New Delhi, Oct 23 (KNN) With the Goods and Services tax (GST) entering its fourth month, the Tax rates under the GST need to be revised, Revenue Secretary Hasmukh Adhia said in a recent interview.

He has also mentioned that the compliance burden has already been reduced for the Micro, Smal and Medium Enterprises (MSMEs) by enhancing the limit for Composition scheme to Rs. 1 crore and allowing submission of only quarterly returns by enterprises with turnover upto 1.4 crore.

The statement from the revenue secretary comes after repeated announcement by the Prime Minister that the GST structure  can be reviewed to take care of genuine difficulties of small business.

PM Modi’s announcement was followed by the constitution of a group of Ministers (GoM)  to look into the entire GST structure.

While all these are very welcome steps, they are also too late.

The MSMEs have been raising concern time and again even before the  roll out of the GST for amendments in visible anomalies like inverse GST on synthetic textiles where the tax on the yarn is more than  three times the tax on the fabric.

Similar concerns were raised on the different tax rates on identical products- the most glaring being the differential taxes on ‘Mithais’.

The  so called root cause of all these anomalies was the intention to run the GST juggernaut without consulting the stakeholders, particularly the MSMEs.

MSMEs has one third share in the GDP and provide for 40% of our merchandise export.

So the Government should have discussed the pain points of this sector towards implementation of  GST, with the stakeholders before taking unilateral action.

Now it has been mentioned that the GoM will meet with the representative bodies of MSMEs  before finalising its recommendations.

If this would have been done earlier much loss of business to the MSMEs and revenue to the Government could have been avoided.

Dinesh Singhal, past president of FISME and a  reputed entrepreneur of Meerut commented  that the GST Council  should constitute an empower committee for taking prompt corrective action.

Waiting for even one month  for the GST Council to take decision will be counter productive for industry, added Singhal.

Commenting on the situation, an expert on MSME affairs mentioned that the piece-meal initiatives by the Government to allay the difficulties  MSMEs are facing, are doing more harm than good.

These sort of Knee- jerk reactions only encourage the pressure groups to make the already compromised tax structure further irrational.

For example, the MSMEs supplying to the organised value chains are already lamenting the decision to allow quarterly returns as these will be in skew with the input tax credit chain.

Instead, Government  should come out with an comprehensive GST layout for MSMEs after elaborate discussions with the MSME federations and other stakeholders, commented another MSME entrepreneur. (KNN/DB)