New Delhi, Apr 8 (KNN) Ahead of the Lok Sabha elections, representatives of Micro, Small and Medium Enterprises (MSMEs) across the country have amplified their demands for a reduction in Goods and Services Tax (GST) rates, which they say have crippled several units since the tax regime’s rollout over six years ago.

In the industrial hub of Coimbatore, Tamil Nadu, the Coimbatore District Small Industries Association has sought a cut in GST rates on labour charges or job work undertaken by micro and small engineering units from the current 12 per cent to either 5 per cent or nil.

“The rate was initially 18 per cent and after a lot of representations, it was reduced to 12 per cent. It should be either 5 per cent or nil,” said R. Ramamurthy, former president of the association.

The Federation of Tamil Nadu Powerlooms Associations has highlighted the issue of pending GST refunds amounting to nearly Rs 1,200 crore for around 2,000 units weaving viscose fabric in the western districts of the state.

“Almost 2,000 units in the western districts of Tamil Nadu have to get nearly Rs 1,200 crore refund. Close to 500 units have closed down business because of the pending refund,” said B. Kandavel, the federation's organising secretary.

In Ludhiana, Punjab, a hub for auto component manufacturing, units pay a steep 28 per cent GST on certain components.

“For those supplying to the spares market, the cost goes up as they cannot take input tax credit and they need to compete with units that are not registered with GST,” said Upkar Singh Ahuja, president of the Chamber of Industrial and Commercial Undertakings.

The issue of high GST rates has also affected the agricultural pumpset industry in Rajkot, Gujarat. “The hike in GST for agricultural pumpsets from 12 per cent to 18 per cent has affected the demand for pumpsets as farmers have to pay more for them,” said Jignesh S. Adroja, secretary of the Rajkot Engineering Association

With an estimated 7 crore MSMEs operating across sectors in the country, providing employment to around 12 crore people, industry leaders have urged political parties to prioritise MSME-friendly policies and address GST-related concerns in their election manifestos.

“If these units do well, all those who depend on it will benefit,” said Sudhir Jha, national convenor of the All India Manufacturers Organisation and vice president of the MSME Development Forum, stressing the sector's importance for the nation's economy.

(KNN Bureau)