GST Data trail may help SMEs fetch credit, reduce time for credit sanction

New Delhi, May 25 (KNN) The Goods and Services Tax (GST) is set to roll out from July 1^st. The new taxation might help the Small and Medium Enterprises in applying for credit by filing the GST records with the banks and NBFCs.

In a press interview, Rajeev Ahuja, Head of Strategy Retail and Financial inclusion at the RBL bank said that while the SMEs fear the complications that they might incur under the new taxation policy, there is other side to it as well. The GST will help the SMEs in proving their financial health. Since the GST filings will add to the credibility, it will prove to be beneficial both for the SMEs and the lenders.

He further said that at present, before the bank takes a decision to sanction credit, it takes in a lot of groundwork. This tedious procedure takes time because of which the sanction is delayed, whereas the GST data will be packaged authentic information on the financial health of the enterprises, thus enabling smoothness in the procedures.

The Banks will also be able to cut on the costs that it used to incur in verifying and tracing the condition of the SMEs, therefore they see it as a win-win situation for both the stakeholders.

He also said that Also there will be lower risks in lending as the data will be authentic, thus encouraging more credit to the SMEs.

Under the One Nation one Tax policy of the government, the eight million taxpayers are expected to be filing their invoices every month. This data is being seen as the most significant data for flow based lending. (KNN/ DA)