Prior to the 2000s, being an entrepreneur in India was demeaning and met with mockery from the society. However, time has brought changes and now saying that you are the founder of a startup does actually sound appealing. The startup culture is booming in India so much that even the Indian government has decided to take initiative with the scheme of ‘Start up India, stand up India’ in 2015 to provide a helping hand to new start-ups.
With the introduction of GST from 1st July 2017, there is a lot of debate which has been created on topics like, ‘how GST will impact Indian start-ups’. Although the real impact of GST would be seen only after a period of two or three years, however, GST is expected to benefits the government as well as general people. GST has removed the cascading effect of taxes and it will ease the process of doing business in India. The Indian startups will gain significantly under GST.
Let us see how these youthful Indian start-ups would profit under GST regime;
A solid and complete IT framework would be the motivation of the GST administration in India. In this manner, all enlistments, returns, installments, and so on would be available to the citizens on the web, which will make tax compliance straightforward and clear. A system of seamless tax credits throughout the value-chain, and across boundaries of states, would ensure that there is no cascading of the taxes. This could scale back the hidden prices of doing business.
According to the earlier structure, any business with a turnover of more than Rs. 5 Lakhs had to get VAT enlistment and pay VAT. GST will make this restraint higher, to up to Rs. 10 Lakhs. Apart from this, organizations with turnover between Rs. 10 Lakhs and Rs. 50 Lakhs will be saddled with lower rates. This will bring relief from taxation rates to recently settled organizations.
Owing to potency gains and interference of leakages, the tax burden on most commodities can come down, which will profit start-ups.
Many transport vehicles get postponed amid movement crosswise over states because of border tax and check post issues. Interstate development will be plainly less expensive and less tedious, as these taxes will be disposed of. The entire Indian market will open up for producers as interstate supply progresses toward becoming tax neutral. This will likewise cut down expenses related to keeping up high stocks, as there will be an undisrupted movement of products.
Any new business needed a VAT enrollment for deal sales from the tax department. A business working in many states had to confront a considerable measure of issues with respect to the diverse methods and expenses in each state. GST will realize a consistency in process and a unified enlistment which will benefit start-ups.