{"id":2981,"date":"2020-03-18T06:50:50","date_gmt":"2020-03-18T06:50:50","guid":{"rendered":"https:\/\/www.indifi.com\/blog\/?p=2981"},"modified":"2021-03-19T02:50:26","modified_gmt":"2021-03-19T02:50:26","slug":"how-gst-changed-the-face-of-smes","status":"publish","type":"post","link":"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/","title":{"rendered":"How GST Changed The Face Of SMEs"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"500\" height=\"282\" src=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2020\/03\/How-GST-Changed-The-Face-Of-SMEs-500x282.jpg\" alt=\"How-GST-Changed-The-Face-Of-SMEs\" class=\"wp-image-2982\" srcset=\"https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2020\/03\/How-GST-Changed-The-Face-Of-SMEs-500x282.jpg 500w, https:\/\/www.indifi.com\/blog\/wp-content\/uploads\/2020\/03\/How-GST-Changed-The-Face-Of-SMEs.jpg 600w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><figcaption>How-GST-Changed-The-Face-Of-SMEs<\/figcaption><\/figure>\n\n\n\n<p>India has always been a gold mine for aspiring entrepreneurs who want to establish new businesses and flourish their SMEs. But the game leveled a notch higher since GST came into existence. It was indeed a big decision for the Indian economy to bring every indirect form of tax under one roof. <\/p>\n\n\n\n<p>Almost 2.5 years have passed and still, GST<strong> <\/strong>is the most speculated topic in the Indian business community. Do we really understand what it is? Why are most of the small business owners and customers still hesitant to pay GST? If you want an unbiased overview, you are in the right place.<\/p>\n\n\n\n<p class=\"has-text-color has-vivid-cyan-blue-color\">Also Read:&nbsp;<a href=\"https:\/\/www.indifi.com\/blog\/gst-success-for-msmes\/\">The Era Of GST Spells Success For Small And Medium Businesses<\/a><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_67_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#The_impact_of_GST_on_SMEs\" title=\"The impact of GST on SMEs\">The impact of GST on SMEs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#Some_of_the_other_major_advantages_Of_GST_are_%E2%80%93\" title=\"Some of the other major advantages Of GST are &#8211; \">Some of the other major advantages Of GST are &#8211; <\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#Tax_Relief\" title=\"Tax Relief&nbsp;\">Tax Relief&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#Simplifying_the_process_of_New_Start-up\" title=\"Simplifying the process of New Start-up\">Simplifying the process of New Start-up<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#Logistics_Cost_dropping_off\" title=\"Logistics Cost dropping off\">Logistics Cost dropping off<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#One_Nation_One_Tax_%E2%80%93_GST\" title=\"One Nation, One Tax &#8211; GST\">One Nation, One Tax &#8211; GST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.indifi.com\/blog\/how-gst-changed-the-face-of-smes\/#Digitalization_and_Enhanced_Compliance\" title=\"Digitalization and Enhanced Compliance&nbsp;\">Digitalization and Enhanced Compliance&nbsp;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_impact_of_GST_on_SMEs\"><\/span><strong>The impact of GST on SMEs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The impact of SMEs<strong> <\/strong>is huge on the Indian economy. If you are puzzled how small enterprises can affect one of the largest tax regimes in the world, here are some stats for you &#8211; SMEs account to 45% of the total manufacturing unit of India, employing 40% of the total workers. Impactful enough!&nbsp;<\/p>\n\n\n\n<p>Well, previously a trader had to pay 32% of total central and state government taxes collectively, which has now reduced to 18-20% after this big change.&nbsp; Although this<strong> <\/strong>government<strong> <\/strong>policy<strong> <\/strong>has yet not been fully accepted by most of us, it is a blessing in disguise for the SME industry.<\/p>\n\n\n\n<p class=\"has-text-color has-vivid-cyan-blue-color\">Also Read: <a href=\"https:\/\/www.indifi.com\/blog\/gst-success-for-msmes\/\">The Era Of GST Spells Success For Small And Medium Businesses<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Some_of_the_other_major_advantages_Of_GST_are_%E2%80%93\"><\/span>Some of the other major advantages Of GST are &#8211; <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_Relief\"><\/span><strong>Tax Relief&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Previously, businessmen were slapped with different taxes at every stage ranging from manufacturing to retailing. The supply chain used to function that way. Remember going to a restaurant and paying service tax, surcharge, VAT and whatnot? Thank God it is not there anymore. All these extra billable taxes have now been capped under GST with defined rates. Convenient, isn\u2019t it?