Under the present tax laws, any business dealing in goods with earnings going beyond Rs. 10 lakh is needed to get listed with state tax authorities and get a tax verification number. Likewise, a service provider is needed to get a registration as soon as his earnings go beyond Rs. 9 lakh.
One of the biggest benefits of the GST rule is an apparent taxation system. Most of the compliance methods will be completed via online process only. These involve taxpayer listing, return compliance, tax payment and refund claims. Many of the startups do not have resources to appoint specialists or organize an out-and-out resource to take care of all of this compliance.
Liquidity is one of the biggest challenges that startups confront today. Most of these startups are bootstrapped and do not get funding all through starting phase. In such a condition, various times under the present tax regime, their working assets get fixed with tax authority as a compensation claim.
Even though we are at a very starting stage and different rules and processes are yet to be confirmed, we can carefully think that GST will also be sustaining different initiatives of the government that involve Startup India and Digital India and. Therefore, startups will have more chances to utilize and they can also put up the change in business model needed under GST return filing, being more bendable in running their operations.
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