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Nirmala Sitharaman promises further GST simplification to help India improve business ranking

Nirmala Sitharaman promises further GST simplification to help India improve business ranking

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Finance minister Nirmala Sitharaman on Thursday said efforts will be made to further simplify goods and services tax (GST), and expressed hope that it will help in further improving India’s ranking in the World Bank’s ease of doing business index.

India has jumped 14 places to rank 63rd out of 190 countries in the World Bank’s ease of doing business 2020 report on account of significant improvement in resolving insolvency and obtaining construction permits.

The other parameters where the country has done well include trading across borders, registering property, paying taxes, getting electricity connections and starting a business.

However, the improvement in the remaining three parameters — getting credit, protecting minority investors, enforcing contracts — are not impressive.

Sitharaman said that the effort will be now to achieve the target to reaching within top 50 rank.

She added that as there is just one rank improvement in the parameter of starting a business, enough effort will be made to improve on this scale, as it is a “very critical” in a cycle of an industry.

“In GST, it is an ongoing process to understand where the difficulties are…We are also looking at what were the glitches in using online filing of returns. So, GST is an ongoing process in improving. Even now for the next meeting, as and when it happens, we want to make sure that several steps are taken to simplify compliance,” she said.

On income tax front, she said: “At this stage, there may not be much to say.”

The minister also said from next year two more cities – Kolkata and Bengaluru – will be included in the preparation of the ranking index. Currently, the report covers Delhi and Mumbai.

“Till now two cities in India were covered all these years. For a large country and regional diversity being so distinct, we were impressing upon the World Bank that having just two cities may not be adequately representative. So, from the coming year Kolkata and Bengaluru will be added to the list of cities,” she told reporters here.

With this, the World Bank will take views of industry from these two cities while formulating the ranking index.

The minister said that there is a significant jump in the parameter of resolving insolvency, “but that does not make me complacent”.

“We have to go within top 50th. So, all efforts from now will be moving in that direction,” she said.

She added that on obtaining electricity connection parameter, work has to be done at state level.

“In trading across borders and registering property, improvement can be even much more,” the minister said.

Speaking on the parameter of getting credit, chief economic adviser Krishnamurthy Subramanian said the current outreach programme being undertaken by the banks has helped in improving credit access.

“Close to Rs 80,000 crore credit has been given, of which 43 per cent is new term loans. One lakh MSMEs have been sanctioned loans close to Rs 8,500 crore, three lakh loans to agri, which is close to about Rs 4,600 crore,” Subramanian said.

India has continuously improved its ranking from 142 in 2014 to 63rd this year – out of 190 countries, which are ranked by the bank’s ‘Doing Business’ 2020 report.

Source: Times-Of-India.

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MSMEs seek simpler GST return system

MSMEs seek simpler GST return system

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Micro and small entrepreneurs (MSMEs), who function from the Sidco industrial estate near the city, MSMEs seek simpler GST return systemhave sought that the Central government make the mechanism forreceiving returns for GST simple. Currently, they have to fill about three forms and the process is cumbersome, they said.

Members of the Coimbatore Sidco Industrial Estate Manufacturers Association (Cosima) on Thursday said this in a release, along with other resolutions of the annual general meeting held recently.

S Surulivel, president of Cosima, told TOI that instead of filling multiple forms, if they were asked to fill only form GSTR–3B, it would be easier for them.Also, GST payments should be made quarterly for MSMEs.

The association also sought that the electricity tax and fuel be brought under GST.


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Source :  The Times of India
29th GST Council Meeting Highlights and Key Recommendations

29th GST Council Meeting Highlights and Key Recommendations

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29th Meeting of GST Council has been conducted at New Delhi (dt. 4 August 2018) 29th GST Council Meeting Highlightsat a very short interval, especially to deliberate and discuss upon the issues relating to Simplification and Rationalization of GST Laws from the perspective of MSMEs and Small Taxpayers.

Updates are coming from News Reports that the 29th GST Council Meeting has concluded with key recommendations/ decisions about incentivising digital payments thru Bhima App, RuPay Card, etc. and to constitute a new panel/ sub-committee for reviewing issues of MSMEs and Small traders relating to GST law/ rates/ refunds.

