In the GST Council meeting, the Council announced series of changes in an attempt to provide relief to traders, SMEs and small businesses. These include reduction in GST rates on 27 items, creation of e-wallets for refunds for exporters and quarterly return filing for SMEs with annual turnover of Rs. 1.5 cr. While these measures are aimed at providing relief in compliance to small businesses, lot more need to be achieved including fixing the GSTN technical issues as well as helping small businesses coping with the issues of blocking of working capital.
Mr. Vijay Kalantri, President, All India Association of Industries (AIAI) said, “After 100 days of GST roll-out, these partial relief measures are welcome. However these are not sufficient. Last 1 year has been particularly challenging for MSMEs struggling with after-effects of demonetization to blocking of working capital due to GST. The government must look forward to reducing GST tax slabs to only 2 from the current 4 and should push to bring petroleum products under GST. The RBI did not provide any relief to businesses with status quo. In such a situation proving impetus to economy with proactive measures should be the priority of government.”
The GST Council has put stress on providing measures to small businesses by reducing number of tax returns and providing relief to merchant exporters while allowing them to pay 0.1% nominal GST for procuring goods from domestic suppliers for exports. Mr. Kalantri further added, “At a time when exporters were down by nearly 20%, this announcement will bring back partial confidence. The concept of e-wallet is innovative and is a right move in digital direction.”
At the time when our economy is struggling with poor employment growth, AIAI suggests a three pronged approach. The Government must raise the GST enrollment limit from current Rs. 20 lacs to Rs. 50 lacs, the quarterly returns filing limit should have been extended to Rs. 2 cr from Rs. 1.5 cr and the threshold level of composition scheme should be enhanced to Rs. 1 cr.