GST and Startups. Whats new for them.

GST ready?

GST and Startups. Whats new for them.

GST Startups

GST and Startups. Whats new for them.

Start up is the most blooming sector in India now a days. It has influenced India so much that the government decided to start its own scheme called ‘Start Up India, Stand Up India’ in 2015. GST Startups or Start Up has its own value with the innovative youngsters and an ambition in people of India to become entrepreneurs. The number of entrepreneurs will be increasing in the coming years.

There are many advantages for the Startups with the coming tax structure GST.

  1. The very first advantage to the Startups of  manufacturing industry and other industry is there will be free flow of goods and services, a truck carrying goods in India covers an average of 250-400 km a day, much of this is due to the long wait at check points, there is a hope that it will improve logistics and improve the speed of goods transport.
  2. The next advantage to startups is a startup in the service industry have to pay service tax. Under GST, such startups will be able to round off the VAT paid on their purchases, with the service tax on their sales which they cannot under current regime.
  3. The next advantage is that for the bootstrapped startups, they have their capital stuck in tax refunds. But with GST startups can file for tax refunds online and hope to get their money on time.
  4. The other advantage is specially for the E-Commerce startups. The different states in India have different VAT structures at present. The dealers and startups dealing with the e-commerce service have to face lot of problem due to this. The dealings and flow of goods is often from one state to another state. But after GST roll out this problem will be fixed. As the tax will be one flow in all states.
  5. With the increase in advantages of GST the startups can be more reliable towards their work. With GST the taxation will be more transparent and all tax processes will be digital, startups  or business entities don’t have to hire any tax experts or a dedicated team for handling compliance. Startups can file details online those are, taxpayer registration, return submission, to tax payments and refund claims etc.

There can be a little tax burden to the manufacturing startups, as the turnover limit has been reduced to Rs 20 lakh. But then there are more of the advantages to the startups overall.

 

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