What’s the big deal about the GST bill? For your business, it can mean huge, awesome changes!
It is the first overhaul in our taxation system since 1947, yep, that’s right the first major change since Independence. (It’s the 101st Amendment Bill- a fact for your history trivia buffs)
So, what it GST?
Let’s keep it simple- GST is the Goods and Services Tax.Right now, across India there are different taxes and tax rates. The GST Bill aims to say adios to all that confusion and implement a single tax and rate. Sounds good, so far, right? Let’s dive into how it’ll impact your business:
- Can the Indian Tax System be Tamed? Earlier you had to work with various tax departments of each state and compile your returns based on several regulations. With the new GST, these issues will be a thing of the past as all taxes will be integrated and the process of filing taxes is much simpler.
- Sales Tax, Service Tax, VAT- too many taxes?:Currently you have to pay many different taxes and it can take a lot of time to compute them separately. Now GST will combine all taxes and give you a uniform payment rate.
- Can you imagine a world of easy logistics?: When transporting your goods from one state to the next, your vehicles are now stopped at the borders for checks. Interstate movement will change drastically as these checks will be shorter and these taxes will be eliminated with the GST.
- Open, Click, Startup: All new businesses require a VAT registration to function and this can be complicated when operating in many states and following different procedures and fees. The introduction of GST will allow a single process of registration and help new startups enter and expand easier than before. With the Digital India and Startup India initiatives, you can also register your startup online.
- Who doesn’t love exemptions?: Businesses having to pay a higher VAT for a turnover of more than Rs. 5 lakhs will now be exempt upto Rs. 10 lakhs and above. If you have a higher turnover, fret not, here’s your reason to cheer as tax on turnovers between Rs. 10 to 50 lakhs will be considerably lower.
The GST is here to help your business grow and develop with the added advantage of exemptions and lower total taxes.
Here are the Tax rates:
The GST Council recently put forth a four-tier tax rate system of slabs fixed at 5%, 12%, 18% & 28%:
- There are two standard rates of 12% and 18%
- There will be a 5% tax rate on goods that fall under the category of mass consumption
- The tax on essential items have been reduced while that on luxury goods will be higher
- Roughly 50% of goods that fall under the consumer inflation basket will be kept at 0% to tackle inflation, while the items that will incur the 28% tax rate were previously taxed at 30-31%
Does it sound like too much for your business to keep track of? We have the simplest solution with Numberz! At Numberz, we are getting ready for new GST regime and at launch will be GST ready, and with your business can be ready too!