these Indian small businesses would be able to compete with other country competitors from cheap coast centers like Bangladesh, China, and Philippines.
Here are some other ways in which the eventual implemented tax system is likely to affected small businesses and startups.
Here we give some positive impacts and negative impacts of GST on small businesses:
- Ease of starting business.
- Market expansion.
- Elimination of distinction between goods and services.
- Reduction of tax load on new businesses.
- Improved logistics and faster delivery of services.
- Registration woes.
- Concept of casual taxable person.
- Working capital blockage.
- Technological challenge.
- Compliance rating.
- Added compliances for exports.
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GST Impact on Small Business