GST scores big for sports goods makers; pharma feels the pain
On the outskirts of Meerut thrives the sports goods manufacturing hub where work is in full swing.
While testing a leather cricket ball, Lokesh Kumar Sharma, a senior partner of VATS Sports, praises the goods and services tax (GST) regime brought in by the Bharatiya Janata Party (BJP) government at the Centre. “It has worked as an accelerator in our nation’s progress and streamlined the operations.”
The view of Sharma is shared by the owners of other micro, small, and medium enterprises (MSMES) dealing with sports goods manufacturing in the area.
“A 5 per cent GST is now levied on clothes. It is helping us since we had to bear the expense of buying untaxed fabric,” says Shivinder Sharma, chief executive officer of Acctive Sports.
The BJP’S manifesto, titled Modi ki Guarantee 2024, promises to simplify GST compliances and laws, provide digital credit, and streamline the tax portal for MSMES. Aditya Jain (name changed) from GEM, another sports goods MSME in the area, praises the reduced paperwork and travel for business processes thanks to GST. “Previously, even to submit a paper, we had to travel 15 km and give money to get the work done. Now, it’s better.”
However, for pharmaceutical distributors, it is different. Pharma distributors in Muzaffarnagar and Meerut are concerned about disrupted local trade and unexpected tax notices.
“We are being sent notices for an error of ~2 from four years back, which was not the case earlier,” rues a small pharma distributor with the condition of anonymity.
According to Section 43B(h) of the Income Tax Act, effective April 1, companies are supposed to pay MSMES within 45 days of the agreement. More than 182,000 complaints were filed by small businesses to claim over ~42,000 crore, according to data from the MSME Samadhaan Portal as on March 31.
While Shivinder Sharma praises the government for timely payments, Lokesh claims otherwise. “We haven’t received payment from a state PSU for seven years.” Santosh (name changed) from Quality Flavours
Exports, a mint essential oils manufacturer in Moradabad, is waiting for a payment whose deadline was extended to 90 days from 45 earlier.
A brass and iron manufacturer flags the rising cost of raw materials. “We are now thinking of alternative work,” he says. Lokesh highlights the government’s protection of MSMES in their tenders and improved access to bank loans. However, the GEM is a concern.