Goods and service tax (abbreviated as GST) is a tax that is applicable all over India, even on startups. The benefit of this tax is that it is directly levied on the immediate services or products purchased by the consumer.
If new or small business owners take help of the right accounting software companies like Zetran for handling their finances with right GST accounting software, such as OneSolution, Zoho, Clear Tax, etc., this tax can be beneficial for them in the following ways:
1. GST enables startups to enjoy tax credit on the products or services
Many startups are into the service industry where service tax is applied. Under GST, they can directly levy the tax on the consumer during the purchase of their product or service while paying the tax directly to the government at the same time. It will be a win-win situation for both the startups and the government finances.
2. Simpler taxation impact of on startups
Due to the implication of GST, the taxation process has become simpler and the time spent on tax compliances is also reduced. Even startups that deal in goods and services department will enjoy the benefits of easier GST tax filing online.
3. E-commerce and online startups
All e-commerce and online startups can benefit from GST, as it eliminates the confusing compliances and differential treatments. Many startups are tech-savvy and building a huge online presence. So, implying GST on them will keep them tension free of paying tax at the end of the year. This is because GST can be paid to the government directly online, so there won’t be any complication like seizing of goods due to failure to pay taxes for inter-state movement of goods.
4. Increased efficiency in logistics
The logistics industries have to maintain various warehouses across the nation to avoid CST (which was levied earlier for inter-state movement of goods). But with the help of GST, the inter-state movement of good is easy. It will be highly beneficial in uniting India while eliminating all restrictions on inter-state movement of goods.
5. The tax burden for manufacturing startups
GST, however, is a slight tax burden for many manufacturing startups. This is because earlier manufacturing businesses had to pay excise only if they had the turnover of above INR 1.50 crore. But due to the implementation of GST, this turnover limit is reduced to INR 20 lakh. It has surely increased the tax burden on many manufacturing startups.
Nonetheless, with GST implementation, many previous challenges of the industries and startups have been removed. This tax is going to unite India where goods can move freely without any compliances or restrictions.
Using right GST accounting software
More than 80% of startups fail to manage their cash flow problems, reportedly. It is quite difficult for startup owners to track down their payments while considering proper GST payment to the government.
But with the help of software company Zetran, startup owners can buy accounting software to manage accounts, as well as to timely clear their GST. Finding the best software for managing cash flow and finances is important for new businesses. No matter you are thinking of buying a standalone accounting tool or a complete accounting suite, we're here to help you at every step.