Select Your Location
Introduced as the One Hundred and First Amendment Act of The Constitution in the year 2016, GST or the Goods and Services Tax Act is the most recent modification or reform to the indirect tax act of the government of India. The GST Council is responsible for the implementation of Goods and Services Tax in each state and each individual sector and industry existing in India. The Union Minister of Finance of India would act as the chairman of the GST Council.
Let us try and understand what will be the Impact of GST on Startup Sector in India.
Table of Contents
GST is considered to be a reform in the taxation scheme followed in India. It is said to unify indirect taxation in precisely two ways:
An introduction of GST regime would finally try to unify all the individual states of the largest democracy of the world, India, at least in terms of indirect taxes paid by the residents of the country. In turn, the implementation of GST would lead to easier enforcement and efficient administration of the tax system. GST would also reduce the burden of multiple taxing from consumers. Implementation of GST would also enable free movement of goods and services within the country from one state to the other, thus making the availability of such goods and services easier. The implementation of GST is also important for reducing overall paperwork and time lags in the entire economic system of the country.
A start-up, according to the definition of the government of India, would include all those firms and business initiatives which stand to fulfil the following propositions. The organizations which:
For all such start-up organizations, the government of India has launched the Start-up India Campaign. The main motive behind this campaign is to invite innovative brains to start their entrepreneurial innovations in India. This would help in increasing employment, empowering entrepreneurship, and boost economic growth within India. In order to facilitate this growth, the government of India in accordance with the Department of Industrial Policy and Promotion has laid down a 19 point action plan, which aims to reduce hindrances in the process of such entrepreneurial ventures while promoting and supporting their growth, both in terms of revenues and reach.
The main idea behind the launch of such an initiative has been the gap analysis where people with the requisite talent, ideas, innovative abilities, and capabilities are unable to utilize their abilities completely due to the lack of resources. The government of India, through this initiative, wants to accelerate economic growth and create wealth by utilizing these fertile brains effectively and efficiently. The 19 point action plan, also known as the Start-up India Action Plan, visualizes the formation of several incubation centres across the country. This action plan, further, tries to ease the process of the setting-up of business, tries to ease patent filing, provide requisite tax exemptions, provide an INR 10,000 crores corpus fund, and provides a faster exit mechanism, among other benefits.
According to performance indices, as published by reputed sources, India has performed fairly well during 2016 at least in terms of a number of firms. India stands at a third position in terms of the start-up ecosystem in the world economy, ranking just below US and UK. But such reports present a grim report in terms of performance of such start-ups in India. The start-up sector in India has been found to be stagnating. The total funds raised by the start-ups in India have been found to decline by almost twenty per cent on a year-on-year basis in 2016.
The One-Nation, One-Tax Regime under GST is assumed to prove beneficial for the start-up sector. Some of the impact of GST on startup sector is as below:
The biggest tax reform of India since its independence in 1947, GST is presumed to transform the economy of India. As far as the Indian start-up sector is concerned, GST would provide a positive atmosphere to propel the growth of start-up ecosystem due to the reduction of processes and hindrances, and be streamlining of the entire tax compliance process. Thus, the Indian start-up sector is bound to gain considerably by the implementation of the GST regime.
GST is an entirely new tax regime which requires to be understood well and especially impact of GST on startup, thereby reap the rewards out of it.
Read our article:Composition scheme under GST & Presumptive Taxation Scheme
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
Black money has been the subject of heated political debate in India for a long time. Successiv...
The Apex Court pronounced a judgement in the case titled Tata Motors Vs The Brihan Mumbai Elect...
Since economies are moving towards digitalisation and making it feasible to conduct transaction...
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
Are you human?: 5 + 6 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
If news reports are to be believed, the Central Economic Intelligence Bureau is proposing 18% GST on bitcoin transa...
20 Jan, 2021
GST registration is mandatory for persons whose turnover exceeds Rs. 40 lakhs & Rs. 10 lakhs for North Eastern...
29 Apr, 2021
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!