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An year after GST, industry associations talk to KNN about impact on MSMEs

Updated: Jul 02, 2018 12:09:00pm
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An year after GST, industries association talk to KNN about impact on MSMEs

New Delhi, July 2 (KNN) It's been an year since Goods & Services Tax (GST) has been implemented in the country. The experts from different sectors have been sharing good and bad experiences under the new regime. KNN India spoke to industry associations from across tge country to get their views on this.

Dinesh Chandra Tripathi, President, Federation of Indian Small and Micro Enterprises (FISME) President: Though the start was imperfect but we all should be proud of what has been achieved. The sheer scale and complexity of its implementation both at political, technical and commercial level was so daunting that for thirty years all talked about it but no one dared to implement. The GST council, Revenue Secretary and his team are well aware of what remains to be done.

But I would be failing in my duty not to mention two issues. In the pre-GST era, a large section of MSMEs opted for the option of exemption scheme. That is up to the turnover of 1.5 crore they were not required to collect and deposit excise/VAT. (The tax on input was also not reimbursed to them).

Now, with threshold having come down to Rs. 20 lacs, most MSMEs have to deposit GST after supplying the goods and raise the invoice. Their payments however continue to be routinely delayed by as many as 3 to 6 months or even more by PSUs and corporate.

Locking up of much larger GST amounts due to higher rates of 18% to 28% compared to 2% and 12% is adding to the misery of further shrinking of vital bloodline of working capital in case of MSMEs particularly the micro and small ones. Over and above, the strict timelines of paying up taxes coupled with threat of excessive penalties are scary fall outs.

What I gather from the ground is the situation is likely to lead to more business failures along with sudden rise in NPAs in MSME sector. We need to be empathic to their pain and find a way to alleviate it.

Secondly, now that the doomsayers have been proved wrong and growth of GST is more or less stabilized, it’s time GST council became a little magnanimous and at least allowed the GST refund on genuine business expanses. Manufacturing is facing tremendous pressure from imports and is actually shrinking. Continuance of Tax cascading would only help imports and kill jobs.

On behalf of millions of MSMEs, I thank GST council and all concerned once again for making GST a reality.

Praveen Khandelwal, General Secretary, Confederation of All India Traders (CAIT): Since, it was altogether a new taxation system and much different from previous tax regimes, there are several challenges in adoption and acceptance of GST.

There are mixed reaction about GST on its completion of one year among trading communities and small business of the country.

However for priorities of next year issues like filing of multi-returns, refunds from department, awareness and education about GST fundamentals and its compliance obligations needs immediate attention of government.

A comprehensive incentive scheme should be given to traders who adopt digital payments for complying tax obligations and use digital payment in their day to day business by allowing rebate in tax.

Also, it is necessary that pending amendments in GST Act should be done as early as possible. Instead of monthly returns, quarterly returns should be prescribed on Form 3B to make return filing simpler.

C.K. Mohan, General Secretary, Tamil Nadu Small and Tiny Industries Association (TANSTIA): Implementation of GST was a big problem. The process of filing GSTR1, GSTR2 AND GSTR3 is complicated. Most of the micro industries have been in trouble since its implementation as the entire process of filing returns is cumbersome.

Sunil Vaish, President, Indian Industries Association (IIA): With time it is being established in the system. Industrialists are following GST though there are some anomalies in the GST network but government is working to update them. Tax rate anomalies will also be addressed soon.GST network is also stable now and with time it’s all weaknesses will be overcome.

Badish Jindal, President, Federation of Punjab Small Industries Association (FOPSIA): It is a confused tax and I would say more complicated one. Government and industries both are confused with GST framework. It is more complicated tax system compared to earlier ones. Government will have to take back this tax for the betterment of economy.

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