{"id":289,"date":"2017-05-04T18:33:55","date_gmt":"2017-05-04T13:03:55","guid":{"rendered":"http:\/\/www.gsthelplineindia.com\/blog\/?p=289"},"modified":"2019-07-24T13:19:50","modified_gmt":"2019-07-24T13:19:50","slug":"benefits-of-gst-on-small-business","status":"publish","type":"post","link":"https:\/\/www.gsthelplineindia.com\/blog\/2017\/05\/04\/benefits-of-gst-on-small-business\/","title":{"rendered":"Benefits of GST on Small Business &#8211; GST Effect on Small Business in India"},"content":{"rendered":"<p>Good and Service Tax (GST) is a complex indirect tax levy on manufacture, sale and consumption of goods and services across India. New Goods and Service Tax (GST) has been implemented from 1st July 2017, it has removed all indirect taxes levied by the Central and State Government. The Central and State government implemented GST almost on all goods and services which is produced in India or imported in the country.<\/p>\n<div id=\"toc_container\" class=\"no_bullets\"><p class=\"toc_title\">Contents<\/p><ul class=\"toc_list\"><li><ul><li><\/li><\/ul><\/li><li><\/li><li><\/li><li><\/li><li><\/li><li><\/li><li><\/li><\/ul><\/div>\n<h2><span id=\"GST_Effect_on_Small_Business_8211_SMEs_Bottom_Line\">GST Effect on Small Business &#8211; SMEs\u2019 Bottom Line<\/span><\/h2>\n<p><strong>The following illustration will give a gist of calculation under the VAT and GST and the flow of tax burden.<\/strong><\/p>\n<table border=\"0\" cellspacing=\"0\">\n<colgroup width=\"248\"><\/colgroup>\n<colgroup width=\"174\"><\/colgroup>\n<colgroup width=\"212\"><\/colgroup>\n<tbody>\n<tr>\n<td style=\"text-align: center;\" colspan=\"3\" align=\"center\" valign=\"middle\" height=\"17\">\n<h3><span id=\"VAT_vs_GST\"><a href=\"https:\/\/www.gsthelplineindia.com\/blog\/2017\/05\/02\/difference-between-gst-and-vat-with-example\/\"><b><span style=\"font-family: 'Liberation Serif';\">VAT vs GST <\/span><\/b><\/a><\/span><\/h3>\n<\/td>\n<\/tr>\n<tr>\n<td><b>Manufacturer to Customer <\/b><\/td>\n<td><b>VAT<\/b><\/td>\n<td><b>GST<\/b><\/td>\n<\/tr>\n<tr>\n<td>(A) Cost of Production<\/td>\n<td>100000<\/td>\n<td>100000<\/td>\n<\/tr>\n<tr>\n<td>(B) + Prot Margin<\/td>\n<td>50000<\/td>\n<td>50000<\/td>\n<\/tr>\n<tr>\n<td>(C) Producers Basic Price (A+B)<\/td>\n<td>150000<\/td>\n<td>150000<\/td>\n<\/tr>\n<tr>\n<td>(D) +Central Excise Duty @ 12% of C<\/td>\n<td>18000<\/td>\n<td>N\/A<\/td>\n<\/tr>\n<tr>\n<td>(E) C+D<\/td>\n<td>168000<\/td>\n<td>150000<\/td>\n<\/tr>\n<tr>\n<td>(F) VAT @ 12.5% of E<\/td>\n<td>21000<\/td>\n<td>N\/A<\/td>\n<\/tr>\n<tr>\n<td>(G) +Central GST @ 12% of E<\/td>\n<td>N\/A<\/td>\n<td>18000<\/td>\n<\/tr>\n<tr>\n<td>(H) State GST @ 8% of E<\/td>\n<td>N\/A<\/td>\n<td>12000<\/td>\n<\/tr>\n<tr>\n<td>Total Sale Price<\/td>\n<td>189000 (C+D+F)<\/td>\n<td>180000 (E+G+H)<\/td>\n<\/tr>\n<tr>\n<td colspan=\"3\" align=\"center\" valign=\"middle\" height=\"17\"><span style=\"font-family: 'Liberation Serif';\">*The calculation above is only an illustration, GST rates are yet to be nalised. <a href=\"https:\/\/www.kotak.com\/sme\/files\/GST.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Simple taxation structure of GST implemented by the Government, simply means that now the start- up or small businesses would more enjoy with it. New GST regime will help and provide an opportunity to do businesses across India as well as who are planning to start up their business in Indian market. The whole nation will be benefited with GST implementation in India, but a start- up or small businesses have several reasons to enjoy it.<\/p>\n<p><strong>Recommended Post<\/strong>:&nbsp;<a href=\"https:\/\/www.gsthelplineindia.com\/blog\/2017\/03\/17\/different-types-indirect-taxes-included-gst-benefits\/\">Different Types of Indirect Taxes Included in GST And Its Benefits<\/a><\/p>\n<h2><span id=\"Benefits_of_GST_on_small_business_in_India\">Benefits of GST on small business in India<\/span><\/h2>\n<p>There are many advantages of GST on small business which are following:<\/p>\n<ul>\n<li><strong>Reduces Taxes<\/strong>: GST in India reduces number of indirect taxes such as excise duty, custom duty, VAT, entertainment tax and so on. So the small businesses and startup will be benefited with reduction of taxes and enter in the Indian market<\/li>\n<li><strong>Taxes Break<\/strong>: In the GST system, when all taxes are combined, it might be that burden of taxes will break equally in between manufacturing and services.