Pre-budget meet with Finance Minister, FISME submits memorandum highlighting MSME concerns
New Delhi, Dec 7 (KNN) Representing the Micro, Small and Medium Enterprises (MSMEs) sector, Federation of Indian Micro and Small & Medium Enterprises (FISME) - a national body of MSMEs comprising of over 740 associations, submitted its memorandum of proposals for the consideration in the upcoming budget.
With regard to the direct taxes, FISME urged the government to consider investment allowance on capex without any lower threshold limit.
Highlighting the MSME sector being labour intensive, FISME raised that the government must encourage Increase in internal accruals in MSMEs, which will further enhance their employment capacity through expansion etc.
Citing numbers, FISME informed that less than 3 per cent of the MSMEs are body corporates under Companies Act. Almost the entire MSME sector is composed of Proprietorship and Partnership firms. One of the major reasons of this peculiar phenomenon is absence of Income Tax slabs at lower rates for lower income Companies as is the case for individuals.
The Federation suggested that Income / Corporate Tax for enterprises operating in the much desired (by the government) company format may be levied in slabs as available to individual tax payers.
Pointing suggestions in the indirect taxation, the federation said that leveraging of GSTN to curb theft of Excise/ VAT in supplies made to public service providers/ utilities is important.
In cases where the goods, services or public goods are concerned, it should be mandatory for above buyers to enter their purchase transactions in GSTN irrespective of the fact that they have no use of GST paid by them/claiming refund, while making purchases. Ideally, in maximum number of such cases and wherever possible, the memorandum said.
With the government introducing protective measures for large manufacturers such as safeguard duties and minim import price, the MSME sector is suffering at its cost. For the sake of the growth and competitiveness of the value adding, down the line industries, protective measures for all basic metals and chemicals should be taken judiciously, keeping in view their effects on the entire value chain.
The Federation also called for an immediate elimination of safeguard duties from steel imports and urged the government to constitute consultative machinery including the MSME sector, to capture the concerns of all stakeholders before imposing such protective measures.
With regard to the banking mechanism, FISME highlighted the concerns with the TReDS platform. For a healthy growth of the TReDS platform, availability of more market makers is essential. And to induce more discounting agencies on the platform Government should provide financial support may be re- discounting facilities at repo rate or similar instruments. This will help to get the discounted Bills a fair price in the market, the memorandum read.
The Federation also raised other concerns including project funding for MSMEs in manufacturing sector, promotion of ease of doing business for MSMEs, and reducing labour law burden for MSMEs to a cap of 10 per cent on the side of the enterprise.
FISME President Dinesh Chandra Tripathi presented the memorandum to the finance minister during the ongoing pre-budgetary meeting.