Karnataka small units face commercial tax payment problems
Updated: Feb 13, 2014 03:54:33pm
Bengaluru, Feb 13 (KNN) Karnataka Small Scale Industries Association (KASSIA) has drawn attention to a number of challenges faced by small industries in the state including the blocking of e-Sugam which has adversely affected small industries.
Speaking at a press conference on February-11, KASSIA President, B P Shashidhar categorically stated that the procedure of the Commercial Taxes Department to withhold access to e-Sugam for late submission of invoices has posed serious problems to small units in the state.
“What was considered to be a convenient technology for tax management, e-Sugam along with several other technologies were introduced by the Commercial Tax Department. In practice the imposition of technology particularly e-Sugam and the arbitrariness with which the authorities could block e-Sugam has landed numerous small industries in utter difficulties creating unsurmountable problems for their very survival,” Shashidhar said in a press release.
e-Sugam was introduced by the Commercial Taxes Department in an effort to increase the efficiency of commercial tax check-posts. e-Sugam (Simple Uploading of Goods Arrival and Movements) has simplified the payment of commercial tax on goods.
Earlier, when goods were transported, they would leave a huge paper trail that needed to be verified at commercial tax check-posts leading to delays, harassment and allegations of corruption. With the introduction of e-Sugam about five years ago, there has been no paper trail with the seller uploading the details of goods sold on to the department's website after which a unique e-Sugam number is issued.
Appealing for some measure of leniency, “e-Sugam should not be stalled without notice to the entrepreneurs. Further in the event of stopping e-Sugam with advance intimation the penalty should be made very nominal and no penalty in the event of the entrepreneur not being at fault,” Shashidhar said.
The cost escalation of KIADB land was also raised. “Quite a number of small industries are in distress on receiving notices from KIADB, demanding payment at enhanced land cost due to cost escalation. In most of the cases the increase is disproportionately high upsetting the financial equilibrium of the entrepreneurs. In a realistic sense while marginal increase of cost arising out of uncertainties is understandable, when the escalation goes beyond the project means, the entrepreneur’s stand needs to be respected.”
Further, it said that KIADB should not be given on lease without consultations with the industry.
“It is our strong belief that the MSME sector should be treated on a different footing, giving exemption upto 5 acres to this sector in status-quo mode of lease-cum-sale pattern to maintain their security and safety aspects.”
On the matter of trade license that is now extended to industrial units, the SMEs feel is an anomaly. They do not think the charging of license fee on the basis of power is a rational formula.
“For an industry which is already under the jurisdiction of multiple acts such as MSMED, Factories Act, Shops and Establishment Act, ESI and PF Act which are of statutory nature it is an added burden to the small entrepreneur. Therefore it is our earnest request that the requirement of trade license to industrial segment may be dispensed with,” the release stated. (KNN/ES)
Speaking at a press conference on February-11, KASSIA President, B P Shashidhar categorically stated that the procedure of the Commercial Taxes Department to withhold access to e-Sugam for late submission of invoices has posed serious problems to small units in the state.
“What was considered to be a convenient technology for tax management, e-Sugam along with several other technologies were introduced by the Commercial Tax Department. In practice the imposition of technology particularly e-Sugam and the arbitrariness with which the authorities could block e-Sugam has landed numerous small industries in utter difficulties creating unsurmountable problems for their very survival,” Shashidhar said in a press release.
e-Sugam was introduced by the Commercial Taxes Department in an effort to increase the efficiency of commercial tax check-posts. e-Sugam (Simple Uploading of Goods Arrival and Movements) has simplified the payment of commercial tax on goods.
Earlier, when goods were transported, they would leave a huge paper trail that needed to be verified at commercial tax check-posts leading to delays, harassment and allegations of corruption. With the introduction of e-Sugam about five years ago, there has been no paper trail with the seller uploading the details of goods sold on to the department's website after which a unique e-Sugam number is issued.
Appealing for some measure of leniency, “e-Sugam should not be stalled without notice to the entrepreneurs. Further in the event of stopping e-Sugam with advance intimation the penalty should be made very nominal and no penalty in the event of the entrepreneur not being at fault,” Shashidhar said.
The cost escalation of KIADB land was also raised. “Quite a number of small industries are in distress on receiving notices from KIADB, demanding payment at enhanced land cost due to cost escalation. In most of the cases the increase is disproportionately high upsetting the financial equilibrium of the entrepreneurs. In a realistic sense while marginal increase of cost arising out of uncertainties is understandable, when the escalation goes beyond the project means, the entrepreneur’s stand needs to be respected.”
Further, it said that KIADB should not be given on lease without consultations with the industry.
“It is our strong belief that the MSME sector should be treated on a different footing, giving exemption upto 5 acres to this sector in status-quo mode of lease-cum-sale pattern to maintain their security and safety aspects.”
On the matter of trade license that is now extended to industrial units, the SMEs feel is an anomaly. They do not think the charging of license fee on the basis of power is a rational formula.
“For an industry which is already under the jurisdiction of multiple acts such as MSMED, Factories Act, Shops and Establishment Act, ESI and PF Act which are of statutory nature it is an added burden to the small entrepreneur. Therefore it is our earnest request that the requirement of trade license to industrial segment may be dispensed with,” the release stated. (KNN/ES)
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