Below are the Key Highlights of 29th GST Council Meeting:
i) 20% of GST as Cash Back on Digital Transactions: To promote digital transaction, increase compliance and collection in taxes, GST Council has recommended cash back of 20% of GST paid via Bhima App, RuPay Debit and UPI-based transaction, capped at Rs 100. The GST Council has recommended developing such software and any State willing to do so can implement the same on a pilot basis.

ii) Sub-committee/ Panel for MSME Issues: To address the issues of MSMEs and Small Taxpayers, the GST Council has decided to constitute a new Panel/ Sub-Committee to review the concerns of stakeholders on various law-related and GST rates related issues, including issues relating to refunds, followed with the submission of a report thereon.

Also Read: 28th Council Meeting- Key Highlights & Rate Changes

Total 157 issues were submitted before the Council. While addressing the media after the meeting, the Finance Minister Piyush Goyal said that several issues related to small businessmen and retailers were discussed in the meeting.

Small biz yet to recover from demonetisation, GST: Report

Small biz yet to recover from demonetisation, GST: Report

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Even as the economy has largely recovered from the shocks of demonetisation GSTand GST implementation, micro enterprises with borrowings of under Rs 10 lakh are yet to fully recover, a report said today.

“Micro, small and medium enterprises (MSMEs) with exposures from Rs 10 lakh to Rs 10 crore have recovered to pre-demonetisation levels, (but) the segment with exposure of less than Rs 10 lakh has still not recovered to that extent,” the report by Transunion Cibil and Sidbi said.

It can be noted that the uptick in growth, wherein the GDP expansion accelerated to a 7.2 per cent, had led many watchers to say that the worries of the twin reform measures are behind the economy.

The report reiterated that the situation has improved in all segments except those with borrowings less than Rs 50 lakh, where the systemic exposure has not caught up with pre-demonetisation levels.

Further, the overall exposure of the formal financial system to the MSME sector was at Rs 11.75 lakh crore of the total credit outstanding of almost Rs 100 lakh crore. Only 5 million of the the over 50 million MSMEs have accessed formal finance system for credit.

The note ban and GST, have however, upped the formalisation of the economy which is seen in an increase in new to credit MSMEs at 4 lakh units in the second half of 2017, as against over 2.7 lakh in the year-ago period.

On the critical factor of non-performing assets, the report said impaired assets in MSMEs have been “range bound”, but the proportion of stress increases with the quantum of exposure, which means NPAs among smaller enterprises are lower as compared to the bigger ones.

The micro enterprises having borrowings of less than Rs 1 crore had an NPA of 8.8 per cent in December 2017 versus 9.2 per cent in the year-ago period.

Also read: GST E-Way Bill – key pointers that you need to know

The report said while there has been a 20 per cent jump in exposure to the under Rs 1 crore borrower segment for the year till December 2017 as against an overall 3.2 per cent for the MSME segment as a whole, the exposure to firms borrowing under Rs 10 lakh has been a faster 31 per cent.

“There is a structural opportunity in the MSME segment, which is both profitable as well as impactful,” Sidbis chairman and managing Mohammed Mustafa told reporters.

While senior officials from the credit information admitted that some of the growth is due to mandatory requirements like priority sector lending, they also pointed out to a larger play by the private sector lenders who are expanding their market share.

Cibils managing director and chief executive said the smaller businesses represent a similar opportunity as the one held by retail lending over a decade ago and are bound to grow.

The state-run development finance institution and the leading credit information company have tied up to launch such reports on the sector on a quarterly basis to understand the progress and suggest policy interventions.

Mustafa said the report points out to lower coverage in states like Uttar Pradesh and Bihar, and added that such enterprises need to be brought under the formal financial system fold.

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Source :  Money Control
GST council to hold consultations with MSME associations

GST council to hold consultations with MSME associations

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MSME GST

In a bid to facilitate relief to the Micro, Small and Medium Enterprises (MSMEs) in the country with regard to the complications under the Goods and Services Tax, the GST council along with the Group of Ministers (GoM) will be holding talks with select MSME associations.

The focus group meeting between the tax authorities and the industry is scheduled for 29th of October.

Different associations including the Federation of Indian Micro, and Small & Medium Enterprises (MSMEs) will be participating in the meeting.

Also Read: GST panel to meet MSME representatives in October end to ease tax rigour

The main agenda of the meeting is to explore the various complications that the sector is facing under the One Nation One Tax regime of the government with four months into the roll out.

The GST Council, chaired by finance minister Arun Jaitley along with the Group of Ministers (GoM) including Bihar deputy chief minister Sushil Modi, Jammu and Kashmir finance minister Haseeb Drabu, Punjab finance minister Manpreet Singh Badal and Chhattisgarh minister of commercial taxes Amar Agrawal would be present for the meeting.

