India raises nearly 14.5 Lakh Crore, 34 percent of which is an indirect tax. Indirect taxes include service tax, customs duty, VAT, etc. Taxes paid. This applies to the Indian government's partial collection of taxes. The proportion of indirect taxes in most developing countries is higher than the direct tax. Nevertheless, the percentage of indirect tax in the developed countries is much smaller. The new introduction of GST will, therefore, enable the government to better control the taxpayers. This should allow the entire tax system to develop.
How will GST help small to medium enterprises?
GST is designed to put all indirect tax forms under one roof. Of small and medium-sized enterprises, operators or producers are to pay different taxes and have to visit various offices to meet with all tax documents. Others file different taxes every two years, every year, every half-year, etc. The more agencies are concerned the more violence. The total tax paid by the federal and state governments presently amounts to 32 percent, but business owners pay a much lower tax of about 18 to 22 percent with the introduction of GST. For a fact, separate fees must not be charged to different departments. This makes the work for every business owner much easier.
The direct impact of GST on small and medium enterprises
GST will support and promote the start-up in India. Each business in India has previously been required to receive a VAT registration that varies in all States and the rules and regulations vary. It was, therefore, a very frustrating process. Under GST, however, businesses are only required to register for GST, which will have a consolidated service tax-like mechanism.
It is actually required to pay VAT for any corporation if the annual turnover in a few countries is above five lakhs and in a few other states ten lakhs. This disparity creates confusion in different states. Under GST, if annual turnover is 10 lakh, a corporation does not have to file or pay GST. It extends to all nations. Most small companies with a turnover from 5 lakh to 10 lakh will, therefore, postpone filing for the GST refund.
GST helps small and medium-sized companies to conveniently do business in India because of the least difficulty. The difference between services and goods will be removed and compliance will be facilitated.