Unlike the earlier taxation system, people before starting their business had to undergo VAR registration and get registered in each state where the business has to carry out. However, after the GST implementation, there will be a single tax and people who are willing to start a business had to get listed under GST.
2. 2Copyright GST Keeper @ 2017
Positive Impact
• Ease of Doing Business
• Expansion of business
• Elimination of the distinction between
goods and services
• Reduced tax burden
• Reduced logistics cost
3. 3Copyright GST Keeper @ 2017
Ease of Doing Businesses
Unlike the previous taxation system, people before
starting their business had to undergo VAR registration
and get registered in each state where the business has
to carry out. However, after the GST implementation,
there will be a single tax and people who are willing to
start a business had to get registered under GST. Thereby
providing the ease of doing businesses.
4. 4Copyright GST Keeper @ 2017
Expansion of Businesses
Most businesses used to restrict their
businesses during the previous taxation
system due to interstate taxes and a lot
of checkpoints which are extremely
complicated procedures. Due to this
reason, they used to limit their business,
however, after GST it is much simpler to
follow the complete GST rules and
conduct the businesses from one state
to another.
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Elimination of the distinction between
goods and services
Unlike previous taxation system in
which the service tax was applicable
to services while VAT was applicable
to goods. After the GST, there is no
such distinction between the services
and goods and they both are treated
as business. Thus, they are put into one
category. This way, the government
has made the invoicing simpler and
convenient for the business owners.
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Reduced tax burden
The GST has opened doors for small businesses
too to gain a respectful position in the
competitive market by reducing the tax
burden. The composition scheme is one such
advantage to small businesses in which they
have to pay a nominal taxation amount to
the government every quarterly. This way
they’ll be able to focus more on their business
growth and indirectly will be contributing to
the country’s economy.
7. 7Copyright GST Keeper @ 2017
Reduced logistics cost
Previously, e-commerce
businesses or any other business
that is supplying the goods and
services from one state to another
has to pay several taxes such as
entry tax and octroi. However,
now after the GST, there is no such
GST rule. The transaction are
made more simple and easier for
the business owners by reducing
the logistics cost or the
transportation cost to a great
extent by replacing such indirect
taxes.
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Negative Impacts
• Loss to freelancers
• Reverse Charge Mechanism
• Technological Challenge
• Missing Trader Problem
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Loss to freelancers
I you are a freelancer and do not have a
fixed place to do your business, under GST,
you need to get registered as a ‘casual tax
payer’. It is not in favor of freelancers and is
considered as a harsh GST rule.
10. 10Copyright GST Keeper @ 2017
Reverse Charge Mechanism
If you are a registered individual and you
purchase any item from a non-registered person
under the GST, you have to pay tax on such
purchases which is known as reverse charge
mechanism.
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Technological Challenge
In India, there are still many people
who do not know how to operate
computers and software. After GST
everything has been done online
which is again a drawback and an
additional investment for
businesses as they have to hire CAs
for this job.
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Missing Trader Problem
There is a rule in GS, that you’ll be
credited with the input of the
previous person in the supply chain
has paid the taxes which is again a
difficult rule to follow. Due to this
reason, many registered people
have to face difficulties.
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