New Delhi, Oct 10 (KNN) The Goods and Services Tax (GST) has taken its toll on the Micro, Small and Medium Enterprises (MSME) in Tamil Nadu. Most of the companies are facing loss of working capital due to high rates of GST. Many companies in the sector have halted their operations, MSME body Tamil Nadu Small and Tiny Industries Association said.

C.K. MOHAN, General Secretary – Tamil Nadu Small and Tiny Industries Association told KNN that In Chennai, MSME sector mainly comprises of engineering and automobile units which are facing high GST rates between 18%-28%. This high tax leave the companies with very less working capital to expand the business or pay the salaries. This was not the case earlier during the VAT regime.

He also said that though credit is available readily but there are hardly any credit seekers and input tax credit has not been given to the firms which holds the danger of further lay-offs and closure of Small,medium businesses.

He suggested that government  should reduce the tax slab on engineering  and automobiles firms  as these companies  are the backbone of the MSME sector  in the region , also the GST penalty  is way too high which needs to be reduced. (KNN/AG)