Apex chamber Of Commerce and Industry (Punjab) writes to Union FM regarding GST Simplification for MSMEs

Ludhiana, September 28, 2018: Apex chamber Of Commerce and Industry (Punjab) has written a letter to Finance Minister, Government of India (GoI) regarding the GST Simplification for MSMEs. In this letter, the Chamber president P.D.Sharma has urged the GoI to take this matter urgently so that the decision may be taken and implement before the ensuing general election.
Sharma stated in his letter that GoI rightly understands the limitations and capacity of M.S.M.E sector to face the arising business competition.
Prime Minister rightly constituted Group of Minister (GoM) to assess the requirements which can give desired relief to this sector.
The then interim Finance Minister Mr.Piyush Goyal rose to the occasion to facilitate discussions on this subject on priority basis. Suggestions were also called from this sector.
“It is discouraging to note that Group of Minister (GoM) have not met even once it was likely to give its report to G.S.T. Council for discussion on September 28th meeting”, said Sharma.
He added all the efforts made in this regard have proved futile to the utmost discomfort of the vulnerable MSME sector.
Adding, he said, “Government is urged to kindly take this matter urgently so that decision may be taken and implemented before the ensuing general election. It is worth nothing that MSMEs are the drivers of job creation as per government data itself. The Central Statistics Office (CSO) data shows this fact. There is a feeling in government that this issue is likely to be taken up after the election.”
Further, Sharma stated that Apex Chamber has already sent detailed suggestions on G.S.T problems in a letter dated July 26, 2018. The letter reads as under:
“It is a good augury that Finance Minister himself is keen to take up the GST related issues of MSME sector in a focused manner. Many thanks for this gesture.
Tax Problems of Auto Parts:
Auto Parts of all categories are manufactured almost exclusively by MSME sector. The range of Auto Parts is very large. The interchangeability of these parts is too ubiquitous due to the wonders of technology. However, the commerce of Auto Parts is very complicated. As such all Auto Parts should be placed in one tariff slab and 18% slab is most suitable. Placing of these parts in two slabs i.e. 28% and 18% is not justified and is complicating the business. This is resulting into malpractices of sorts and obstruction in the flow of smooth business.
After a year of GST’s introduction only 60% of eligible tax payers file returns before the dead line. Removal of Auto Parts from the 28% slab will boost the business and tax revenue of the government.
Job Creation:
Job Creation is mainly attributable to MSME Sector. From this angle also the rationalization of tax slab for MSME sector is very essential.
Government has done well to remove bulk of the items from 28% slab in November last year. The total number of items in the 28% tax slab was 226 in the beginning and the list has been pruned down to just 35 items today. These include ACs Auto Parts cement aerated drinks and demerits goods.
The outgoing Chief Economic Advisor has held the view that the highest rate slab of 28% should be done away with.
Mr. Arun Jaitly had promised while ushering in GST as Finance Minister, as collections stabilized and started rising, both the number of slabs as well as the rates themselves would reduced now the time has come to this convergence.
In the background of above facts removal of all auto parts from the highest tax slab is the only solution to boost the sagging business morale of MSME sector. Possibility of converging of two slabs of 12% and 18% should be seen and implemented with immediate effects.
Relief to Smaller Tax Payers:
GST Council has given relief to units up to Rs. 5 crore annual turnover to file returns an quarterly basis. This concession may be allowed for those with a turnover of 10 crores.”