GST: 5 Reasons Why India’s Largest Indirect Tax Reform Is Eventually Good For Small Businesses

GST and Taxation for MSMEs: While not everything went according to plan, there is no doubt that GST ultimately is suitable for SMEs. The impact of GST on different sectors of the economy has become a never-ending debate.

GST and Taxation for MSMEs: The Goods and Services Tax (GST) was rolled out on July 1, 2017, to simplify the existing tax regime, widen the tax base, and increase the government’s tax revenues. It was implemented with a hope that it would eliminate the system of double taxation that was in place earlier. It is being estimated that there are almost 5 crore small and medium enterprises (SME) that are responsible to form the backbone of the Indian economy and contribute to 50 per cent of the industrial output and around 42 per cent of export earnings. SME had to adapt to the new tax regime. Considerable steps had to be taken by SMEs to become GST ready. SMEs were told that changing to the GST system would eventually prove beneficial. With a GST system in place, tax evasion would become much harder and scrupulous businesses would be rewarded by tax credit inputs. 

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While not everything went according to plan, there is no doubt that ultimately the GST is suitable for SMEs. The impact of GST on different sectors of the economy has become a never-ending debate. It is difficult to comprehend and speculate, but it is known that it is a mixed bag of opportunities and challenges, especially for SMEs. Few reasons why it is so are mentioned below.

Source: Financial Express

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