GST rates are the new discussion point in the nation and everyone wondering about is how it will get gel-into the Indian business system. Well, according to the recent analysis reports, this system will ease business structure and will attract more foreign investment into the sector. Where all the large businesses are getting ready for the new transition, what startups can expect from this system regarding efiling of income tax return.
The first thing any startups will get benefit from is the free flow of goods and services without paying any entry tax across the country. This taxation system will turn India into a single market where goods will be allowed to flow without any barriers. GST rates are also expected to increase the efficiency of the logistic system which will directly affect the startups.
It will also introduce the “Do it yourself” model which will keep the taxation system more transparent. Things will be done online such as taxpayer registration, refund claims, tax payment and efiling of income tax return. Doing things online will ultimately adhere the “Do it yourself” model, where the business persons will control their financial flow by themselves.
This system will also increase liquidity, which is an important factor for the startups now a days. Startups struggles in receiving funding and under the current taxation system, their capital investments gets stuck in the hands of tax authority as a refund claim. But GST rates coming into action mean refunds will be processed online and a faster process can be expected.
Also, this law will increase the turnover limit for business registration in comparing to current laws. According to the current system, the limit is INR 10 lakhs where the new system will increase the limit to 20 lakhs. However, this system is under proposal and will also impact the efiling of income tax return of the businesses.