GST is expected to help micro, small and medium enterprises (SMEs). Since all compliance procedures will now only be online, these enterprises need not worry about interacting with department officers for carrying out these compliances, which was earlier a cumbersome task. Other advantages are an easy process of availing input credit, single point tax, elimination of cascading tax system and simpler taxation, an unified market and lower logistical costs.
Further, they would be able to compete with competition from cheap cost centers such as China, Philippines, and Bangladesh. Toys, low-priced electronics, computer components, crockery, mobile accessories, lightings, stationary, plastic wares, building material like floorings and wallpapers, ceramics are some of the cheap Chinese imports into India.
The GST regime is also expected to usher in lower taxes, seamless input tax credit, logistics savings and market share swings from unorganized to organised players. Among the negative implications of GST for small, medium and micro enterprises are a lower threshold, time limit for return of goods sent on sale or return basis, excess working capital requirement, no tax differentiation for luxury items and services, increase in product cost, tax on stock transfers and deemed supplies, selective tax levying, and higher tax rate for service provider.