The implementation of GST in a federal country like ours has been a long awaited legislative change. This promises easier trade across state borders and simplified compliance for many businesses that come under the purview of multiple taxes imposed both by the Centre and States.
In the longer term, it would result in reduced costs of operations for businesses making them more competitive. This anticipated simplification and ease of trade is also expected to bring in faster economic growth for the country. With all this being said, the ground level reality is 45% of the country's GDP contribution is from the SMEs and they need to understand how GST will impact their businesses and GST will not succeed if they do not participate and contribute to its success.
GST is still complicated for many businesses. They have heard the big promises that this legislation will bring in, but business implications of those are not being fully understood. One area that we see is very important and can affect businesses is Input Tax Credit. The legislation around this aspect is very important to be understood in the era of GST, especially for SMEs.
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