88% MSMEs see drop in cost of goods and services: Deloitte Survey

New Delhi, June 20 (KNN) Since the central government introduced the Goods and Services Tax (GST) in 2017, 88 per cent of MSMEs have seen a reduction in goods and services costs along with optimised supply chains, a Deloitte survey said on Tuesday.

The survey said MSMEs attributed the reduced goods and services costs to improved uniformity in the GST regime.

It collated 612 responses (including large enterprises and MSMEs) from six industries to comprehend India Inc’s views on the integration of GST against the ease of doing business in India, tax technology, investment-centric growth, taxpayer profiling, and recommendations.

Among measures introduced under GST such as increasing the threshold limit for registration under GST from Rs 20 lakh to Rs 40 lakh has been beneficial for MSMEs, according to 74 per cent of MSME respondents in the survey.

Similarly, 73 per cent said relaxation of threshold and reduction of restrictions for availing the composition scheme benefited them while 55 per cent noted invoice financing solutions launched by various providers based on invoices reported under GST to be beneficial.

About 46 per cent also highlighted the offline option provided for raising e-invoices without any cost incurred on technology benefiting MSMEs. 

“India Inc. is very positive towards the changes facilitated by the GST regime and the increasing supply-chain efficiencies. India Inc. continues to look forward to the continued promotion of EoDB reforms, working capital rationalisation, and reductions in input tax restrictions. The 22 per cent YoY growth in GST revenue is testimony to the overall economic development and tax-payer-centric administration. The survey indicates a positive impact on businesses of all sizes with MSMEs being the biggest beneficiary of the simplified tax regime,” said Mahesh Jaising, Partner and Leader, Indirect Tax, Deloitte India. 

More than 70 per cent of MSMEs cited export rule liberalisation under the GST law as the most needed impetus followed by unlocking working capital measures such as cross-distinct person utilisation of CGST credit balances.

Further 50 per cent above MSMEs sought removing restrictions of input tax credits such as in relation to employees and set up of commercial infrastructure along with rationalising GST rates for the entire supply chain.  (KNN Bureau)