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GST Write for us: On May 6, 2015, the Lok Sabha passed the Goods and Services Tax (GST) – GST Bill. GST has been discussed and debated in India for more than a decade. The GST Bill has now passed the Lok Sabha and will be presented to the Rajya Sabha. If passed by the Rajya Sabha, the Bill would trigger the implementation of GST in April 2016, transforming India’s indirect taxation system. This article will look at some of the most significant benefits of GST implementation in India for startups and small businesses.

GST or Goods and Services Tax is a value-added tax levied at all points in the supply chain with credit allowed for any tax paid on inputs acquired to make the supply. Therefore, the end consumer bears this tax as the last person/entity in the supply chain. The introduction of GST in India is expected to simplify indirect tax structure at both Centre and State levels – replacing the multiple layers of complex taxation currently existing in India.

To start a new business in India, companies must first obtain VAT registration from the state’s Sales Tax department. Because each state has different procedures and fees for VAT registration, it is difficult for businesses operating in multiple states to obtain and maintain VAT compliance.

With the implementation of GST in India, the procedure for GST registration, similar to service tax registration, would be centralized and standardized. Businesses would no longer need to obtain multiple VAT registrations under the GST regime, as a single GST registration would be valid throughout India. The process of obtaining GST registration would also be standardised, making it easier to start a new business in India.

GST Write for us: Currently, goods and products are taxed under the State Government’s VAT regime. Each state has its VAT rate, VAT regulations, and VAT procedures, which causes complications for businesses. Businesses must adhere to a variety of tax regulations, such as Central Sales Tax, Additional Customs Duty, Purchase Tax, Luxury Tax, and so on.

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