The goods and services (GST) tax was introduced in 2017 with the aim to reduce indirect taxes levied on goods and services. Before GST was introduced, the taxation system was complex and made it particularly hard for medium and small sector enterprises and startups to sustain themselves. However, GST has simplified things to a great extent, which is why it is important for all businesses to get GST verification. This can help companies get easy SME loans, save money, and reduce overall corruption in the system.
Read on to find out the benefits of getting GST verification for your business.
- It can streamline all taxes: Before GST, there were numerous taxes that businesses had to pay, such as luxury tax, central sales tax, etc. This made the process of paying taxes extremely complicated and expensive. However, with GST verification, you can pay all your taxes under one head. For instance, earlier a business had to get separate VAT registration in every state. This was a very time-consuming process as every state functioned differently and followed a diverse method. But with GST verification, the need for VAT is eliminated.
- It can help you get a business loan: GST verification helps your business get a business loan without any hassles. Banks and other lending institutions look for a GST invoice before sanctioning the SME loan as it helps them establish faith in your company. GST also offers more transparency to the lender. In the absence of this document, the lender may reject your loan.
- It can help reduce taxes: Businesses with GST verification can benefit from the composition scheme. This scheme allows small businesses to pay GST at a fixed rate of turnover. This way, businesses with an annual turnover below Rs. 1.5 crore (Rs. 75 lakhs in the case of Himachal Pradesh and North-Eastern states) can choose composition schemes to lower their tax liability and avoid tiresome tax filing and compliance methods.
- It eases the process: GST verification can reduce lengthy paperwork. You can pay GST, request a refund, etc. online. There is no need to like a chartered accountant to file your taxes as the process is extremely straightforward and can be done by anybody. It is also simpler to keep track of your taxes and maintain records. This further simplifies the process of applying for a business loan too, as you do not have to produce multiple documents to show as proof of your previous tax filings.
GST verification can be a boon to businesses in many ways. It brings in uniformity and transparency, and saves costs in the long run. You can use a business loan EMI calculator to understand how much you save each month exactly. The shortened tax filing process also enables you to focus on more important aspects of your business and help it grow.