The call from the government comes in the aftermath of the concerns raised by the sector.

Earlier Revenue Secretary Hasmukh Adhia echoed similar concerns saying that there is need for a wave of reforms for the MSMEs under goods and service tax.

Also Read: More relief for SMEs as GST Council set to reduce late filing penalties

Industry body Indian Industries Association (IIA) earlier told KNN that among other problems the refund have been a major issue for the MSMEs leading to capital blockage causing a great deal of distress in the sector.

Also other stakeholders have raised similar problems and written time and again to the GST council ringing the bells.


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Source :  KNNIndia
GST panel to meet MSME representatives in October end to ease tax rigour

GST panel to meet MSME representatives in October end to ease tax rigour

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MSME GST

A five-member ministerial panel set up by the federal indirect tax body, the goods and services tax Council, will meet representatives of micro, small and medium enterprises (MSME) at its second meeting on 29 October to seek views on how to make compliance in the GST regime easier for them.

The panel tasked with suggesting ways of making the quarterly tax payment scheme for small businesses more attractive wants to consult SMEs to make its recommendations as broad-based as possible before they are placed before the Council to take a decision at its meeting on 9 November.

Read: GST composition scheme: GoM consensus on providing relief to small restaurants

The GST Council had at its last meeting on 6 October allowed firms with up to Rs1 crore annual sales to sign up for the quarterly payment scheme, up from the earlier Rs75 lakh and exempted inter-state service providers with sales up to Rs20 lakh from the need for GST registration. A similar relaxation is under consideration for the inter-state sale of goods without registration if turnover is below Rs20 lakh.

“The issues small traders were facing in the GST regime have been taken care of by the relaxations already announced at the last Council meeting. A lot of MSMEs with sales up to Rs1.5 crore, who, in the earlier regime had enjoyed excise duty exemption, have come under GST because of the Rs20 lakh sales threshold for GST registration. We want to consult small manufacturers on the issues they face in the new tax regime,” a person privy to the discussions in the panel said, on the condition of anonymity. The panel, which also looks into the taxation of restaurants, met on Sunday.

Read: Centre working on mechanism to speed up GST refund for exporters

The Council is taking extra care to resolve all the difficulties faced by the MSME sector because of its significant contribution to the economy and employment. According to data published by the ministry of MSMEs in 2011, the sector accounts for 33% of India’s manufacturing output and 36 million such enterprises employed more than 80 million people. Their contribution to the economy is believed to have gone up since.

The ministerial panel members are Assam finance minister Himanta Biswa Sarma, Bihar deputy chief minister Sushil Kumar Modi, Jammu and Kashmir finance minister Haseeb Drabu, Punjab finance minister Manpreet Singh Badal and Chhattisgarh commercial taxes minister Amar Agrawal.


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Source :  Livemint
Could the Government’s initiatives make GST a simple affair?

Could the Government’s initiatives make GST a simple affair?

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Make GST Simple

It’s been barely three months since the introduction of the Goods and Services Tax (GST), the good and simple tax law has been further simplified. The Hon’ble Prime Minister Narendra Modi also stated that the decisions taken by the GST Council in its twenty-second meeting have evoked the mood of Diwali festival for taxpayers.

The government was flooded with several representations primarily from the exporters as well as Small and Medium Enterprises (SME) on the varied challenges faced by them in the first quarter of GST implementation. The trader community especially merchant traders/exporters were facing serious concerns on account of blockage of working capital and delayed refund of the taxes paid on export of goods or services. The taxpayers were finding it difficult to undertake compliances correctly due to system issues and they were puzzled by the complications in the return filing process, reverse charge on procurement from registered suppliers, etc.

Taking a note of the increasing dissent in the exporter and trading community, the GST Council has taken several decisions which are expected to benefit the exporters and SMEs and is intended to ease the compliance burden. Some of the key decisions taken by the GST Council especially for exporters include the extension of the upfront exemption from IGST on procurements available under various schemes such as advance authorisation, Export Promotion Capital Goods Scheme and 100% Export Oriented Units (EOUs). The exemption will apply to the procurement of goods whether imported or sourced indigenously. However, the said benefit is not extended to the procurement of services. As the contribution of services sector increases in the economy, the exporters would have rejoiced had the scheme extended to cover the procurement of services as well. Further, in the absence of any specific notification, it is not clear whether the service export units (such as Software Technology Parks of India /Service EOU) can avail the said exemption.

