A landmark move in the history of Indian economy, it will be especially beneficial to the SME’s. As highlighted in the infographic shared by Power2SME, GST will be a destination based tax system, making the SMEs more cost-efficient.
GST will bring ease of starting a business by introducinguniform Centralized registration process in India. This changewill create higher exemption for new businesseswith an increased investment and lower tax burden,offering unified tax calculation without differentiating between product and services. GST will also help in bringing down the fiscal deficit, boost GDP & bring economic integration in the country. It will help improve technology adoption among SMEs as it is necessary to comply with GST system. Going forward, GST will make the process of paying tax simpler and transparent,merging all taxes of different states into one, withno difference between sales & services. Additionally, GSTwill reduce the logistic cost of the company producing non-bulk goods,cutting down stocking cost of goods and services. Harmonizing the Indian market, GST allows full tax credit for inputs and capital goods i.e. both local and interstate taxes will be paid on procurement. GST reform, thus, aims to boost the growth of SME sector holistically.