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India SME Forum writes to GST Council seeking concessions for the MSME sector

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Ease of Doing Enterprise for MSMEs: India SME Discussion board, an {industry} physique for MSMEs, has lately despatched a illustration to the Items and Companies Tax (GST) council recommending methods to maintain and revive the sector that’s presently beneath large stress as a result of large second wave of Covid19 pandemic.

The illustration advised permitting of Enter Tax Credit score (ITC) to be transformed into tradable devices (secured) to unlock capital. “ITC is an industry-wide concern particularly for MSMEs which can be working on low capital margins and notably for these sectors the place inverted GST construction is current,” Sushma Morthania, Co-Founder & Director Common, India SME Discussion board mentioned within the letter to Union finance minister Nirmala Sitharaman.

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It additional proposed that MSMEs that promote on-line be allowed to be current in a number of states with out having Principal Place of Enterprise (PPOB) in all of the states. They could possibly be required to have PPoB registration of their residence state solely.

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“At current, an MSME wishing to promote on-line is remitted to acquire GST registrations (PPoB) for each state the place it needs to conduct enterprise. Nonetheless, there was a delay in availing GST registration which is stalling onboarding of MSMEs on e-commerce platforms. Aside from utility errors, distinguished causes for delay in availing GST registration are ‘bodily visit-business not current’ and ‘commerce licence/skilled tax certificates not current’,” the letter said.

Concession from bodily verification (of the office by way of a bodily go to to Aadhaar verification centre and/or website go to of the office) for getting GST registration was additionally sought.

It additional requested for refund of inverted responsibility construction to be prolonged to enter companies. At the moment, as per the CGST Act, one of many cases when refund might be claimed embrace when the GST paid on inputs is greater than the GST on outward provides. A scenario known as a case of inverted responsibility construction.

Nonetheless, the Part 53(3) (ii) of the CGST Act categorically covers a scenario the place the inverted responsibility construction is because of the next fee of GST on inputs. Nonetheless, there is no such thing as a particular point out of upper fee of GST on enter companies.

For example, an MSME engaged within the sale of attire which attracts GST at 5% and 12%, incurs GST at 18% on enter companies, equivalent to logistics, warehousing, advertising and marketing, and many others. might be in a perennial extra GST credit score scenario with no refund being potential.

“There can’t be differential remedy vis-à-vis enter companies and enter, as inverted responsibility on account of each add to the price of doing enterprise,” mentioned Morthania.

Different suggestions included extension of due date of GST Returns and waiver on late charges and curiosity and discount of the GST charges on the Covid-related gadgets equivalent to oxygen concentrators, O2 cylinders, Oxymeters to make them inexpensive and accessible to all.

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