Another attempt made to alleviate the burden of working capital for merchant exporter was to reduce the GST rate on the procurements made by such exporters to a marginal rate of 0.1%. The GST Council has also announced that the refunds of the IGST paid on exports in the month of July 2017 will be paid/cleared from 10 October 2017 and that for the month of August 2017 will be cleared from 18 October 2017. The authorities also issued a Circular on 9 October 2017 clarifying the procedural aspects for grant of refund to exporters. Trade and industry will celebrate the festival of lights if the burden of working capital is made lighter by actual grant of refund within the timelines announced.

Also Read: GST composition scheme: GoM consensus on providing relief to small restaurants

Further, the decision to defer the compliance under the reverse charge mechanism applicable for procurements from unregistered suppliers till 31 March 2018 is a welcome relief. However, the trade expects that such reverse charge mechanism should be withdrawn completely and not deferred only for a few months.

Contrary to the industry demand for the abolition of the e-way bill system, the GST Council has decided to implement the same in a staggered manner from 1 January 2018 and on an all India basis from till 31 March 2018. The industry believes that given the stringent control and penal provisions for issuance of invoice/delivery challan for every movement of goods, the requirement for e-way bills could unnecessarily lead to additional compliance burden and not contribute to the ease of doing business in India.

Small enterprises can rejoice as the limit for composition scheme has been enhanced to INR1 crore in a move to provide relief to a large base of small taxpayers. Also, the SME sector has been granted the facility to furnish tax returns and tax payments on a quarterly basis instead of a monthly return/payment. However, all the taxpayers will have to file the monthly returns for the first quarter and the benefit of quarterly returns can be availed only from the quarter of October-December 2017. Thus, all taxpayers will have to experience the online matching concept and monthly return for the first quarter ending in September 2017.

Read: Are businesses really facing problems or is it just another political stunt with GST?

Unlike the erstwhile regime, the time of supply of goods also includes the receipt of advance and this has affected small dealers and manufacturers as they had to prepay the GST. Therefore, the GST Council has granted a waiver from payment of GST on receipt of advances. Now, small dealers and manufacturers having an annual aggregate turnover upto INR1.5 crore shall be liable to pay GST only on actual supplies of goods and not on advances received. This can also help eliminate the issue of non-availability of input tax credit albeit only for a small section of the taxpayers. Even the Tax Deducted at Source (TDS) and the Tax Collected at source (TCS) provisions are deferred till 31 March 2018.

Besides the above key measures, the GST Council has also rationalised the applicable GST rates for many products in line with the industry representation. The noteworthy items primarily include food items, unbranded ayurvedic/homoeopathy medicines, man-made and synthetic/artificial filament yarn, e-waste, etc.

Another crucial matter for the manufacturing sector is the uncertainty on the quantum of area-based incentives including incentives offered by states under the state industrial policy. Though recently a notification to the effect was issued in the public domain by the central government, the stand of state governments is not clear.

Read: Tracking the GST that you pay is now at your fingertips!

While some relaxations announced by the GST Council are a step in the right direction, however, the job is not yet done. These measures are primarily aimed at the SME sector and all other taxpayers who have an annual turnover of more than INR1.5 crore will still be required to comply with stringent compliance under GST. Besides this, there are several other challenges which the industry is facing especially with regard to a stabilisation of GSTN/technical glitches and it is expected that the GST Council will accord due importance to these issues to help ensure that the real intended benefit of GST is enjoyed equally by the trade and the consumer. These steps in a continuous dialogue between the government and trade can really make GST, in a true sense, a Good and Simple Tax.


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Source: Forbes India
GST Council meet today, MSMEs, exporters may get relief package

GST Council meet today, MSMEs, exporters may get relief package

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arun-jaitley-gst-council

The Goods and Services Tax Council (GST Council) chaired by finance minister Arun Jaitley is likely to announce on Friday a special package for micro, small and medium enterprises (MSMEs) that will, among other things, address the concerns of exporters, as policymakers explore ways to fix an unexpected slowdown in economic growth.

The package will also ease the onerous tax compliance requirements faced by these entities, a person familiar with the contents of the package said on condition of anonymity.

Also read: 100 days of GST: From launch to scope of reducing slabs, journey of the tax reform so far

The package comes a day after Prime Minister Narendra Modi, while defending his government’s track record in managing the economy, said both demonetisation and the implementation of GST were structural reforms but that if “any sector needs temporary assistance” on account of these, “the government would” provide it. He specifically referred to exporters and small and medium enterprises.

