GST (Goods and services tax) is being considered as one of the biggest tax reforms in India after independence. The idea of “One nation, one tax” has been welcomed by Businessmen, Governments, Professionals and policy makers. GST will simplify indirect taxes by integrating all major indirect taxes like Excise duty, service tax, VAT, Octroi etc. into one single tax, thus increasing the ease of business in India. The present paper tries to investigate the impact of GST on Indian start-ups. India is the home of the third largest startup ecosystem and the youngest startup nation with more than 4000 startups and 80000 employments in such start-ups.
This paper tries to briefly describe the salient features of GST, its applicability and important provisions like concept of taxable person, taxable point and composition levy scheme and a comparison of existing tax regime with the proposed GST and their impact on manufacturers, Traders, Service providers, Importers and Exporters. Introduction of GST will increase transparency and simplify the existing tax system, hence reducing documentation cost and increasing the ease of business for startups but it will also lead to an increase in effective tax rate for service providing startups and will at least increase inflation in short term. This paper tries to consider all possible advantages and disadvantages of GST on Indian startups. In conclusion we can say that although proposed GST act may not be completely perfect but in spite of all these problems GST is one of the most business friendly reforms in India and in long term the benefits of GST are likely to overcome the problems of GST.