How this budget will be a gamechanger for SMEs and MSMEs
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GST will change the way business happens in the country as it will add up digitalization and automation of money movement, processes, and stock planning that itself will help to enhance the capability and capacity of SMEs & MSMEs. ALSO READ: AIRFARES TO RISE STEEP AFTER BUDGET. HERE"S WHYIn current tax system, there are multiple taxes levied by the states and the centre at different levels from manufacturing to supply of goods. Multiple taxes at different levels cause the cascading effect; the diverse taxation system in the states is also hindrance in doing business. The GST subsumes over a dozen state and central taxes, creates a uniform tax regime across the country, and mitigates the cascading effect of tax. The over involvement of bureaucracy in existing system created many indirect bottlenecks that will get removed and free flow of working will placed in, that's what is needed while creating ease of doing business.
Most important aspect from a potential business perspective is India becoming ONE market itself which will add up to business scope of small Enterprises, they will be able to do business in any state and geographies without worrying about taxation and administration.
GST will encourage small enterprise to adopt automated processes which will speed up organisation of businesses well. Once the business gets organized, the possibility of growth doubles, on the other hand the customer expectations are also fulfilled by providing better buying and selling services. ALSO READ: BRANDED FASHION TO GET EXPENSIVE?
GST vs. Existing Tax System
In current tax system there are multiple taxes collected by the center and the sates in their respective jurisdictions.
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In GST there are three taxes only
SGST : Sate GST, levied by the States on intra-State supply of goods and services.
CGST: Central GST, levied by the Centre on intra-State supply of goods and / or services.
IGST: Integrated GST, levied by the Centre on inter-State supply of goods and services.
ALSO READ: COMMON MAN"S BUDGET 2017
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Dual GST
India is a federal republic Country. In the constitution of India there is distinct division of powers between the Center and the States. Both have been assigned the powers to raise resources through appropriate legislation. Therefore a dual GST is Constitutional requirement of fiscal federalism wherein Centre and States will be simultaneously levying it on a common tax base.
Registration
Those who are already registered under Central Excise Law, Service Tax Law, Central Sell Tax or State VAT do not need file a fresh application. They will get automatically get a PAN based registration number. Those who are not already registered under aforementioned laws, can get registered within 30 days from the date they becomes liable. Others liable to register under GST Act, can apply either through GSTN portal or facilitation center. The applicant must have PAN to apply for registration under GST.
(This article has been contributed by Sudhir Singh, Managing Director, Marg Compusoft Pvt. Ltd)
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