Modi’s comments on Wednesday came at a time when the narrative about the economy has turned negative, triggered by the economy’s slowest ever expansion in three years during the quarter ended 30 June, and fanned by criticism of his government by former finance minister Yashwant Sinha and former disinvestment minister Arun Shourie.

There has been speculation about a relief package. On Wednesday, Bharatiya Janata Party president Amit Shah cut short a visit to Kerala to return to New Delhi. On Thursday evening, Shah and finance minister Arun Jaitley are believed to have met with Modi to discuss the economic situation. No details of that meeting or the package are available.

The package being considered by the GST Council, according to the person cited in the first instance, seems sharply focused on exporters and MSMEs.

The key elements include the option for quarterly filing of returns for small businesses, the suspension of the ‘reverse charge’ tax compliance mechanism for MSMEs till March, refund of taxes to exporters through an e-wallet and exemption from any retrospective enquiry into the previous value-added tax (VAT) regime tax matters, this person added.

Reverse charge refers to the requirement of large businesses sourcing supplies from MSMEs to deduct taxes from them and pay to the government. Normally, it is the supplier’s obligation to collect taxes from the buyer and pay the government.

Also read: GST Council may reduce tax on labour component in government projects

Since large companies do not want additional compliance requirements for sourcing from MSMEs, these small entities stand to lose their business. MSMEs requested the government to suspend this requirement for some time. They also sought the option for quarterly filing instead of the present monthly filing norm.

India’s 36 million MSMEs account for a third of manufacturing output of the country. According to government data, MSMEs employ more than 80 million people. The government also wants to support exports, which reported a 10.29% jump in August to $23.8 billion from a year ago. The package for exporters is based on suggestions by the panel led by revenue secretary Hasmukh Adhia, another government official said on condition of anonymity.

On Wednesday, the finance ministry allowed small exporters—those with revenue less than Rs1 crore—to import goods without having to pay integrated GST (IGST) by furnishing just a letter of undertaking. Earlier, small exporters had to furnish a bond to avail of this facility. IGST is applicable on interstate trade and on imports of raw materials that exporters use. Currently, this facility is available only to large exporters.

“This will bring relief to small exporters (having an export turnover of less than Rs1 crore) who were earlier required to submit a bond along with bank guarantee, which was resulting in procedural hassles and cash flow issues,” said Abhishek Jain, partner at consulting firm EY.

The Federation of Indian Export Organisations had sought GST refund for exporters based on GSTR-1 (the return relating to supplies) and GSTR-3B (a summary of transactions).

Central and state government officials met in New Delhi on Thursday to consider proposals to be placed before the GST Council on Friday. The council will also review the implementation of GST, which has come under criticism.


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Source :  Hindustan Times
How will GST impact MSMEs?

How will GST impact MSMEs?

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A simplified tax structure and unified market will improve operational efficiencies, especially of MSMEs with a wider reach

MSMEs

The increasing formalisation of the Indian economy, especially through digitisation, is an inexorable advance that will upend the business model — based on the twin arbitrage of labour and cash transactions — of micro, small and medium enterprises (MSMEs).

India’s paradigm shift to the Goods and Services Tax (GST) regime in July will increase their compliance costs and snare a majority of them into the indirect tax net for the first time.

Sharp practices

So far, unorganised MSMEs have grown faster than organised peers because of lower cost structures stemming from tax avoidance, and not having to pay social security benefits to employees (such as provident fund and gratuity), and excise duty (if turnover is less than ₹1.5 crore).

Some MSMEs also understate employee base or set up multiple ventures to avoid breaching tax thresholds. Such sharp practices helped them price products and services competitively over the past few decades and also maintain operating margins at organised player levels.

The vicissitudes resulting from the impact of GST are many. To wit, for manufacturers, the reduction in the threshold for GST exemption to ₹20 lakh from ₹1.5 crore means tens of thousands of unorganised MSMEs will soon be cast into the tax net.

And digital transaction trails created by dual authentication of invoices under GST will strengthen tax compliance. Additionally, a lower tax burden under GST will reduce the cost of raw materials and logistics.

For example, a study by Crisil shows that freight costs could decline 1.5-2 per cent once GST kicks in.

Different for services

For the services sector, though, the tax burden will increase. Hence, organised players with the ability to hold their price-lines, or pass on any increase in cost to customers, will be able to maintain or improve profit margins.

