FICO demands MSME definition to be revised & notified from Union Finance Minister

Ludhiana, July 5, 2019: S.Gurmeet Singh Kular President FICO in a special screening of Union Budget 2019 along with CA Vishal Garg & Shri Mandeep Chowdhry Media Adviser FICO, welcomed the under noted decision

1.The Finance Minister said that under the interest subvention scheme, Rs 350 crore allocation is for 2% interest subvention to all GST registered MSMEs in the current year on all fresh and incremental loans.

2. Additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakh. Overall benefit of around Rs. 7 lakh over loan period of 15 years.

3. Government has already moved GST council to lower the GST rate on electric vehicles (EV) from 12 per cent to 5 per cent. Also to make electronic vehicles affordable for consumers our government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs,"

Shri K. K. Seth Chairman FICO, welcomes the decision of reduction in GST on electric vehicles from 12 to 5 percent.

At the same time S. Gurmeet Singh Kular President FICO, said it is disheartening to know that

1. Definition for MSMEs

To accelerate the growth of the MSMEs, The definition for the MSMEs that is one of the long awaited demanded has not been notified, As presently Micro Industry falls under 25 Lakhs, Small Industry falls under 5 Crores & Medium Industry falls under 10 Crore. The Union Cabinet chaired by Prime Minister Narendra Modi have already approved change in the basis of classifying Micro, Small and Medium enterprises from ‘investment in plant & machinery/equipment’ to ‘annual turnover’.

Revised definition – based on ANNUAL TURNOVER:

(For both, Manufacturing and service rendering units)

• Micro enterprise - Turnover up to Rs 5 cr

• Small enterprise - Turnover Rs. 5 cr to 75 cr

• Medium enterprise - Turnover Rs. 75 cr to 250 cr

But the same has not been notified yet, Even in this Union Budget, the prolonged demand of the MSME’s has not been taken in to the consideration

2. GST on Petroleum Products:

Petroleum products not brought under GST Regime, rather a Special additional duty and road and infrastructure cess on diesel and petrol to be increased by Re 1/litre, which will be a direct burden on the industry & citizens of India. The petroleum products should have been bought under the GST Regime so that industry could be benefitted from it.

3. 12 % GST on the Steel

The steel is being taxed at 18%, but the anomaly is that the finished products of the steel in Industry are being taxed at 12%, which is also resulting in GST refunds being stuck at the government's end. You are requested to bring the steel and its products should under the GST Slab of 12% to facilitate the industry.

4. No Technology Upgradation Package for the Bicycle Industry/ MSME Sector.

There is No Package for Bicycle industry, which is the mother industry of Punjab, as India is the second largest manufacturer of Bicycles in the world. Neither the Technology Upgradation Fund, has not been sanctioned for the MSME Sector, which is the backbone of the Indian Economy.