With a streamlined and simplified tax filing process, the goods and services tax (GST) system has encouraged the materialisation of many start-up companies and small businesses in India.

If you are a small-scale business owner or just launched a venture, you must be wondering about the GST process and its effect on your business. We’ve got you covered. Keep reading to understand all you need to know about GST registration for small businesses.

Also, if you are looking for funding, you can use a business loan.

Now, let’s get started by first addressing if you are eligible for GST. 

Eligibility for GST registration 

If you own a business belonging to the manufacturing sector and have a turnover exceeding Rs. 40 lakhs, you can apply for a GSTIN. For the service sector, the amount is Rs. 20 lakhs or more. This includes e-commerce as well.

An exception to this limit is the north-eastern states, where the amount is a minimum of Rs. 10 lakhs.

Additional Read: What to Change in Your Business for GST

Importance of GSTIN for your business

1. Single and simple taxation

GST makes the burden of tax less as there are no more separate taxes to be done. All the indirect taxes like VAT, excise, service tax, etcetera, are brought under a single system by eliminating the concept of tax on tax, which means more direct savings for small businesses. 

2. GST Business loan

Being a GSTIN holder earns you the privilege of procuring a collateral-free loan to expand your business, just on the basis of GST returns, among the many other benefits you receive. But before you apply for any loan, assess the financial position of your business. You can use an online business loan EMI calculator to evaluate your potential equated monthly instalments (EMIs).

3. Benefit of the composite scheme

Under the composite scheme, businesses with a turnover of up to Rs. 75 lakhs per year can choose to pay a flat tax ranging from 1%-5%. 

This scheme is only for small scale businesses meeting specific requirements.

4. Affordable interstate transport

Under GST, you don’t have to spend large sums of money to get your goods to the other side of the border. With fewer check posts, small businesses can expand their footprint without having to incur heavy charges on transport. You can invest this saved money and time to focus and develop on other areas of your business. 

Add a loan, and you can effectively scale your business. However, remember to check your business loan eligibility before approaching the lender.

How to register

To register your business under GST, you can simply apply online by visiting www.gst.gov.in. Keep all documents related to your business along with your ID proofs handy.

Additional Read: Growth Opportunities & Impact of GST on Small Businesses

In conclusion

Putting up with the initial pain of going through the GST registration will benefit you all through your business. A GST number will help you secure loans with great ease and value-addition. To get quick business, visit Tata Capital’s website.

We offer attractive business loan interest rates with customisable loan tenure and flexible EMIs. Avail of the benefits and expand your business by applying at Tata Capital today!

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