GST Impact on North-East IT Traders
GST will convert Northeast India into one unified market and will bring uniformity to the tax structure and transparency. As already mentioned above, this move is crucial to improve ease of doing business in North-east India and address the ambiguities of the current indirect tax landscape, proving beneficial for the economy, at large. It can facilitate seamless movement of goods across inter-state borders enabling better efficiency and spurring growth of the (e-Commerce) sector. With various start ups being initiated in the Northeastern region, the upcoming entrepreneurs will get a boost to their start-ups.
In the present regime, in case of stock transfers, the dealers are required to reverse certain percentage of input tax credit. However, no such reversal would be required under the GST. On the other hand, presently, stock transfers does not attract any tax since these are transferred against Form F. Under GST, however, the person shall pay tax on such transfer on the transaction value.
Some of the salient features of GST are: Registration:
GST Registration threshold is proposed at Rs 4 Lakh for NE states + Sikkim, and Rs 9 Lakh for Rest of India. However, the liability to pay tax will be only after crossing the threshold of Rs 5 Lakh for NE states + Sikkim and Rs 10 Lakhs for Rest of India. Approximately 7-8 million businesses are likely to be registered under GST. Small dealers with turnover below Rs 50 Lakh have the option of adopting the Composition scheme and pay flat ~1 to 4% tax on turnover.
Impact on business investment
The dealers will have to pay full IGST on all interstate transaction at the time of sale and all stock transfers. Hence, traders will require an additional working capital for investment in tax.
Input tax credit
Traders will also get input tax credit (ITC) for taxes paid on input services. To this extent traders will be benefited which they can pass it on to customer and thus, making their goods cheaper. List of non creditable goods will also have major impact on the dealers. Shorter the list higher would be the gain.