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India is home to 4200 startups and the third largest startup ecosystem in the world, registering a growth of 40% year-on-year. GST is expected to boost the positive sentiment around the startup industry in India as the government has aligned it with the vision of Startup India. But the Startups which are already in existence are in a dilemma with respect to the transition from the existing taxation schemes.
Other than the major startups which start with proper funding from various investors, Startups are often started by like-minded enthusiasts who have limited knowledge of things beyond their domain. Engineers/Law graduates/ Management graduates establish startups which cater to a certain type of customer base. In the formative stage, they normally lack funds and to mitigate costs one of the partners tries to double up as their accounts expert. They learn things through trial and error method. GST is going to bring about a complete change in the existing scenario, these startups would then be in a catch-22 situation, for they will now have to unlearn things that they had learnt after multiple fails.
When we say transition, we must not blow it out of proportion. The transition is a mere process through which GST will replace the existing taxation systems. But taking professional help is always advisable as the system would not only be new for the startups but also for the government officials. An agency which has qualified professionals may charge a certain amount as its fees but one must understand that paying such fees would save them from coughing up huge fines and related legal proceedings in case they attempt to do it themselves.
GST would prove to be beneficial for startups which adhere to the transition process and adapt to it. The government has made it in consonance with the StartupIndia program and its provisions would assist in the growth of Startups.