SME Times is powered by   
Search News
Just in:   • Equity indices break two-day losing streak on value buying  • IMF urges Sri Lanka to tighten monetary policy  • Global semiconductor sales to reach $676 bn this year: Gartner  • Tinna Rubber hits upper circuit, investors accumulate 900% returns in year  • Availability of jobs in Japan improves for 1st time in 3 yrs 
Last updated: 03 Jul, 2018  

msme-THMB-2010.jpg SMEs settling down after initial teething problems (GST completes a year on June 30)

   Top Stories
» Net direct tax collection reaches highest-ever figure in FY 22
» Musk has to manufacture here to sell Tesla cars in India: Gadkari
» Round tripping of industrial inputs by large players unfavourable to local value chains
» Sitharaman engages investors in Silicon Valley
» Modi hails India's success in achieving target of $400 billion of exports
Bappaditya Chatterjee | 03 Jul, 2018
After the "initial bumpy ride", micro, small and medium enterprises (MSMEs), which had faced problems with GST compliance and cash flows, are gradually settling down with the new indirect tax regime, stakeholders say.

According to them, procedures of Goods and Services Tax (GST) are getting "easier" and the impact of this tax is now being felt in "formalisation of enterprises, wider tax base and higher tax revenues".

The uncertainty over input tax credit had been a "dampener for quite some time for businesses as it has an impact on cash flows", but proposed simplified return filing system is expected to make input tax credit flow smoother, they said.

"As to the SMEs, it has been a story of overall benefit -- which can be ascribed to the wider availability of input tax credit. As GST procedures are getting easier, there is a surge in the economic demand. It is true that, initially, SMEs faced problems with GST compliance, which is essentially technology driven, and had to make certain modifications in their systems," CII Eastern Region's Chairperson and Founder & Managing Director, Ortel Communications, Jagi Mangat Panda told IANS.

A number of small taxpayers have opted for composition registration wherein they have opted to pay tax at a specified percentage of their turnover rather than getting into the complex compliances of a regular taxpayer.

"Billing on GST (from Day One) and movement of stock were the early worries. Once these settled, there was requirement of filing three returns a month, which was stressful," Tejas Goenka, Executive Director at the business software provider and qualified GSP (GST Suvidha Provider), Tally Solutions, told IANS.

According to taxpayers, continuous monitoring of their monthly transactions to ensure that "there is no activity which has escaped the ambit of compliance" has been "a matter of concern".

"As time passed, things eased for them with a more convenient return filing mandate every month. As it stands, things seem to have settled on the ground and after the initial bumpy ride, businesses are beginning to see the benefits of GST and thriving under it," Goenka said.

The major challenge has been in respect of "filing of complex returns and the GST portal-related technical issues".

With the deferment of GSTR 2 and the planning of new return filing model, things were a lot better. "But a number of businesses in the unorganised sector have problems revamping their technological structure to capture all the activities, which are to be reported in the GST return," Panda said.

Moreover, there was a problem of incorrect and incomplete data uploaded by the SME segment originally in the returns.

"The awareness regarding the process of correction has been lacking. The government has tried to clarify such matters with the issue of relevant circular," said Shubham Khaitan, Partner, S. Khaitan & Associates.

"Lack of timely disposal of refunds has impacted the cash flow for exporters of both goods and service. SME segment exporters have been affected due to the blockage of working capital. Matching of input tax credit between GSTR 2A and GSTR 3B is a hurdle, too," Khaitan told IANS.

SMEs are receiving notices against the said matching of invoices, of which the legal validity is itself in question, said Khaitan, who is also Member, Economic Affairs and Taxation Subcommittee of CII Eastern Region.

"However, over the last few months the government has taken cognisance of the concern related to input tax credit. We are hoping that the proposed simplified return filing system is implemented at the earliest. Under this system, input tax credit is made available to the buyer on accepting the invoices uploaded by the supplier," Tally Solutions' Goenka said.

This along with just a single return a month will greatly ease the compliance burden on SMEs and make it easier for them to comply, he said.

After almost a year of implementation of GST, a number of small businesses, which were not quite used to paying taxes earlier, are now covered under the ambit of GST.

"As a result, the smaller segment, which is getting a lot more organised than ever, are benefiting with the greater input tax credit availability, notwithstanding some issues regarding compliance-related complexities," Panda added.
Print the Page Add to Favorite
Share this on :

Please comment on this story:
Subject :
(Maximum 1500 characters)  Characters left 1500
Your name:

  Customs Exchange Rates
Currency Import Export
US Dollar
UK Pound
Japanese Yen 58.85 56.85
As on 27 Apr, 2022
  Daily Poll
COVID-19 has directly affected your business
 Can't say
  Commented Stories
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter