The introduction of GST in the indirect tax system has been much needed for the country of India. In this case, one single tax has turned out to be the very complex system of multiple taxes, which GST has been having a lot of impact upon businesses, consumers, and the economy of the nation.
In this blog post, StartupFlora elaborates on the major impacts of GST by explaining the benefits, challenges, and ways of doing business through these new waves of tax regulations.
Understanding the Goods and Services Tax (GST)
GST is a consumption tax imposed on the supply of goods and services based on destination. It also happens to be a comprehensive, multi-stage taxation levied at every level of value addition. Thus, subsumes of indirect taxes, either excise duty or VAT or service tax, GST has simplified the gamut of indirect taxes applicable in India.
Implication for Businesses
Summing the changes GST brought about for businesses on the positive and negative sides;
Positive Changes
It ended a complicated web of multiple indirect taxes, thus creating a streamlined tax structure in place. This has allowed easier compliance and reduced administrative burden on businesses.
Higher Efficiency:
GST has removed the cascading tax and hence the overall tax burden on goods and services has reduced. Due to this, the efficiency of the supply chain increases, and cost on businesses has reduced.
Improved Competitiveness:
Through cost reduction in production, GST has resulted in more competitiveness of the Indian business in the world market.
Ease of Doing Business:
GST has streamlined the regulatory regime; in consequence, it is much easier to do business. This new tax environment can help businesses expand much faster.
Online Compliance:
All GST registrations are done online, and all returns also can be filed through this portal.
Challenges:
Technological Adaptation: For most businesses, especially small ones, it is tough to adjust to new technology and the process needed for GST compliance.
Increased Compliance Burden: While GST has streamlined the tax structure, it also introduced a new compliance by requiring the filing of multiple returns and keeping detailed records.
Issues related to teething during initial rollouts: Some of the teething issues that have accompanied the initial rollout of GST include technical glitches on the GST portal and confusion over some of the provisions.
Effect of GST on Consumers
GST has impacted consumers in a number of ways :
Transparency in Pricing: GST has made pricing transparent because tax will be specifically reflected in a bill.
Low Prices: Cascading tax effect is gone and many products or services have declined.
Higher Choice for Consumer: GST has made the playing field leveled for all business houses across states and this has brought more competition as well as choices to the consumers' doorstep.
Effect of GST on Indian Economy
GST has impacted the Indian economy positively.
Higher Tax Collection: GST has broadened the tax base and improved compliance hence resulting in higher collections of taxes for the government.
Boost GDP growth: GST has enabled the smooth running of the economy hence furthering the cause of GDP growth.
Healthy investment climate: GST has brought about a tax environment that is stable, predictable, and hence welcoming foreign investment, hence growth.
Navigated by GST StartupFlora
StartupFlora is well aware of the nitty-gritty about GST and how it has affected business operations. Here, we provide professional advice for hassle-free GST compliance. Our services are as under:
Registration under GST: We are here to help businesses get registered under GST, with online registration under GST.
GST Return Filing: We enable the businesses file their returns for GST in time and without error.
GST Advisory: We specialize in advice for most tax-related matters involving GST and tax compliance requirements.
GST has changed the face of taxation in India. There are opportunities and challenges associated with it. With StartupFlora, you will be able to navigate this new world of taxation with confidence and unlock the benefits of GST for your business.
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