The introduction of GST (goods and services tax) is a step towards a more organized business ecosystem. It upgrades the way businesses have to comply with taxation, which should lead to more transparency and ease of doing business. What does it mean for your business and the economy in general? Let’s find out the advantages of GST:
- You can plan ahead
You’ll be able to predict how much money you will make from selling goods and services during a particular period of time-based on what’s in stock and what’s been ordered from customers so far this month or quarter (or year). This means that if there are any delays in payments or other things change, it won’t be too hard to adjust your prices accordingly or even cut back on new orders until things get back on track once again.
- Easy calculations
The GST will make your business calculations simpler. You’ll be able to see how much tax you pay and how much you can claim back, both of which will help you keep a close eye on your expenses.
- Lower Tax Burden
When you buy or sell goods, services, and other taxable items, you need to pay taxes on the transaction. If you’re a small business owner and you don’t have a good accounting system in place, you may not know what your tax liability is. This can leave you open to fraud and inadvertently pay too much or too little in taxes.
With GST, all businesses have their tax burden reduced by one percentage point of the total amount they collect each month. This means that if your business collects Rs 10 lakh every month, it will only have to pay Rs 9 lakh as taxes to the government instead of Rs 10 lakh. The single-point reduction in tax burden means that businesses get more money in their pockets at the end of each month instead of losing out on valuable cash flow because of taxes owed.
- Reduced Compliance Costs
The GST will also reduce compliance costs for businesses as they can be sure of being paid tax under the new regime. They will no longer have to worry about filing multiple returns, which means they can focus on running their businesses without having to spend much time on compliance issues like paying taxes and filing returns.
GST is a comprehensive indirect tax regime that has been introduced to replace the existing system of central excise, service tax and value-added tax. The main objective of this regime is to provide an integrated framework for levying and collecting taxes on goods and services, which will lead to a faster collection process.
- Easier to Start Or Expand Your Business
The introduction of GST will make the collection process easier for small businesses as they do not have to deal with multiple systems such as central excise, service tax and value-added tax. The new law also facilitates compliance activities by providing a single invoice number for all taxable supplies made by the supplier to the buyer in a calendar year, which can be used for filing returns and making payments under the new law. Additionally, it is exceptionally easy to get registered for GST as the documents such as NOC and letter of authorization for gst are pretty easy to obtain.