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Simplifying_the_process_of_New_Start-up\"><\/span><strong>Simplifying the process of New Start-up<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Starting a new business was never so easy in India &#8211; different departments, different taxes, law compliance, VAT registration, legal proceedings, documentation, and whatnot. But now, things are centralized. All the indirect taxes have been brought under one roof. The taxes are rationalized, processes are less complicated, and the unified tax code has considerably brought down the cost of starting a new business. SMEs can now experience the spirit of \u201cMake in India\u201d in its true sense. If you are planning to start off a business, now is the time. Apply for a loan, put up your papers and get things rolling.&nbsp;<\/p>\n\n\n\n<p class=\"has-text-color has-vivid-cyan-blue-color\">Also Read:&nbsp;<a href=\"https:\/\/www.indifi.com\/blog\/best-tax-saving-practices-for-shop-owners\/\">Tax Saving \u2013 Best Practices For Shop Owners&nbsp;&nbsp;<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Logistics_Cost_dropping_off\"><\/span><strong>Logistics Cost dropping off<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Previously the state government used to take road and transportation tax from the traders each time they crossed a state. But now, there is only one tax throughout India. This action has not only reduced traffic at the state borders but also resulted in quicker and cheaper delivery of goods. <strong>GST <\/strong>has helped reduce the final cost of the product as well. If you are thinking of getting your own logistics service, you can easily set-up a new business, with trouble-free loans and promising returns.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"One_Nation_One_Tax_%E2%80%93_GST\"><\/span><strong>One Nation, One Tax &#8211; GST<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With digitalization and improving technology, \u201cThe world is your marketplace\u201d they said, and yet there was no flexibility of selling products across different states without paying extra taxes and facing local market politics. Even if some traders took the risk, it sure did affect the consumer who ended up paying extra.<strong> <\/strong>GST has resolved this issue with ease \u2013 ending market monopoly by traders and opening new prospects for growing<strong> <\/strong>SMEs.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Digitalization_and_Enhanced_Compliance\"><\/span><strong>Digitalization and Enhanced Compliance&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With digitalization comes online process and better compliances.&nbsp; The taxing is online now, which means \u2013 faster and automated processes, less human error, no unnecessary bureaucracy and improved data management. The online GST process also helps you get the certifications and GSTN instantly and also file ITRs and tax liability adjustments on time.&nbsp;<br><\/p>\n\n\n\n<p>Nothing is perfect. Therefore it\u2019s my duty to tell you that GST may have a few flaws like &#8211; reduction in duty threshold, excess working capital requirement and increased compliance cost. Also, as an SME unit, you must have faced difficulty in redefining your accounting packages and hiring a new resource that can understand GST and can assist you in determining input tax credits, new tax rates and even HSN codes on invoices.<\/p>\n\n\n\n<p class=\"has-text-color has-vivid-cyan-blue-color\">Also Read: <a href=\"https:\/\/www.indifi.com\/blog\/key-points-on-understanding-the-gst-number\/\">Key Points On Understanding The GST Number<\/a><\/p>\n\n\n\n<p>Even if you have these challenges coming your way, be ready to face them fiercely as all of this is for your greater good.&nbsp; GST has a lot more hidden advantages than the few challenges I have listed for you. Just focus on flourishing your business as this government policy is here to stay.&nbsp;<\/p>\n\n\n\n<p>For any further capital, requirement contacts Indifi.com, your digital partner for hassle-free, <a href=\"https:\/\/www.indifi.com\/\">instant business loans<\/a>.\u00a0<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India has always been a gold mine for aspiring entrepreneurs who want to establish new businesses and flourish their SMEs. But the game leveled a notch higher since GST came into existence. It was indeed a big decision for the Indian economy to bring every indirect form of tax under one roof. Almost 2.5 years [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[141],"tags":[65,66,67,676,677],"_links":{"self":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/2981"}],"collection":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/comments?post=2981"}],"version-history":[{"count":4,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/2981\/revisions"}],"predecessor-version":[{"id":4081,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/posts\/2981\/revisions\/4081"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media\/2982"}],"wp:attachment":[{"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/media?parent=2981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/categories?post=2981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.indifi.com\/blog\/wp-json\/wp\/v2\/tags?post=2981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}