The Goods and Services Tax (GST) Council headed by Finance Minister Piyush Goyal will meet today in its 29th meeting to specifically look at the taxation-related issues faced by the country’s Micro, Small and Medium Enterprises (MSMEs) who are encountering certain challenges and have not been able to come to terms with the new GST regime .
Some of the key issues likely to be discussed during the meeting have been summarized below:
The meeting is likely to focus on simplification of policy, streamlining compliance, thereby reducing the burden and any technology-related issues that are impacting the MSME sector.
Further, the Industry is also demanding incentive in the form of refunds for the GST paid through cash, by all entities having turnover up to Rs 2.5 crore. This demand is to somewhat bring at par the incentives that were flowing under the pre-GST regime to small-scale industries wherein exemption from excise duty was granted upto to a turnover of Rs 1.5 crore .
“The request of MSME sector to provide incentive in the form of refunds for GST paid in cash, by dealers with turnover less than 2.5 Crores, is likely to provide working capital boost to the dealers, Also, this may not dent the exchequer by a huge amount as tax collection from dealers under this category would be less than 7% to 8% of the total GST collection” says Harpreet Singh, Partner, Indirect Taxes, KPMG .
Other issues likely to be taken up include:
a. One of the key principles for the introduction of GST was the principle of One Nation, One Tax. Keeping the said principle in hindsight, there is a warranted demand from the MSME sector that a one-time settlement scheme (for assessment and arrears) be introduced to settle the legacy issues/ disputes from the earlier tax regime (VAT, Excise etc). The MSME sector beliefs that this move, if introduced, would go a long way in easing out the litigations and help them to channelize their energy and resource in business operations .
b. State like Andhra Pradesh are demanding a rate cut on several items including tractors and tractor spares, egg trays, movie tickets, utensils, instant convenience food, breakfast cereals among others.
c. From a compliance perspective, there is overall demand to introduce the option to revise the return which will help in reducing the compliance burden
d. There is also a demand to increase the limit of e-waybill from the present Rs. 50,000 to Rs. 100,000 which would be another welcome move that will ease the compliance burden and also will align with the government’s ideology of ease of doing business in India.
e. Since GST is PAN based, only one registration is allowed under a PAN. Thus, small traders who operate using multiple firms which are registered in the name of one person are finding it very challenging to run the business. Thus, they are expecting that GST should allow registration of multiple trade names under one PAN.
“The primary expectation of the MSME sector from the Council meeting is ease of compliance burden be it in form of using lesser E-waybills by increasing the threshold from Rs 50,000 to Rs 100,000, speedy completion of VAT assessments or facility of filing revised returns,” says Singh.
Source : Economic Times