When the government officially implements the GST tax, small businesses will be better off for several reasons. This may take some time to become apparent, but the result should be overwhelmingly positive. First and foremost, this tax will take away a lot of the confusion and delays that exist in the current system which currently hinder small businesses.
Without so many individual taxes and varying rates to worry about, businesses can get on with selling goods and make profits. The GST will help open up trade by evening out tax structures, so they are uniform regardless of state, which will make it easy to trade between countries and thus help everyone gain prosperity.
All of these things should encourage more small businesses to open and flourish, which is where KredX comes in.
KredX currently seeks to benefit small businesses by making sure they have some money to tide them over during the usual 60-90 day wait between the provision of a service and payment.
KredX is currently helping small businesses a lot, but there is only so much they can do under the current tax system. When the GST is implemented, it is likely that the 60-90 day delay will be reduced as all the extra time-consuming tasks associated with many different taxes will be gone over time.
This does not mean, however, that KredX won’t have a place in India anymore. What it does mean is that they have to work within the new system to benefit small businesses even further. If it’s true that the GST will reduce the cost of manufactured goods and services, it is likely that there will be more small businesses than ever before and thus more clients for KredX.
While KredX will still be able to offer the services they do now, as it is likely there will still be delays between completing a job and receiving payment, they could also start offering new services.
For example, at the moment KredX is concerned with helping small businesses survive while they wait for payment. But what if KredX also started offering services along the lines of a small loan? Say a company wants to get started on a new project straight away, but they need more money to get started than the current KredX invoice system can give them.
If they were able to borrow more money against their pending payment, they could use that money to get started on a new project and thus could begin work without delay. Then even when they pay off the original sum, they should still end up with more money than they would have had without the loan. If KredX did start charging interest for these loans, they too would benefit.
This is just one of the new opportunities KredX could look into when India officially introduces the GST tax. With more small businesses than ever before, KredX can expand their reach and secure a place in this new market.