Monday, 26 June 2017

5 Ways In Which GST Will Affect Startups

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5 ways in which GST will affect Startups:



GST and Startups are two terms in India that are at its peak of talk. These terms have influenced every sector of the country. But why? Why are GST and Startup so important today? This is because they are bringing revolution to the country's economy. It has influenced every sector so deep that the government itself has announced a scheme that is "Startup India Standup India" in 2015 to encourage the emerging startups and also the Startups of the country. But are these two terms connected? Do these terms influence each other? Yes! They do. After the roll out of GST on 1st July, with the other industries being affected, Startup industry also will be affected in the vital terms. 





Let's look at the ways in which GST is expected to affect startups:


  1. In the very first case, GST will encourage the free flow of goods and services there will be no delay as it is in the current regime. It will be very beneficial to the startups that are focusing upon the manufacturing and logistics. Let us consider a carriage, carrying goods in India covers an average of 250-400 km a day uses much of its time in the long wait at checkpoints, here GST is set to improve this times and speed up the flow of goods.
  2. Under GST, startups that are focusing on the service industry will be able to round off the VAT paid on their purchases, with the service tax on their sales which they cannot under current regime.
  3. If you are a bootstrapped startups, much of your capital will be stacked in tax refunds. Then what about your business flow? How will things get going with it? This problem will be eradicated after GST. After GST, startups can file for tax refunds online and hope to get their money on time.
  4. Online shopping is something every person is doing because of its estimated quick delivery with many discounts and varieties. Even there are many emerging startups in this industry. A relief for E-Commerce startups after GST is that they don't have to pay different VAT for different states in India. In the present tax regime dealers are facing a lot of problem due to this. The dealings and flow of goods are often from one state to another state. But after GST roll out this problem will be fixed. As the tax will be one in all states.
  5. After the roll out of GST, the startups can be more reliable and committed to their work. As the taxation will be more transparent with the spice of the startups becoming digital Any Startup will be free on hiring any tax experts or a dedicated team for handling compliance. Startups itself can do it online with all the functionalities like registration, returns, payments and refund claims etc.
There can be little heck because of few claws of the GST regime but more or less it is filled with many advantages to the Startups.

About the author: Srishti Sharma is a co-founder of automaxis. automaxis understand this emerging need and hence we are developing an enterprise automation platform for B2B and B2C focused SMEs and Startups on eradicating all the manual processes of manual tax filing, invoice processing at different levels and payments with a secret sauce of business intelligence and machine learning.


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