We believe a simplified tax structure and a unified market will improve operational efficiencies, especially of MSMEs with a wider reach.

Then again, there was demonetisation. Last fiscal, MSMEs were expected to record on-year topline growth of 14 to 16 per cent.

However, the impact of demonetisation has been severe in the second half and they would have closed the year with an increase of just 6 to 8 per cent.

But as the effects of demonetisation fade, growth will pick up in the current fiscal.

Given all this, what are Crisil SME Ratings’ outlook on key sectors after GST is promulgated?

A peep into outlook

Positive for light engineering: Light engineering MSMEs rated by Crisil saw 15 per cent compound annual growth rate in topline between fiscals 2014 and 2016, with demonetisation causing just a blip.

GST is expected to provide a boost to this segment because of lower tax incidence.

The Government’s thrust on ‘Make in India’ will also lead to continued investments, helping the sector maintain growth momentum.

Positive for electrical equipment: Sales in companies rated by Crisil grew way faster at about 23 per cent in fiscal 2016 compared with 16 per cent in 2015. The sector will benefit from lower freight costs and tax rates.

Though growth is expected to be strong this fiscal, cheaper imports, especially from China, remain a challenge.

Neutral for pharmaceuticals: Sales in companies rated by Crisil grew 11 per cent in fiscal 2016 compared with 15 per cent in 2015.

Demonetisation had a limited impact as the Government had allowed extended use of the banned ₹500 and ₹1,000 currency notes for purchasing medicines.

We do not foresee any significant difference in tax rates under GST. This fiscal, too, we expect similar growth.

Neutral for auto components: Between fiscals 2014 and 2016, sales by unorganised auto component makers rated by Crisil grew at 14 per cent annually compared with 7 per cent for their organised peers.

However, demonetisation led to a short-term drop in sales to original equipment manufacturers (OEMs), or vehicle makers.

This fiscal, OEM sales are expected to normalise. Organised players will benefit and record moderate growth given the thrust on digitisation and lower tax rates under GST.

Unorganised players catering mostly to the non-OEM replacement market will be forced to move into the organised domain.

Marginally negative for textiles: Sales growth in the textiles-related MSME segment had already declined from 15 per cent in fiscal 2015 to 8 per cent in 2016.

GST will have a marginally negative impact because of higher tax rates expected.

During Crisil’s interactions with clients, some of them raised concerns that a unified market would create more competition in an already crowded and price-sensitive arena with a large number of unorganised players.

Organised players dealing in branded apparel are expected to fare well, though.

The sector is expected to record below-par growth of 5 per cent or lower.

Marginally negative for leather and footwear sectors: Companies Crisil rates in this segment have seen muted growth and have borne the brunt of demonetisation. With competition, including from Chinese players being strong, the operating margin has fallen to as low as 6 per cent for organised players.

We do not expect GST rates to vary much from the current indirect tax rates. Crisil expects overall growth and margins of players to remain subdued this fiscal.

Article writer : R Vasudevan business head of CRISIL Ratings-SME
CAIT seeks exemption for MSMEs from input credit under GST

CAIT seeks exemption for MSMEs from input credit under GST

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CAIT

The Confederation of All-India Traders (CAIT) today raised their concern over the GST clause which links availability of input tax credit to payment of tax by their suppliers.

If availability of input tax credit is linked to tax payment by their suppliers, it will worsen the situation of small businesses, CAIT said in a statement and pointed out that this is despite the fact that they fully support GST, which is likely to come to force since July 1.

Under the GST law, input credit against taxes paid by the purchaser can be availed of only if the seller deposits the tax. In the event of non-compliance at the end of seller, it is the purchaser who will be denied input credit.

 Over 6 million businesses are due to fall under the GST net and most of them are MSMEs. These businesses suffer from uneven cash flows but are largely compliant, claimed the association.

If availability of input tax credit is linked to payment of tax by their suppliers, it will worsen the situation of these small businesses, the CAIT statement said.

“We are happy that the GST Council has cleared the way for the new law to get implemented. The trading community and other small businesses will benefit from the single tax regime undoubtedly,” Praveen Khandelwal, CAIT secretary general said.

“However, the provisions in the law to do with input tax credit availability if not corrected will be detrimental to their survival. Therefore on behalf of the entire traders, we urge the finance minister to remove this roadblock so that GST can be a great law for all,” he said.

Source:PTI