Hello Mumbai Business Desk
The Goods and Services Tax (GST) brought together multiple central and state taxes into a single, unified system.
GST working has steadily evolved through rate rationalization and digitalization, becoming the backbone of India’s tax working.
The recent revision was part of the 56th meeting of the GST Council, which itself indicates the effort of continuous evaluation of the structure based on various inputs from the Stakeholders. This revision has been based on ensuring ease of business for all.
With a simplified two-slab structure (5% and 18%) the sweeping rate reductions across sectors has focused on common-man, labour intensive Industries, farmers and agriculture, health which are the key drivers of the economy.
The impact is expected to be experienced with smoother cash flows, strengthen state revenues, and boost demand driving consumption and manufacturing growth across India. Reduction of Taxes is expected to impact costs across segments like Food, Consumer electronics, Housing, Automotive, Agriculture, Services, Toys, Education, Healthcare and insurance. This means an increased revenue for the businesses across these sectors as well as more spending power for the consumers.
The change in taxation will directly influence the Start Up Ecosystem. We Spark Start Up Association (WeSSA) has been working closely with MSMEs as well as the Start up eco-system. Large number of start up are spread across the mentioned sectors and they can expect better growth in their revenues with a right strategy. Overall Financial , liquidity and revenue management has been a challenge all Sectors and is more higher for Start Ups. Zero or lower tax on inputs will provide a much needed boost to the Start ups.
With major sectors discussing the impact of trade wars and the negative growth impact, the GST revision provides disposable income, increased consumption and these are expected to better adoption of technology and increased investments for Start Ups.
The Start Ups should revise their strategy to include the benefits in their strategy to the consumers as well as build the impact into their growth story while engaging their Investors.
