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GST Benefits For Startups In 2024
Posted On 05-07-2024

The Goods and Services Tax (GST) changed the Indian business world big time in 2017. It replaced a complicated indirect state and central tax system with one streamlined system, making things easier & clearer. But how does GST help startups in 2024? Let’s dive in to find out the main perks you can get with Clearbiz’s help.

Problems Startups Face with Taxes

 New businesses always struggle with tricky tax rules. Before GST was introduced, startups dealt with taxes piling up at different steps of making and selling a product/service. This was tough since it made their tax expenses greater and gave them more paperwork to deal with. Thankfully, GST eased this mess, giving startups a chance to benefit from the benefit of Input Tax Credits and an easier taxation system.

Benefits of GST for Startups in 2024

GST Registration Threshold

 Not all startups need to sign up for GST right away. The current limits give them some time before the designated turnover is reached:

  • ₹40 lakhs for businesses selling goods (₹20 lakhs in some special states).
  • ₹20 lakhs for businesses offering services (₹10 lakhs in some special states).

 This lets young businesses keep their focus on core stuff instead of worrying over complicated GST rules right from the start.

 

GST Composition Scheme: A Simplified Option for Startups

The GST Composition Scheme offers a sigh of relief for small businesses and startups in India. Designed for taxpayers with a turnover below ₹1.5 crore (₹75 lakh for North-Eastern states and Himachal Pradesh), it simplifies GST compliance and reduces the tax burden.

Benefits of the Composition Scheme:

Simplified Compliance: The scheme requires filing just one annual return (GSTR-4) instead of multiple monthly or quarterly returns. This frees up valuable time and resources for you to focus on growing your business.

Lower Tax Rates : Enjoy a flat tax rate based on your turnover, significantly reducing your overall tax liability compared to the regular GST scheme.

 

Input Tax Credit (ITC)

 One of the best things about GST for startups is claiming Input Tax Credit (ITC) on what you buy for your business. This cuts down the tax expenses on your final products or services. For example, if you spend ₹100 on raw materials (with ₹18 being GST), you can claim this ₹18 ITC and lessen your tax bill, freeing up more cash flow.

 

Simplified Tax Compliance

 Gone are the days of juggling many tax offices under the old system. Now, thanks to GST’s central online filing system, compliance is way easier. Register for GST, file returns, and pay taxes all online from one place – saving both time & money.

 

Smooth Movement Between States

 Before GST, moving goods between states meant dealing with many permits and check posts – causing delays and extra costs. But now? GST clears these roadblocks, letting goods move smoothly across India. This is huge for startups wanting to expand & reach customers nationwide.

 

Transparency and Certainty

 GST brings clarity to the tax game. Predictable tax rates using a single HSN code for your product or service make financial planning easier – super important for startups eyeing growth and funding.

 

 

 Special Tips for E-commerce Startups

 E-commerce companies have special GST points to think about:

  • Place of Supply Rules: These rules decide where a sale happens for tax reasons. It’s key for e-commerce startups to know these so they charge the right GST.
  • Tax Collection at Source (TCS): E-commerce platforms might need to collect TCS when a sale happens. Clearbiz can help you follow these rules smoothly.

 

Recent Updates in GST Rules (as of June 2024)

 GST rules change now & then. Keeping up-to-date makes sure you don’t face fines. Clearbiz can keep you posted on new changes that could impact your startup like HSN codes updates or new filing steps.

 

Conclusion

 GST has loads of perks for startups in 2024 – from easy compliance and better cash flow to fair competition & more transparency. Clearbiz is here to guide you through GST registration, return filings, and other business needs so everything runs smoothly without any hiccups from taxes holding you back.

 Want to tap into the power of GST for your business? Get in touch with Clearbiz today! We’ll steer you through every step so you’re always ticking all the boxes right.