The GST law was implemented and no one was aware of its working. It was chaos and everyone was perplexed as to how it would benefit them. But then several statements and assurance from the government as well as experts in the field assisted people in coming around this new law. If you are just starting you can also take help of GST advisory services.
According to the Ministry of Micro, Small, and Medium Enterprises, as of March 27th, 2022, more than 7.9 million MSMEs are operating in India. Small and medium-sized enterprises (MSMEs) account for over 30 percent of all U.S. manufacturing.
According to Statista, as of the 2016 fiscal year, almost 110 million Indians were employed by micro, small, and medium-sized enterprises (MSMEs). The percentage of MSME jobs in urban regions is more significant than in rural ones. In the period under consideration, the nation’s largest source of new jobs comes from micro companies.
The Indian government introduced the GST law on March 29th, 2017, and it went into effect on July 1st of that year. With a single market and a more manageable tax structure, the government expected a boost in productivity, particularly among micro, small, and medium-sized enterprises
Benefits
Below are the several benefits one could have through GST:-
1. Fewer indirect taxes.
2. Since GST requirements must be met, submitting a GST return does not need much time.
3. GST establishes market-based pricing for goods and services.
4. In addition to reducing tax obligations and rates, GST offers a composition plan to submit taxes at a flat rate.
5. The Goods and Services Tax (GST) registration procedure is entirely digital making it accessible from anywhere and not needing external help.
6. Once e-commerce companies are GST registered, doing business across state lines becomes much more straightforward.
7. With the use of an internet system, GST has brought order to formerly unregulated commercial sectors.
8. Once you’ve compiled, claiming the ITC is a simple process.
9. Under GST registration, tax evasion is easier to track.
10. Once a GSTIN is issued, it can be used for any GST-related transactions.
The goal of the government is to expand GST’s reach and make it applicable to a broader range of businesses inducing a desire to buy and use goods and services.
How do MSMEs handle complying with GST?
For 37% of businesses, the transition to GST compliance would take more time than they spent on company taxes before GST was implemented.
Since the introduction of the GST, half of the businesses have reported an increase in their monthly accounting expenses.
Over three-quarters of businesses said that matching invoices for inputs and outputs would be the most challenging aspect of GST implementation. Only 45% of businesses have had a positive experience with GST, while 24% have had a negative one.
Connection problems, login in delays, and information submission failures are all difficulties often reported by users of the GSTN website.
GST Recommendations For MSMEs
Currently, papers more significant than 5 MB cannot be uploaded to the portal; thus, this restriction will need to be raised.
In the Income Tax Department, a separate judiciary is needed due to the vast number of potential legal and factual disputes that may arise.
Electronic invoices are only valid for 24 hours; thus, either that period has to be extended, or the invoices should be sent to businesses automatically.
E-invoicing can be implemented if the annual revenue exceeds Rs. 10 cr. Effective from October 1, 2022, this is not permitted for Micro, Small, and Medium-Sized Enterprises.
New registrations that fall under state or central authority are challenging to learn. New registrants or taxpayers often confront misunderstandings about the information provided by their state authority agency.
Although GST registration may be completed online, physical verification is handled by individual state GST offices. Therefore, SMEs should speak with the GST department’s employees who provide anti-corruption measures.
Conclusion
The government, aware of the tremendous contribution of MSMEs, takes several measures to promote their development. The same has eased several MSME-related compliances as part of the GST system.
For instance, the formerly applicable exemption limit for commodities, set initially at Rs. 20 lakhs, has been raised to Rs. 40 lakhs. The annual cap was raised for the composition program to Rs 50 lakhs for services and Rs 1.5 cr for commodities. The composition’s merchants would be the only ones authorized to provide the service.
The goal is also to increase the number of taxpayers in MSMEs. This can put a load on them regarding compliance. But in a futuristic view, the same GST law would be drawing competition and would drive MSMEs on an equal scale with larger corporations.
If you are still confused about the law you can always take the assistance of a GST consultant in Jamnagar or a GST consultation services in Jamnagar which will provide you complete services for all your requirements for GST.
