A+| A| A-
Small Businesses in the GST Regime
Reforms must bring simplicity and not disruption. Goods and services tax was an opportunity for India to reform its cobweb like indirect taxation structure and reboot the system afresh. Unfortunately, the ground realities suggest otherwise. The way GST has been introduced is too onerous for small businesses. This may further thwart their growth.
Finance Minister Arun Jaitley once rightly said that a delayed goods and services tax (GST) is better than a flawed one. Unfortunately, this reality was ignored on 1 July 2017 when GST was rolled out in India. Conceptually, GST aims to create a uniform market by removing existing distortions, barriers, and complicated multi-tiered tax structures. The Indian version of GST that has three layers—state GST, central GST, and integrated GST—with multiple rates, however, does not look simple.
The chaos witnessed since the day of the GST roll-out exposes the unpreparedness of the implementation machinery. While we have had the benefit of learning from the experiences of other GST jurisdictions, the current fiasco was forthcoming in a heterogeneous nation such as India with glaring disparities and a legacy of disconnect between policymaking and implementation. The formal sector, equipped with resources and access to information, is somehow coping with this disruption, but the first shock wave of GST has swept small businesses off their feet. While an in-depth GST impact analysis is difficult at this stage, this article focuses on a few critical provisions of the GST and their possible impact on small businesses.
Dear Reader,
Or
To gain instant access to this article (download).
(Readers in India)
(Readers outside India)
