Puisa Kotha Hunibo? Why should MSMEs care about GST?

Say the word “tax” in a room full of business owners here and you can almost feel the resistance. GST? Filing? Returns? Compliance? Why do I need all these? I understand where that resistance comes from. I have been there myself!

For many of us in Nagaland, income tax was never something we grew up worrying about or planning around. Unlike in most parts of India, many eligible Scheduled Tribe residents in Nagaland have historically benefited from income-tax exemptions available under the Income Tax Act. So naturally, our relationship with taxation is very different.

And personally, I feel that has been both a boon and, in some ways, a bane. Because now, anything with the word “tax” attached to it feels alien, complicated and bloody intimidating. Like you don’t even want to go there.
Until recently, tax returns, deductions and tax planning weren’t things we discussed much.

But our economy is changing. Across Nagaland, more people are starting businesses, selling goods and services, building brands and reaching customers outside the state. The number of MSMEs is growing, and our ambitions for these businesses are growing too. We cannot want our businesses to grow while refusing to understand the systems that come with that growth. So it’s time we stop running from GST and simply ask: what exactly is it?

What is GST?

GST, or Goods and Services Tax, is a tax added to the price of most goods and services we buy. It replaced several earlier indirect taxes such as VAT, service tax and excise duty with one common tax system. For example, suppose you sell a product for Rs. 1,000 and the applicable GST is 18%. Your customer pays Rs. 1,180 (Rs. 1,000 for your product and Rs. 180 as GST). That Rs. 180 is tax you have collected from the customer to be paid to the government. If you have already paid eligible GST while buying goods or services for your business, you may be able to claim credit for it. That is the basic idea.

What is an MSME?

MSME stands for Micro, Small and Medium Enterprises. Think of the businesses we see around us every day, a bakery, a crochet business, a clothing brand, a pickle business, or someone slowly turning a skill into an enterprise. As these businesses grow, understanding GST, accounting, registrations and compliance becomes part of building the business.

Why should an MSME care about GST?

GST can help eligible businesses operate more easily across and beyond state markets, work with larger companies and institutions, government contracts and maintain formal financial records. Where vendors may need to meet specific registration and compliance requirements. There are also simplified compliance options for eligible smaller businesses, including composition schemes, subject to their conditions and limitations.

The Bottom Line:

GST isn’t just another tax to dread. For MSMEs willing to understand it and use it properly, it can become part of building a more organised and scalable business. We cannot expect to continue doing things the old way while wanting entirely new outcomes. Business is changing. It’s time we learn how the system works instead of being afraid of it.

The original published article can be found at : Why should MSMEs care about GST?