{"id":6577,"date":"2017-06-06T03:44:07","date_gmt":"2017-06-06T03:44:07","guid":{"rendered":"\/blog\/?p=6577"},"modified":"2025-02-03T15:09:29","modified_gmt":"2025-02-03T09:39:29","slug":"how-gst-will-impact-business-loans","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/loan-for-business\/how-gst-will-impact-business-loans\/","title":{"rendered":"How GST Will Impact Business Loans?"},"content":{"rendered":"\n

The much-awaited Goods and Services (GST) Bill was finally approved in the Houses of Parliament. This will be the biggest change that indirect taxes in independent India have gone through. Implementation of GST from 1st<\/sup> July 2017 will make the tax system simpler and there will be several more benefits under this regime. The government expects to see a boost in tax revenues and improve in compliance after the implementation of GST.<\/p>\n\n\n\n

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

1. Impact on business loans<\/strong><\/p>\n\n\n\n

Business\nloans are likely to become slightly expensive after the implementation of GST.\nThis is because the service tax on a business\nloan is currently 15%; however, GST will be levied at the rate of 18%.\nThis will increase the processing fees on these loans making it marginally\nexpensive for borrowers. Nonetheless, the potential growth opportunities\navailable to businesses make this small increase almost negligible in the\nlonger term.<\/p>\n\n\n\n

2. Importance of GST<\/strong><\/p>\n\n\n\n

Even\nthough GST will make availing of a business loan marginally more expensive, it\nwill bring about positive change for business owners. Here are four ways in\nwhich GST will be an important tax modification, especially for business\nowners.<\/p>\n\n\n\n

3. Simpler tax systems<\/strong><\/p>\n\n\n\n

With\nthe elimination of multiple taxes and a singular tax structure, the procedures\nwill become simpler. The market expects a reduction in paperwork and\ncomplexities in accounting principles. Simple tax systems will make it easier\nfor owners to conduct business. <\/p>\n\n\n\n

4. Competitive pricing<\/strong><\/p>\n\n\n\n

Since\nGST will eliminate all other types of indirect taxes, the prices paid by\nconsumers are expected to decrease. As a result, there would be a boost to\ndemand and consumption, which will benefit business owners.<\/p>\n\n\n\n

5. Boost in exports<\/strong><\/p>\n\n\n\n

As\nproduction costs decrease in the post-GST regime, the Indian goods and services\nwill be priced competitively in international markets. Therefore, exporters\nwill be able to compete with global manufacturers and boost exports. Lenders\nare expected to take advantage of this potential growth by increasing\ndisbursement of commercial loans\nto businesses.<\/p>\n\n\n\n

6. Un-fragmented national market<\/strong><\/p>\n\n\n\n

With GST entry tax barriers will be eliminated, which will result in an un-fragmented national market for goods and services. As a result, sourcing, warehousing, and distribution are expected to become easier and quicker among the states. Furthermore, businesses will not have to pay interstate taxes, which will increase cash flows that may be used to expand their business. Banks and non-banking financial companies (NBFCs) expect to see an increase in the demand for business loans<\/a> as organizations try to expand their ventures in the post-GST era. NBFCs like Tata Capital offer business finance to small and medium enterprises (SMEs). These funds may be used for various purposes like operational expenses, buying new plant and machinery, or expanding into new markets. <\/p>\n\n\n\n

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

The much-awaited Goods and Services (GST) Bill was finally approved in the Houses of Parliament. This will be the biggest change that indirect taxes in independent India have gone through.<\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":6396,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[],"class_list":["post-6577","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan-for-business"],"yoast_head":"\nHow GST Will Impact Business Loans? - TATA Capital Blog<\/title>\n<meta name=\"description\" content=\"Learn about the impact of GST on business loan interest rates and processing fees in India, and understand how it affects your borrowing costs.\" \/>\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=\"How GST Will Impact Business Loans? - TATA Capital Blog\" \/>\n<meta property=\"og:description\" content=\"Learn about the impact of GST on business loan interest rates and processing fees in India, and understand how it affects your borrowing costs.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/how-gst-will-impact-business-loans\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2017-06-06T03:44:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-03T09:39:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/01\/How-can-you-smartly-invest-to-get-maximum-benefits-from-GST.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\/how-gst-will-impact-business-loans\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/how-gst-will-impact-business-loans\/\",\"name\":\"How GST Will Impact Business Loans? 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