The govt exempts small businesses from collecting GST. But the customers do not save 7% on the GST.
Why?
The small business has to pay GST on the goods and services that they buy from other parties. So, their input cost has already increased by the GST component.
They have to pay GST on their rentals and utilities as well.
The prices to their end consumers will have to include the GST cost that they incur.
It may be no different from the prices charged by bigger companies that collect GST.
Confusing? sure it is!
And very costly to administer as well. The cost incurred by small and big businesses to cope with GST collection and accounting also add to the prices that consumers have to pay. GST is a wasteful and costly burden.
Why?
The small business has to pay GST on the goods and services that they buy from other parties. So, their input cost has already increased by the GST component.
They have to pay GST on their rentals and utilities as well.
The prices to their end consumers will have to include the GST cost that they incur.
It may be no different from the prices charged by bigger companies that collect GST.
Confusing? sure it is!
And very costly to administer as well. The cost incurred by small and big businesses to cope with GST collection and accounting also add to the prices that consumers have to pay. GST is a wasteful and costly burden.
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