Small scale industries are emerging at a rapid pace .These also have a major role in the economic development of any country. In Indian context, small scale industries account for the employment generation to about 30% of population. These small scale and cottage industries receive government subsidies & tax benefits so that the rural & semi urban population is duly employed and in a position to self serve.
Problems Faced By Small Scale Industries
For a small sized entrepreneur, there are a lots of obstacles that are required to be tackled, gradually to move one step forward each time. Below are some of the common problems that are obvious for a small scale enterprises:
Which Type of Taxes Are Imposed Upon Small Scale Industries
Every country has its own taxation norms. Taxes broadly are categorized as Direct Taxes and Indirect Taxes. Direct tax is directly imposed upon earning. Be it an individual or an organization. Examples include Income tax, and corporate tax. Whereas the Indirect taxes are imposed upon the customers while purchasing commodities. Examples include VAT (Value Added Tax), GST (Goods and Service Tax), etc. Below are some of the common taxation norms that a small and medium entrepreneur faces initially.
Because of limited capital flow, most of the small scale industries function in the informal economy which is not a positive aspect for the economic development. Also, apart of the central taxes, certain local body taxes may also be levied there that get sometimes problematic. The small enterprises shall try to take the benefits of the privileges offered to them and reduce the taxation risks so as to keep work process smooth.