GST

As mentioned above, GST replaced the existing tax schemes that were levied on the Indian population by its government. With the implementation of the One Hundred and First Amendment of the Constitution of India came into effect GST on 1st July 2017. The GST Council of India governs the tax rates, rules and regulations. This council is made up of the finance ministers of the central government and state governments of each state.

The GST is considered to be the largest tax reform as it will transform the country’s $2.4 trillion economy by replacing indirect taxes with a federated tax. Similar to any other big reform, its implementation has also received criticism.

Few Reasons as to Why GST is good for Business?

GLOBAL COMPETITIVENESS

GST, the one nation, one tax system will improve India’s competitiveness in global markets. GST reduces the total cost of running a business as it will ensure minimal cascading of taxes. It counters inflation in a manner that helps business owners. One additional benefit of GST is that now taxpayers are not required to pay tax on advances received for the supply of goods.

EASE OF DOING BUSINESS

There’s no multiplicity of taxes and minimum compliances as the rates of GST is the same in every state and union territory. There are 5 slabs under GST: Nil, 5%, 12%, 18% and 28%.

COMPOSITION SCHEME

Small Businesses and Startups can benefit a lot from the composition scheme of GST as it is simpler to understand. Small businesses file a single return annually if they have a turnover up to $214,530. Small service providers having an annual turnover of up to $71,510, now have to pay GST at 6% instead of 18%.

ONLINE PAYMENT OF TAXES

It is a key advantage of GST to have a robust IT system. This enables the users to do online registration, payment and filing of taxes and thus results in easier compliance.

Frequently Asked Questions