It has long been the case that launching a business in India was the first choice of many wannabe entrepreneurs. Nevertheless, dealing with tax laws and meeting the various compliance requirements have been described by many as taxing. The application of the Goods and Services Tax (GST) was a big break for India’s tax system as it brought all the various indirect taxes under one roof. In spite of this, small business owners and startups were still stumbling over their feet in the comprehension of the GST and their handling of it.
In a recent announcement, the government has revealed changes to the GST regulations which are expected to have a positive effect on the registration process and the general ease of compliance. According to CA Gaurav Kumar, a leading Chartered Accountant and tax specialist, the fresh reforms provide the idea men of the new possibilities and educate every businessman why these are worth the attention.
Why GST is Crucial for New Businesses
For India, the implementation of the Goods and Services Tax (GST) is a major milestone in tax reforms history of the country which sees the merging of multiple indirect taxes like VAT, service tax, excise duty, etc. Any new business setting up its GST registration would probably be taking its first compliance-related step into the formal market.
The way CA Gaurav Kumar sees it, a GST registration is the cornerstone that ensures a company’s operations are within the ambit of the laws and also creates a rapport with the clientele, suppliers, and financiers. Apart from that, it also energizes the business to grab the input credit which ultimately helps in lessening the cost of the product and there is a great chance of increasing the cash flow.
Key Changes in the New GST Rules
The changes in GST are primarily targeted towards small businesses and startups which would be able to start and expand their businesses with ease. Chief Accountant Gaurav Kumar briefs the changes.
Simplified GST Registration Process
GST registration used to be a cumbersome and complicated affair, and the procedure involved a lot of paperwork and waiting for approvals. The new regulations have brought the following changes:
- The number of documents required for registration has been reduced.
- The online verification process is quicker and more transparent.
- The use of Aadhaar-based authentication is facilitating the approval process.
The simplified procedure is indeed a big relief for the first-time entrepreneurs who are now free to concentrate on their business instead of the paperwork.
Higher Threshold for GST Registration
Previously, enterprises which had an annual turnover exceeding ₹20 lakhs were required to register for GST. The threshold has now been raised under the new norms for some particular areas.
The startups and small businesses may continue in this way without being obliged to make immediate GST registration, and consequently they will have some time to develop before they start to take on tax compliance tasks. Gaurav Kumar states that this decision will stimulate the setting up of more firms because it will not be necessary to worry about paying large compliance costs.
Improvements to the Composition Scheme
One of the schemes in GST is the Composition Scheme where small-scale businesses are allowed to pay tax in a simplified manner and the returns have to be filed in small amounts. By:
- Increasing the limit for turnover eligibility.
- Lowering the demand for compliance.
In this way, small business owners from the retail, manufacturing, and restaurant sectors can benefit from the ease of filing and the reduction of the cost of the process. Gaurav Kumar advises small businesses to do a reality check of the scheme’s eligibility in order to apply correctly and take full advantage of it.
Faster GST Refunds for Startups
Funds moving in and out of the startup capital are crucial; initially, the delays in GST refunds were the main reasons disrupting business activities. According to the new regulations, the refund processing is quicker and more efficient.
As a result of the recent changes, startups that are into exports of goods or services can get their refunds in no time, thus ensuring their liquidity. Gaurav Kumar sees this transition as a pivotal moment for the startup entrepreneurs whose operations are entirely dependent on a consistent cash flow.
Digital Tools for GST Compliance
Technological advancement has a big impact on GST compliance. The government established easy-to-use online portals and mobile applications to expedite the filing process as well as for payment and compliance update tracking.
The introduction of technologies such as prefilled GST returns and automated data reconciliation has made it possible for businesses to easily comply with requirements. Gaurav Kumar points out that by employing these gadgets one can be free from mistakes of the human nature and complete other tasks in a fraction of a time.
Why These Changes Matter
Starting a business means you have to handle multiple tasks. This can be marketing, sales, or product development. Complicated tax rules most of the time scare entrepreneurs to jump into business ownership.
This new GST reforms have been introduced to remove these sorts of barriers and encourage smooth business transactions. According to CA Gaurav Kumar, these reforms will lower the compliance burden which will motivate more people to start businesses instead of just working their way through the paperwork.
“When compliance is a simple process, entrepreneurs can concentrate on their innovations and not on the bureaucracy” explains CA Gaurav Kumar
Tips to Make the Most of the New GST Rules
Despite the fact that the new regulations facilitate GST compliance for all taxpayers, the entrepreneurs must be absolutely aware of the duties they are to fulfill. CA Gaurav Kumar imparts some tips that can be helpful.
- Understand the New Thresholds: First of all, it is necessary for you to check if your business turnover fits the new thresholds for GST registration and thus keeping away from penalties or unnecessary registrations.
- Evaluate the Composition Scheme: Apart from that, if your turnover is within the set limit, then it is advisably to you to choose a scheme which will save not only time but also the amount of compliance cost.
- Maintain Accurate Records: Have the records of your invoices, expenses, and payments in details. Then, you will have no worries about compliance and audits.
- Leverage Technology: You can make use of GST software and official portals for easy filing of returns and keeping track of your compliance.
- Seek Expert Guidance: In any event of simplified rules, taking advice from a GST expert like CA Gaurav Kumar can help you to make the best choices and to have a perfect tax plan.
The Future of GST and Business Growth
One clear example that the government is committed to supporting entrepreneurs and making issuance of businesses easier is these GST reforms. The India startup environment will have more developments in future and will be bigger.
CA Gaurav Kumar forecasts that the GST will become increasingly digital and friendlier to business in the long run. Businesses that adopt this approach early will get the most benefits from these changes.
Conclusion
The latest GST changes have made it practically impossible not to initiate a company in India and still much less to see it grow. These include easy registration, quick refunds, higher thresholds, and digital tools, creating a startup and a small business-friendly atmosphere.
CA Gaurav Kumar points out that comprehending and strictly following GST norms are prerequisites of success in the long run. With perfect preparation and successful mentoring, entrepreneurs become able to build lasting and profitable companies without getting bothered by the question of compliance, says CA Gaurav Kumar.
Through the adoption of these reforms, new entrepreneurs can harness the power of a vibrant and intense market while benefiting from its many opportunities and thus be of a same level with existing big players in an intensely competitive market by being one step ahead of their competitors.
