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Last updated: 04 Feb, 2020  

budget-indiaTHMB.jpeg SMEs hail Budget measures to push sector

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SME Times Exclusive | 04 Feb, 2020

Indian small and medium enterprises (SMEs) hailed a string of positive measures included in the Union Budget 2020-21 tabled in the Parliament last week.

Sitharaman introduced a series of measures, in line with the recommendations of U. K. Sinha Committee, to support the MSMEs through easy liquidity, greater business opportunities, and operational efficiency, said Ketan Gaikwad, CEO of Receivables Exchange of India.

Some of these measures will help in the greater participation on the trade receivables discounting platform (TReDS), which is a unified platform for MSME sellers, their large buyers which includes PSUs and Corporates, and financiers, to facilitate timely payments and secure credit on more favourable terms, he added.

In a similar tone, Malay Dikshit , Founder & CEO , Piscium Health Sciences Pvt Ltd said that it is a great budget for start-ups – especially focused on the manufacturing sector.

The announcements on setting up knowledge and technology clusters to empower start-ups as well as National Mission on Quantum Technologies and applications will potentially set a new direction for aspirational entrepreneurs in the country, going forward, he added.

At the same time, increasing tax deductions and relaxation of taxes on ESOPs will too contribute towards healthier growth of the start-up ecosystem in the country; and like me, will empower several professionals to cherish their dreams of being business owners, he said.

CMA B Mallikarjun Gupta - Chief Taxologist, Logo Infosoft, said that the budget has provided a tremendous thrust on MSME Sector as it has introduced Safeguard Duties, this is essentially required as imports are becoming cheaper on account of IGST being eligible for Input Tax Credit for traders which replaced CVD which was not eligible earlier. This would help the align MSME manufacturing sector on track.

"The fake invoices being issued in GST Regime has become a big headache for the Government and to punish such errant taxpayers the budget proposes hefty penalty equivalent to the aggregate amount of fake invoices issued or transactions omitted,” he said.

The budget also proposes to levy equal amount of penalties on the person who has received or miss used to take input tax credit. These stringent provisions will definitely weed out the black sheep from the system, he added.

Manas Mehrotra, Chairman, 315Work Avenue, co-working space provider, said that the Union Budget 2020-21 has announced a few measures that would benefit the start-up industry and indirectly the coworking sector.

The budget has proposed deferring the tax payments on ESOPs by five years or till the employees leave the company or sell their shares, whichever is the earliest. This will reduce the cash flow problem for employees who do not sell their shares immediately and continue to hold them for a long term, he said.

The budget has also proposed a 100% deduction of profits for three consecutive assessment years out of seven for eligible start-ups having turnover of up to Rs 25 crore and an increase in the turnover limit for tax exemption for start-ups from Rs 25 crore to Rs 100 crore, all of which will boost the start-up sector, he added.

Exclusive funding, single window clearance and portal for start-ups would also encourage entrepreneurs to take greater risks to set up start-ups. This will augment the number of start-ups in the country and we could be heading to be the largest start-up ecosystem in the world, he said.

 
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