Doubled exemption limit fails to cheer MSMEs

The GST Council, chaired by Finance Minister Arun Jaitley, has doubled the exemption limit for GST registration for micro, small and medium enterprises (MSMEs) to Rs 40 lakh from the current Rs 20 lakh. This means the business with an annual turnover under Rs 40 lakh will now be exempted from GST. But the industrialists in Ludhiana are unhappy with this decision due to several reasons. They had expected much bigger relief than this exemption, observes The Tribune correspondent Shivani Bhakoo

‘No input tax credit paid on purchases’

The president of FOPSIA, Badish Jindal, said the increase in exemption limit was deadly for small-scale sector as they wouldn’t be able to claim the input tax credit paid on purchases. So in a way their purchases get costlier by 18%. The government must come up with a tailored scheme for the exempted sector as these exemptions are the main reason for bogus billing. “While the government thinks it has done good to the MSMEs, we hardly see any good in this increase in the exemption limit,” said Jindal.

‘Were expecting cut in GST rates’

Vibhor Garg, vice-president of All-Industries Trade Forum, said they were expecting a reduction in the GST rates on many items, including construction material and hardware, but no such announcement was made by the Finance Minister at today’s meeting. Garg said it had been over a year and a half but the complications in GST were still there and even the government had not been able to stop tax evasion, for which the whole exercise was carried out by the Central Government.

‘GST on steel also needs to be reduced’

President of Fastener Supplier Association of India Rajkumar Singla said GST on fasteners was very high, so we were expecting the government will reduce it to 12%, but there is no such relief. Similarly, GST on steel also needs to be reduced. The government needs to bring all goods and services under single GST and the return filing requires more simplification.

‘GST still very complicated’

Rajnish Thapar, secretary of Wire Drawing Federation of Punjab, said owing to the multiple tax slabs, GST was still very complicated. The government may be giving subsidy to construct a new house but at the same time, the rates of cement are too high. There will be hardly any relief to consumers. All items should come under one slab and if this happens, all will be relieved.