SMEs, not used to complex paperwork and laws, will have to reinvent themselves if they have to survive under the GST regime.
Vijay Prakash Jain, 75, a trader and national general secretary of a traders’ association, the Bhartiya Udyog Vyapar Mandal, has not let his physical frailties weaken his resolve to fight for traders. Jain, who trades in groceries, chemicals and dry fruit, and also runs a travel and tourism business from the narrow lanes of Daryaganj in old Delhi, is gearing up for another battle – adapting to the Goods and Services Tax or GST. GST provisions, he says, are so complex that even though all the processes are online, he will not be able to file returns on his own. He will have to hire a chartered accountant. “Our compliance cost rose during the shift from sales tax to VAT (value-added tax). Now that we are going from VAT to GST, it will go up again,” he says.
Like Jain, many small traders and owners of micro, small and medium enterprises, or MSMEs, are facing the uphill task of preparing for the new GST system that will come into force from July 1. This is being called one of the biggest tax reforms that will make businesses stronger and tax administration & compliance easier. It will also plug indirect tax leakages by bringing into the formal economy a large part of the informal sector, including small traders and many MSMEs. However, for MSMEs and small businesses, adjusting to the system will involve huge costs (see Challenges Ahead). They may even lose business, as the new system of seamless input credit encourages companies to do business with players whose compliance record is perfect or at least near perfect. The system has been designed in such a way that unless the records submitted by all the parties in the supply chain match, no party will be able to claim input credit. For now, though, this is not the biggest headache for MSMEs.
The Problems
Esta historia es de la edición May 07, 2017 de Business Today.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición May 07, 2017 de Business Today.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
"Moving to cloud helped us grow❞
What was the problem you were grappling with?
She's Got Time
MORE WOMEN ARE BECOMING WATCH CONNOISSEURS, SEEKING OUT BOTH JEWELLED AND TECHNICAL WATCHES FOR THEIR STYLE AND CRAFTSMANSHIP
RISING STAR
PARUL GULATI IS a name that's been steadily gaining prominence in the Indian entertainment industry after she appeared on season 2 of Shark Tank in 2023. She has become a multifaceted personality who effortlessly transitions between acting and entrepreneurship.
Building on a Legacy
WHEN ZAHABIYA KHORAKIWALA stepped into her role as Managing Director of Wockhardt Hospitals over a decade ago, she confronted formidable challenges that have since turned into achievements.
LEADER IN INNOVATION
AS FEDEX'S PRESIDENT (Middle East, Indian subcontinent and Africa), Kami Viswanathan has a lot on her plate.
WAITING IN THE WINGS
Here are those who missed out as they have not yet completed a year in office; they'll be strong contenders in 2025
A DECENT PROPOSAL
IN TODAY'S WORLD OF TRYING TO CREATE AN EQUITABLE SPACE, BOTH MEN AND WOMEN CONTRIBUTE TO THEIR HOUSEHOLDS. WOMEN ARE ENCOURAGED TO HAVE THEIR OWN SAVINGS POOL AND INVESTMENT ROUTINE. GIVEN THIS, HOW SHOULD FUTURE BRIDES APPROACH FINANCIAL PLANNING?
Women and the STEM Bias
EMPOWERING WOMEN IN STEM WILL NOT ONLY BENEFIT INDIVIDUALS, BUT ALSO STRENGTHEN THE ENTIRE INDUSTRY, DRIVING INNOVATION AND PROGRESS.
ROCKET WOMEN
WOMEN IN INDIA ARE NOT ONLY VENTURING INTO SPACE BUT ARE ALSO STARTING TO SPEARHEAD THE COUNTRY'S EFFORTS IN THE GLOBAL SPACE RACE.
ONE STEP FORWARD
THE NUMBER OF WOMEN INDEPENDENT DIRECTORS IS GROWING STEADILY, BUT IT'S A LONG WAY FROM GENDER PARITY. MUCH MORE NEEDS TO BE DONE TO BREAK THE GLASS CEILING IN BOARDROOMS.