Here, in this article, we will talk about the Know about the impact of GST on SME and small IT companies in India. Certain reforms are absolutely necessary for India to keep up to the Global economic reforms and trends. GST is one of such topic which is looked upon with great hope.
From a SME point of view it has never been addressed before:
Radical reforms in the taxation are absolutely necessary for SME throughout the country. It is deterrent to growth and expensive to comply with complex statutory obligations in the present structure.
A considerable time and energy of management in SME is consumed in resolving and complying with tax regime. GST hopefully will eliminate all types of taxes applicable related to goods and services, which will simplify business processes.
Multiple taxes on the same product will not be levied as credit for tax paid will be streamlined. This will reduce costs in the production process and overall cost of goods and services for the end user.
Some key benefits for SME aspiring to go national will face little or no problem as tax rates will be uniform nationwide and standard pricing can be maintained throughout the country and of course saving from the nightmare of state wise statutory compliance.
Enormous confusions/ambiguityin interpretation of software as taxable through service tax route or sales taxroute will be addressed for small IT firms into domestic sales and services.
It is unlikely that amendment bill on GST will be tabled in this session of Parliament. Further the proposal to introduce dual GST one for state (SGST) another for center (CGST)and over and above that different percentage (20%) for goods and different percentage (16%) for services will only complicate for SME. For IT software and service providers the ambiguity will continue to remain in identifying a given IT activity as goods or as service.
We all are looking forward to concrete decisions on GST in the coming budget. It will reduce lot of taxation related overheads in terms of time and money in the supply chainand ultimately benefit the SME and the common man/end user. It is bound to stimulate growth and strengthen the economy.
Contributor – Vineet