In 2017, a combined tax system was implemented by the Center. Goods and Service Tax redirected a bulk of taxes into a single simpler one. Combining other indirect taxes has shown a huge GST benefits for small businesses and startups. Making a single unified market, it provides a single tax on goods and services. This said change is considered to be the biggest change in the tax reforms in India. The GST tax regime has reduced the multistage tax system.

Good and Services Tax 

The idea of a Goods and Services Tax (GST) for India was first rooted sixteen years back in 2006. A GST Council supervises the mobility of the idea by maintaining harmony between the GST aspects of the state and center. This came into being in the year 2017. The current system of GST has been divided into two parts, the Central GST and the State GST. Both forms combine to support businesses and help develop their states and nation as a whole. GST has been divided as following-

• Central Taxes subsumed under GST
• State Taxes subsumed under GST

GST benefits for Small Businesses & Start-ups

1. Simple procedure for registration and filing tax returns  

One of the GST benefit is that, today GST Registration is just a click away. The GST registration is now first-hand available to everyone seeking. One only needs to visit the official Goods and Tax Services website and follow the procedure of filling out the documents and uploading documents to get themselves registered.

2. GST increased the threshold for GST registration for slight businesses 

Prior to the implementation of GST, any business with a turnover of more than Rs 5 lakh in a financial year was required to obtain VAT registration. However, any business whose turnover exceeds Rs 40 lakh in a financial year is required to register under GST. For service providers, this limit is Rs 20 lakh.  

3. Online compliance processes 

This higher threshold under GST has brought compliance relief to many small businesses, including startups in India. Similar to the GST registration process, another GST benefit is that of easier compliance proceedings. Having the online facility has surely put ease towards every aspect of work.

4. Enjoy tax credit on purchases 

The major GST benefit is the presence of the umbrella of taxes. All taxes being cumulated together in an umbrella of GST has reduced the burden of filing multiple taxes. The centralized system has reduced the hassle of businesses navigating through manual hardships.

5. Regulation of unorganized sectors 

Unregulated textiles and construction industries have been facing unwarranted issues over the years. Relevant compliance and payment structures along with financial provisions have been introduced with the aim to boost trade, accountability, and regulation. 

6. Reduction in logistic cost 

The time-saving process and the reduced elaborated steps provide for a reduced cost of production.

7. It gives access to a common national market across India 

Smaller businesses have been given major opportunities as GST^[1] benefits. Allowing access to global markets, the smaller businesses and startups that want to establish their foot can do so even with a lesser amount of investment.

8. It eliminates the cascading effect of tax 

The cascading effect was the tax on tax with several taxes existing in the system. With the formulation of GST, all indirect taxes have cumulated into a single bracket. This helps evade the tax on tax effect and supports businesses with major benefits.

Steps to be taken for GST registration

Follow the steps given below to get GST Registration- 

Step 1: Taxpayers to visit on GST Registration Portal.

Step 2: Application form for New Registration to be filled.

Step 3: A system-generated 15digit Temporary Reference Number is given.

Step 4: OTP verification.

Step 5: Document submission.

Step 6: Final verification.

Conclusion – GST benefits for Small Businesses

With the aim of abolishing certain indirect taxes and clubbing everything under its own larger umbrella, GST was introduced. The slogan “One Nation One Tax” prevailed in support of GST benefits. The whole motive of this amendment was to put ease to the workload and difficulties of businesses, especially startups. You can also take this registration with the help of expert like BizAdvisors.  They make your work easy.

Read our article:All You Need to Know about Eligibility Criteria for GST Registration