The implementation of the GST has been long awaited in the federal country of India. The implementation of the GST promises easy trading across the state borders of the country and better compliance for the businesses that are burdened under several taxes imposed by the Central as well as the State governments.
When taken in the prospective of the longer term, the GST can help in the reduction of the overall cost of operations for the businesses that would make them more competitive. The anticipated ease of trading can bring about effective economics growth in the country. Around 45 per cent of the GDP contribution in the country is from the SMEs (Small and Medium Enterprises). Therefore, it is vital for the SMEs to understand the importance of the GST and its implementation. The success of the GST implementation depends greatly on the participation of the SMEs which in turn will be benefited in various manners.
GST remains complicated for various businesses. The legislation of the GST is very significant to be understood by the SMEs in a proper manner. The seamless availability of the credit can be used to determine the cost of compliance and the level of competitiveness of the SMEs in the era of the GST. As the law has allowed several businesses to claim their Input Tax Credit, this will reduce the cost of operation in a substantial manner with respect to the SMEs and therefore, will result in the increase of the profit margins of the small and medium enterprises.
GST has been long-awaited by the SMEs to bring the expected growth in the Indian economy with the ability of the SMEs to claim their input credibility and to re-think about the compliances as a daily part of the business operation.