<\/li>\n<\/ul>\n<h2><span id=\"Simple_Taxation_Process\">Simple Taxation Process<\/span><\/h2>\n<p>Start-up or small businesses has to spend lots of time, energy and money to understand the complex taxation structure system and then implementation in business, GST in India would help and combine all the indirect taxes.<\/p>\n<p>With the GST in India, it affects all of the society. The businesses are surely to be affected with it. Small businesses or start- up have to cooperate with this new taxation system. Small businesses or start- up now required to know which taxes to pay, how the tariffs apply, the quantum of the taxes and the procedures for calculation.<\/p>\n<blockquote>\n<p style=\"text-align: center;\">Are you looking for GST Software for Small Businesses?<\/p>\n<p style=\"text-align: center;\">What are you waiting for? <a href=\"#\">Click here now<\/a><\/p>\n<\/blockquote>\n<p><strong>Recommended Post<\/strong>:&nbsp;<a href=\"https:\/\/www.gsthelplineindia.com\/blog\/2017\/04\/05\/process-assessment-tax-liability-under-gst\/\">Process Of Assessment of Tax Liability Under GST<\/a><\/p>\n<h2><span id=\"Higher_Tax_Exemptions\">Higher Tax Exemptions<\/span><\/h2>\n<p>The current taxation structure, any business who turnover exceeds than Rs 500000 is compulsory to register for VAT and pay the taxes (VAT) to the government on particular time. With the GST implementation in India, the limit has exceeded up to Rs 1000000. Businesses who turnover in between Rs 1000000 to Rs 5000000 would be taxed at a lower rate.<\/p>\n<h2><span id=\"Easy_Business\">Easy Business<\/span><\/h2>\n<p>In the current scenario several small businesses in India, specifically small businesses in the e-commerce portal are challenging with a lot of tax related problems. The problem may differ from state to state because every state has different taxation structure. With the GST implementation in India, the taxation structure would be consistent. It would provide more smooth functioning to business.<\/p>\n<h2><span id=\"Improves_Economic_condition\">Improves Economic condition<\/span><\/h2>\n<p>GST will not be levied at each stage of supply chain just like VAT. GST will incur and born by end consumer or user at the time of consumption of goods and services. GST in India will improve an economic condition and develop common national market.<\/p>\n<p><strong>Also Read:<\/strong> <a href=\"https:\/\/www.gsthelplineindia.com\/blog\/2017\/06\/13\/impact-of-gst-on-gdp-in-india-economy\/\">Impact of GST on Indian Economy<\/a><\/p>\n<h2><span id=\"Elimination_of_Cascading_taxes\">Elimination of Cascading taxes<\/span><\/h2>\n<p>Several taxes levied at each stage of supply chain and on interstate transfer of goods and services causes cascading taxes. Thus cascading taxes, act as hidden cost and it increases the overall production of goods and services. GST is based on input tax credit mechanism, thus it eliminates the process of double taxation.<\/p>\n<hr>\n<p><strong>Do you think GST bill will be beneficial for small business? please don&#8217;t forget to share your opinion via comments. Download the<\/strong> <a href=\"https:\/\/www.gsthelplineindia.com\/\">GST App<\/a> <strong>to get instant updates on GST Bill<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Good and Service Tax (GST) is a complex indirect tax levy on manufacture, sale and consumption of goods and services across India. New Goods and Service Tax (GST) has been implemented from 1st July 2017, it has removed all indirect taxes levied by the Central and State Government. The Central and State government implemented GST &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.gsthelplineindia.com\/blog\/2017\/05\/04\/benefits-of-gst-on-small-business\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Benefits of GST on Small Business &#8211; GST Effect on Small Business in India&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":1496,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[158,159,157],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Benefits of GST on Small Business - GST Effect on Small Business in India<\/title>\n<meta name=\"description\" content=\"How will GST effect on small business? What are the top benefits of GST on small businesses? 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