{"id":6117,"date":"2017-07-08T05:45:11","date_gmt":"2017-07-08T05:45:11","guid":{"rendered":"\/blog\/?p=6117"},"modified":"2025-01-16T15:35:20","modified_gmt":"2025-01-16T10:05:20","slug":"impact-of-gst-on-startups","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/loan-for-business\/impact-of-gst-on-startups\/","title":{"rendered":"Impact of GST on Startups"},"content":{"rendered":"\n

The Goods and Services Tax (GST) will replace all types of indirect taxes providing relief to the taxpayers. The new tax regime is expected to boost the Indian economy and simplify the tax procedure. The GST will be levied on sales, production, and consumption of goods and services at the state and central government levels. <\/p>\n\n\n\n

Know More<\/a><\/div>\n\n\n\n

Here\nare four effects of the new tax regime on startups.<\/p>\n\n\n\n

1. Immunity\nfor new ventures<\/em><\/strong><\/p>\n\n\n\n

Ventures\nwith a turnover of INR 5 lakh and more are required to register for VAT and pay\nthe same. However, GST increases this limit to INR 20 lakh (10 lakh for northeastern states) and higher. Furthermore,\ncompanies with turnover between INR 20 lakh and INR 50 lakh will be able to opt\nfor the composite scheme. In addition,\nGST will make it easier for entrepreneurs to start their ventures. Under the\npre-GST regime, companies required VAT registration from the sales tax\ndepartment along with several processes and fee payments in every state. GST\nnow provides a uniform procedure enabling centralized registration providing an\nencouraging environment for entrepreneurs. This may also see an increase in the\ndemand for business loans as\nentrepreneurs take advantage of the positive post-GST environment.<\/p>\n\n\n\n

2. Relief\nfor services sectors<\/em><\/strong><\/p>\n\n\n\n

Some\nservice sector businesses like restaurants are categorized as sales and service\nproviders. As a result, they must adhere to two tax regimes which are food and service. Such businesses are\nrequired to calculate service tax and VAT separately, which makes the entire\nprocedure cumbersome and complex. GST offers relief to ventures in the sales\nand services sector by combining the two categories wherein the taxes are\ncalculated on the total amount.<\/p>\n\n\n\n

3. Logistics\nand transportation cost reduction<\/em><\/strong><\/p>\n\n\n\n

Interstate\nmovement of goods will become easier in the post-GST. Border checks will reduce\nand this will significantly cut down the transportation time. This will also\nbenefit companies as it will reduce their transportation and logistics\nexpenses. Businesses will be able to free up working capital by decreasing\ninventories. In addition, the need for commercial\nloans may witness an increase as companies gear up for new opportunities\nthat become available after GST implementation.<\/p>\n\n\n\n

4. Simple\nrevenue systems<\/em><\/strong><\/p>\n\n\n\n

Entrepreneurs\nspend lots of time and energy in managing and complying with multiple tax\nrequirements and regulations. They need to understand and adhere to a large\nnumber of regulatory requirements in different states, which makes the entire\nprocess of starting a new venture very complicated. GST will not only override\nall the various taxes but also simplify the entire regulatory procedure.<\/p>\n\n\n\n

There may be certain issues that arise with the implementation of GST, such as an increase in the cost of a business loan<\/a>. However, in the long-term GST will benefit startups by providing a positive environment for new ventures.<\/p>\n\n\n\n

Apply Now<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The Goods and Services Tax (GST) will replace all types of indirect taxes providing relief to the taxpayers. The new tax regime is expected to boost the Indian economy and simplify the tax procedure.<\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":6120,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[],"class_list":["post-6117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan-for-business"],"yoast_head":"\nImpact of GST on Startups - TATA Capital Blog<\/title>\n<meta name=\"description\" content=\"Explore the impact of GST on startups, including immunity for new ventures, simplified service tax, reduced logistics costs, and easier revenue systems.\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Impact of GST on Startups - TATA Capital Blog\" \/>\n<meta property=\"og:description\" content=\"Explore the impact of GST on startups, including immunity for new ventures, simplified service tax, reduced logistics costs, and easier revenue systems.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/impact-of-gst-on-startups\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2017-07-08T05:45:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-01-16T10:05:20+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/01\/Tata-Capital-35-Impact-Of-GST-On-Startup.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Tata Capital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tata Capital\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/impact-of-gst-on-startups\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/impact-of-gst-on-startups\/\",\"name\":\"Impact of GST on Startups - 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