RE­VIV­ING MSME SEC­TOR

The GST treat will help the sec­tor re­gain health

DNA (Delhi) - - OPINION -

It’s rain­ing sops for the mi­cro, small and medium en­ter­prises (MSMEs) with the GST Coun­cil hav­ing dou­bled the tax ex­emp­tion limit to Rs 40 lakh in an­nual rev­enue. The GST bo­nanza comes in the wake of a se­ries of mea­sures an­nounced by the Naren­dra Modi gov­ern­ment last Novem­ber rang­ing from grant­ing loans at the short­est pos­si­ble time, whit­tling down the In­spec­tor Raj to mak­ing it manda­tory for pub­lic sec­tor units to buy a cer­tain per­cent­age of goods from women en­trepreneurs. The gov­ern­ment is more than will­ing to re­vive the MSME sec­tor, which had been badly hit by de­mon­eti­sa­tion. So much so that the RBI had even de­cided to per­mit a one-time re­struc­tur­ing of ex­ist­ing loans to MSMEs that are in de­fault but the loans given to them have con­tin­ued to be clas­si­fied as stan­dard as­sets. Com­ing back to the GST treat, now that busi­nesses with an an­nual turnover un­der Rs 40 lakh will be ex­empt from reg­is­tra­tion and pay­ment of GST and in case of spe­cial cat­e­gory states such as in the North­east, the ex­emp­tion limit will be dou­bled to Rs 20 lakh, the gov­ern­ment will have to forego Rs 5,200 crore on an an­nual ba­sis. In­ter­est­ingly, the long-stand­ing de­mand of sim­pli­fy­ing the process of com­put­ing and fil­ing taxes has been taken care of. Those reg­is­tered un­der the Com­po­si­tion Scheme will now need to pay a fixed GST rate on to­tal sales and file re­turns only once a year. The gov­ern­ment’s ur­gency is pal­pa­ble. The MSME sec­tor con­trib­utes 50 per cent to the man­u­fac­tur­ing sec­tor and of­fers em­ploy­ment to a huge army of labour­ers. Given that there is job scarcity, a ro­bust MSME sec­tor can of­fer liveli­hoods to mil­lions.

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