Bangalore, June 27 (KNN) The Karnataka Small Scale Industries Association (KASSIA) has requested the finance commission to make special allocation to Karnataka for the development of micro and small industries.

Keeping in view the tremendous employment potential this segment provides and the need to sustain the sector in the interest of economic growth and development of the State and the Country, KASSIA President Basavaraj S.Javali presented a number of issues to the 15th Finance Commission that are of particular concern to the SMEs in the State.

While giving the presentation to the 15th Finance Commission, KASSIA suggested that the Government may also think of vertical development by setting up multistoried complexes within the city to house micro and small enterprises with all infrastructure facilities. Such things have been done in other countries including China.

It said “China’s example is particularly important to India where tremendous progress has been made in this area under similar circumstances successfully.”

This can only be done with the support of the Government and infusion of funds from the Central Government which the Finance Commission can recommend, KASSIA pointed.

KASSIA supported the statement by saying “Though this will be large one time funding, returns will be very high to the State and the nation and will also encourage manufacture which is the need of the hour for creation of employment and incomes.”

With regard to GST on labour charges, KASSIA informed the commission that labour works were earlier exempted from payment of tax under the VAT. However with the introduction of GST, labour work is taxed at 18%, which is causing a lot of hardship to the micro and small units who are the main players performing the service for larger units.

Therefore, the levy of 18% GST on them which is to be paid within a stipulated time seriously impacts their cash flows and aggravates the working capital problems. As a matter of course, payment for labour work are always delayed and this has rendered a number of units incapable of taking up more jobs for want of working capital, added KASSIA.

It recommended the commission that the issue may be suitably addressed by bringing labour work under 5% GST or completely exempting them from payment of GST.

In addition, KASSIA suggested the commission to remove the e-way bill requirement on labour work and allow payment of GST once in 3 months along with the filing of returns.

“As Bangalore also is the core of the Startup activity in the Country drawing global attention also for the R & D being pursued here by the MNCs and others, we would like to request the Finance Commission to allocate funds especially for the development of these industrial segments”, said KASSIA.

Besides this, KASSIA urged the commission to upgrade the rail link between Bangalore to Mumbai with introduction of high speed trains and doubling wherever required or laying new lines.

It said “Adequate funds may be sanctioned for improving the above rail line between the two important metropolises.”

There is need to establish a new line parallel to the High Way (NH-4) so that the two important cities i.e Hubli and Belguam in North Karnataka receive the necessary transport infrastructure  support which will  help in the development of these Cities. Hence, necessary funds may be available for this as it requires substantial funds for establishment, requested KASSIA.

On the abovementioned issues and suggestions, KASSIA is hopeful that the some of the issues raised in the representation presented by them would be considered by the Finance Commission while allocating funds to the State.