Impact Of Gst On Small And Medium Enterprises Smes

When it comes to GST, there are both positive impacts and challenges that are faced by small and medium enterprises. If a business operates across different states, your business would have required VAT registration, before GST was introduced. Different tax rules in different states incurred high procedural fees. With the introduction of GST, starting a business as well as expansion has become easier, which is an added advantage for SMEs. 

Before GST was introduced, businesses with a turnover of more than Rs. 5 lakhs needed to pay a VAT registration fee. Now with GST, only businesses that have a turnover of more than Rs. 25 lakhs would have to pay, which relieves over 60% of small dealers and traders. Under the GST regime, no entry taxes are charged for goods manufactured or sold in any part of India. However, there has been a duty threshold that has led businesses to be wary of the GST bill. GST rates have increased from 15% to 18%, which has created problems for taxpayers in small and new businesses.