Doing Business in IndiaApril 23, 2017
GET INDIA 24th aprilMarch 18, 2018
In the past, the structure of Indirect taxes was very complicated in India. The Central and State Government levied different types of taxes. Taxes like Value Added Tax (VAT) on purchasing goods & services, Excise Duties, Import Duties, Luxury Tax, Central Sales Tax, Service tax etc made it almost impossible for businesses to move forward with fast pace.
But recent implementation of GST that is Goods and Services Tax changed the scenario of businesses in India. GST is nothing but a single taxation system implemented to abolish all indirect taxes. This system of tax that was first introduced by France and later adopted by different countries like Canada, Singapore etc. is anticipated to give a huge boost to the economy.
GST is applied on goods and services at the place where final or actual consumption happens.
Easy & Lean Tax Structure – New tax system has replaced all the other indirect taxes levied, creating an easy, workable and lean tax structure. Number of departments will reduce which in turn may lead to less corruption. Businesses can now operate with ease and with transparency.
Unified Indian Market – Old system had different tax structure for different states that made business operations more difficult. With its new tax regime, India is providing an opportunity not only for big businesses but also to SME’s who can benefit from this transformation. India is no more a divided market but has transformed itself into a one huge unified market. .
Lower Business Cost – This tax structure is good for export-oriented businesses as it is not applied for goods/ services that are exported out of India. In addition, Tax burdens will be reduced which is beneficial for both manufacturer and consumer in a long run. Enabling a fairer price, GST has reduced the cost of doing business, bringing more transparency in the day-to-day operations
Logistics & Inventory Cost Will Fall – Logistical efficiency is considered to be one of the key aspects of the new tax regime. Interstate check points are almost abolished by the introduction of new tax system, which will now encourage free flow of goods/services across the country, bringing more transparency, efficiency in trade.
Less Developed States will get a lift – States that are still industrially backward will get a boost and it’s a time for European counterparts to grab the opportunity and make the best out of it.
Manufacturing has become cheaper – Lower logistics and tax cost can benefit a manufacturer tapping the billion plus market with ease. Chance for European manufacturers to dig in and expand in one of the fastest growing economy.
India being the fastest growing economy is not only welcoming European Companies with its newly reformed business policies but also giving an opportunity to invest, expand, and establish in its growing and developing market. With the application of GST European, companies have a chance to do business in India with ease.